NEWS

Claims managed a better way

The property insurance industry is a complex one with fragmented supply chains, too many hand-offs and too much operational friction. It is not unusual for half a dozen suppliers to be involved in one property claim, each one managed by different silo functions within insurers. This increases the stress and confusion for customers who are already stressed as a result of the claim incident. This operational friction is especially acute in escape of water (EOW) and flood claims.

MA Group works for many different clients who all have a different approach to managing supply chains and pricing scopes of works. Some use their own in-house schedules of rates, while others use the MA Group independent National Schedule of Rates (NSR). Some have surveyor-led models with pre-scoped claims, while others use a loss adjuster led model or instruct MA Group directly. So, in 2020 MA Group used its 20+ years of claims data to carry out extensive analysis on EOW claims by looking at pricing models, schedules of rates and the triaging of claims to identify the key factors that were causing the increases in EOW claim values and durations.

We found that the surveyor or loss adjuster led models with pre-scopes extended claim durations and values – this is because there were multiple scope variations, hand-offs and far too many provisional sums used (variable costs). They also used schedules of rates that were not well designed for property claims. Those clients that instructed MA Group directly and used our NSR rates were experiencing claim durations that were consistently over 20% shorter than the average and claim values that were 35% lower. To find out more about our findings please CLICK HERE.

Following these findings, we developed our MINERVA model and entered into a pilot with one of our major insurance clients to test it. Over a period of nine months we proved the concept and now operate the model permanently under a new contract. The benefits to our client have been:

• An increase in customer NPS from 68 to 80+,
• A 50% reduction in average claim durations,
• A 32% reduction in average claim values.

The MINERVA model is a risk and reward commercial model that reduces indemnity spend without any deterioration in performance. It has a number of key elements:

• Motivation for all parties – the suppliers through volume of work and weekly, timely payments, and risk and reward incentives shared between the client and MA Group.
• Incentivising suppliers to do it right first time – a fair schedule of rates with better margins for high performers.
• National Schedule of Rates – fair and independent rates that are based on industry standards designed for the work we do.
• Evidence based systems and control – ensuring costs are evidence based and reflective of the works required.
• Right primary contractor model – giving MA Group the ability to manage all parties effectively.
• Validation throughout – to ensure clients pay the right price for the right works and materials.
• Analysis and feedback –to understand behaviours and trends that can be fed back into our systems, processes and algorithms to help us achieve the desired outcomes.

As part of the MA Group, Revival is a key part of its integrated, seamless service that enhances the customer journey and delivers value for money to insurers.