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Communication Leads to Trust:

IIF Guidelines Can Make a Difference

Recently on Morning Ireland “Insurance” was described as the greatest problem facing Irish Business. It is clear from reading the MIAB report and from our day-to day visits that one of the major difficulties has been one of communication. Insurers on one hand give very valuable advice and possess expertise in Risk and Claims Management. On the other hand the Policyholder often has the inside track on a particular claim or claimant and feels they are not listened to within the handling and settlement process.

On the first of May this year Mr Paul Donaldson on behalf of the IIF announced Communication Guidelines For Insurers and Policyholders. Minister McDowell was present and Mr Turlough O’Sullivan on behalf of IBEC welcomed the move towards improving understanding.

The guidelines are available on the IIF website (www.iif.ie) and they commence with a paragraph on Safety Policy. When we go to carry out investigations we find it very surprising that basic statutory requirements like Safety Statements and Risk Assessments are not in place. It is essential that everyone moves to get to grips with this issue.

The next section repeats some of the policy requirements to notify accidents and to complete report forms. It goes on to deal with preservation of the locus and CCTV evidence, the identification of witnesses and the passing of correspondence. Insurers for their part promise speedy investigation, avoidance of undue disruption to the place of work, to tell the policyholder when a claim is to hand and to make available witness statements to the policyholder for verification.

Policyholders are to send in legal documents and notify speedily. We have seen many cases where investigations have been seriously prejudiced by delays in notification. Tremendous damage can be done by well meaning attempts by policyholders in replying to correspondence themselves.

Insurers agree to be available to confer with policyholders and discuss assessments of liability and damages and to consult with policyholders in advance of settlement talks whenever practicable. At its worst, failure to consult fully with the policyholder can result in vital evidence being missed entirely in the preparation of a case. An insured company I dealt with in Cork had prepared a detailed dossier with the assistance of a Private Investigator proving fraud against an employee without knowing he had a claim in against them. Meanwhile their insurer without any consultation reached a major but “expedient” settlement on the claim. The insured has since gone out of business.

In cases “deemed to be fraudulent (spurious or exaggerated)” the insurer and the policyholder agree together to fight the case and to pursue costs. From my involvement in such cases, I can say that it is vital for all concerned to be aware of the long-term energy and cost necessary to pursue this course. This is why the commitment between the two is so vital.

Renewals, another important component raised at the MIAB are also dealt with. Insurers agree to issue renewal terms in time for the intermediary to provide them to the policyholder at least 15 working days before renewal.

There is a paragraph on the role of intermediaries and the importance of planning and allowing for their involvement. Regular reviews are proposed in suitable cases. Account is to be taken of possible delays in communicating via intermediaries and the need to clearly define roles. On a practical level we have found that sensible arrangements can be reached for Claims Inspectors to communicate directly with Risk Managers on issues surrounding urgent decision-making such as settlement opportunities.

Some insurers have worked this way for many years. We have found that this type of partnership approach to claims often led by the broker can yield very satisfactory results in individual claims. All should note however that relationships take some time to build up and can be shattered in a careless instant. These guidelines provide an excellent framework for an industry to communicate with its vital commercial customers. Perhaps with their implementation insurance will once again be seen as a solution rather than as the problem.

© John Higgins 2003

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