Next steps in tackling the compensation culture Tuesday 8 th September 2015
At the end of this event delegates will be able to: • Describe the impact the civil justice system reforms have had and how effective they have been for the insurance industry • Understand why the industry is experiencing increases in the number and cost of personal injury claims despite the industry passing on savings of nearly £1billion to consumers • Explain what further reforms are required to help tackle the UK’s compensation culture
Welcome & introduction James Dalton Director, General Insurance Policy Association of British Insurers
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Address One Andy Watson Chief Executive Officer Ageas UK & Chair of ABI’s Motor Committee
Next steps in tackling the compensation culture Andy Watson, CEO, Ageas UK @AgeasUK
Where are we at the moment? Average Comp Premium (£) 420 For the last two and a half years motor 410 premium prices have 400 been falling. 390 380 That trend is now 370 ending. Premiums 360 have started to rise 350 again. 340 330 320 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 @AgeasUK
Where are we at the moment? No. of claims (motor cars) (000s) 820 Claims levels are 800 back up to their pre- LASPO level. 780 760 Insurers have 740 stopped aggressively dropping prices 720 700 680 660 640 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 @AgeasUK
“I am confident the insurance sector can absorb the insurance premium tax changes, not least because I have cut the corporation tax and we have made other changes to the way insurance is levied and the way that, for example, accidents in motor insurance are properly accounted for, that are actually putting a downward pressure on premiums.” Chancellor of the Exchequer, George Osborne MP 21 st July 2015 @AgeasUK
Some action is being taken... MedCo CMCs Fraud ...But not enough @AgeasUK
This investigation should have taken costs out of the motor claims value chain... A missed opportunity? With unintended consequences? @AgeasUK
Technology, flexibility, mobility and choice are becoming more and more important for customers • Customers are time poor and reliant on technology to meet needs: • Price comparison websites dominate Motor • Smartphone and tablet penetration – websites, apps, email, web chat, social media, etc • Mobile transactions • Payment is becoming integrated with social apps @AgeasUK
Personalised service is winning consumer trust “I quite like the fact that companies like Amazon and John Lewis – once you’ve ordered something - they know who you Amazon recognises its are and they can tailor the experience customers and uses that to you ” to tailor the experience around them “I’ve used live chat with Amazon – they have the best customer service I’ve ever seen - they use live chat as a gateway, you talk to them first and “ Amazon knows everything about determine what the problem is, then they solve it in me – what I like, what I read, what I a variety of different ways – they might solve it buy – but I trust them” there and then, or get someone to call you when it’s convenient, or they might get someone to help you by email” @AgeasUK Source: Harris Interactive – Feb 2015
‘Highly automated’ cars are almost here. Driverless cars are closer than you think... UK driverless car trials took place in January 2015 Mid 2010s 34% British By 2030, connected consumers interested and autonomous in a self-drive car vehicles could save 2017 over 2,500 lives and prevent more than Autonomous vehicles to 25,000 serious make up 75% of cars accidents in the UK. on the road by 2040 2020 Source: Future Foundation - Feb 2015, SMMT Conference - March 2015
The insurance industry needs to get its act together @AgeasUK
Consumers do not differentiate between industry groupings Aggregators Aggregator Broker/ Brokers/ Legal CMC Retailer Retailers advisors Insurance Insurance Legal companies Claims industry advisors suppliers Claims CMCs suppliers Insurance Insurer Third party Third party companies insurers insurer @AgeasUK
How do we ‘make it right’? Innovation • Reduce audit • Know the customer A unified • Focus on quality • Know how to use data approach to • Simple processes regain trust and management and • Speed of resolution respect removing duplication • Engage through new channels and overlap of effort • Personalised service @AgeasUK Always have the customer at the heart.
What can we do to tackle compensation culture? Limitation periods Recoverable costs But most importantly: BEHAVIOURS General damages levels @AgeasUK 18
Thank you Andy Watson, CEO, Ageas UK @AgeasUK
Address Two Susan Brown Director, Pro Legal Chairman, Motor Accident Solicitors Society
Address Three Craig Dickson Chief Executive, Claims Solutions Group DAC Beachcroft
Panel Discussion Chair: James Dalton, Director, General Insurance Policy Association of British Insurers Panel: Andy Watson, Chief Executive Officer Ageas UK & Chair of ABI’s Motor Committee Susan Brown, Director, Pro Legal and Chairman, Motor Accident Solicitors Society Craig Dickson, Chief Executive, Claims Solutions Group, DAC Beachcroft Richard Mason , Deputy Director for Civil Justice, Ministry of Justice Lorraine Rogerson, Independent Chair, MedCo Registration Solutions
Concluding remarks James Dalton Director, General Insurance Policy Association of British Insurers
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