Policyholders good, Insurers bad? Not so.

Go Back 19.4.23 INSIGHTS

It was a real privilege to be asked by BILA and the Insurance Post to write a short thought piece which was published last week:


As a coverage lawyer who only acts for policyholders when they find themself with a business critical or personally vital coverage issue, I hear the tribal drums all too often: they took my premium and now they don’t want to pay my claim. Those perceptions are harmful and untrue. They cloud the special function that insurance plays in society as a private instrument for transferring risk and often overshadow the many success stories that the industry has to offer.

Often perceptions are created at the claims stage when notifications are declined or policies avoided (rightly or wrongly). These views are influenced by the time it takes insurers or their agents to make that decision, the manner of the investigation, and the conduct of any subsequent formal dispute. Policyholder advocates will sympathise with the experience of answering or resolving one pivotal coverage issue only to be met with two further and entirely new coverage issues which frustrates the process. Insurers will have their own frustrations.

By the time the coverage lawyer is involved, often the parties are already entrenched in their respective view of the claim and the other party. The parties and their advisers then search for the dispute resolution mechanism in their policy(ies) and the battle commences, be that via the Financial Ombudsman or via more formal legal routes such as Court proceedings or Arbitration. One party wins, and the other loses, albeit often the parties mediate (eventually). None of these processes usually do anything to mitigate the tribal nature of claims and often perceptions are simply reinforced, despite the regulatory backdrop of treating-customers-fairly. The process repeats itself. Eat-Sleep-Contest Claim-Repeat.

Pausing there, there is plenty more that all stakeholders, especially claims professionals and coverage lawyers from both sides of the fence, can do to identify the cause of these perceptions and to help bring about progress in wordings; in first notification processes; in the claims investigation; in methods of communicating; in the use of technology; in processes where the insured is interviewed for coverage purposes;  in claims negotiating; and dispute resolution generally. It is not disloyal to either tribe to contribute to that discussion in an environment that seeks to foster mutual respect. As an organisation with its membership drawn from all stakeholders in the insurance process, BILA has a rich history of fostering that debate and influencing change since its inception in 1964.

The views expressed in this piece are personal to the author and do not represent those of BILA or the BILA Committee generally.

Dan Brooks is a Partner of Wynterhill LLP.

This post is intended to provide guidance of a practical nature but does not contain legal advice or advice as to what action you should or should not take specific to your insurance needs or those of your business, or with regard to any particular situation.