Adrian Gilbert, MD SX3 Latest Insights on the Claims Sector
SX3 has now reached its 7th year anniversary, representing 20% of my working life (see final paragraph for the maths), and it’s been a busy few months for the company. Its also been a busy period for a Claims Sector still feeling the effects the pandemic’s short and long term societal impact, Civil Procedure changes, and Brexit legacies. Claim volumes are increasing, new working patterns settling in, new claims processes bedding down, supply chain materials and resources being outstripped by demand, exacerbated by increased energy costs and new Covid variants. Following are some of our observations from our sector that I think reflect these impacts, and that we expect to continue to develop into next year.
SX3 Audits – Claims Handling Performance Trend
We have seen a slight dip in claims handling performance from all audits performed in the past 6 months, with the headline claims performance average score now at 90.52% compared to 91.94% for the previous 6 months. We are not surprised by this trend given the factors mentioned above, but exacerbating matters seems to be an increase some claims organisations are experiencing in staff turnover. With many claims people having embraced a homeworking lifestyle to a lessor or greater degree, some are seeking roles elsewhere in the country or outside the claims sector altogether. Coupling this with the factors mentioned in our introduction, this certainly a challanging time for resourcing claims operations just as we move into the usually busier winter months.
Whiplash Reforms Update
The first two Official Injury Claim (OIC) quarterly reports were issued on 21st Oct and 8th Dec. It is important to remember that this data does not encompass all PI claims registered during those quarters. It represents claims arising from accidents from 31st May 2021 to 31st August, and only those where the value of the claim is realistically expected to be below £5000, and excluding vulnerable road users. By way of example, a further 52,349 Claim Notification Forms (CNFs) were submitted to the MoJ Portal during June to August; therefore, we should take any long-term volume trend predictions at this stage with a pinch of salt.
What we do know from the OIC data is that in the first 6 months:
- 114,077 claims were started via the OIC Portal
- 103,513 were represented claims. That’s 90.74%, which is in line with most industry predictions.
- Only 209 claimants were represented by a CMC.
Some commentators pointed to the lower-than-expected percentage of claims (25.1%) requesting an uplift due to an exceptional injury, exceptional circumstances or both. However, perhaps more telling is the types of injuries being claimed for. Whilst 92.8% of the total claims submitted in the OIC Portal included a whiplash tariff element, 66.24% of those whiplash claims also cited additional injuries that will require some of the General Damages to be assessed outside the whiplash tariff.
A “Mixed Injury Working Group”, with representatives from both claimant and compensator organisations, has been set up to work collaboratively to fast track test cases through the Court of Appeal to establish Court guidance for valuing General Damages for cases with a mixture of tariff and non-tariff general damages. In the meantime, compensators and claimants are faced with the task of trying to establish and agree sensible, pragmatic valuations of these claims or face testing the dispute resolution processes. These claims will take time to mature and be ready to settle, and we will be watching this space closely over the coming months as this issue progresses.
Claims Technology – Data
Managers of claims operations are constantly looking for innovations and technology to help improve their customer experience, reduce operating costs, improve decision making and empower their teams. One of the silver linings of the pandemic restrictions seems to be the appetite it created for the adoption of new technology. But, you can’t just layer new tech onto old tech, the underlying data has to be sound for technology solutions to be truly effective. That was the message we heard time and time again this year from industry commentators. Here are some excerpts:
Sustainable solutions need to be built on solid foundations – quality data is the “Holy Grail”
SX3 News – 7th Heaven
SX3 has now completed its 7th full year supporting the insurance claims industry. Highlights of the year include:
- Increasing our base of audit clients, including a significant reserves due diligence assignment from a leading reinsurer. Read about it here: Delivering a Rapid Response to Due Diligence Need
- SX3 acted as an expert witness for a commercial dispute between an insurance capacity provider and TPA, independently assessing and quantifying failures of the claims handling
- Validating an insurer’s in house Quality Assurance by performing a peer review of their in-house audit processes. Read the story here: Peer Review of In-House Audit Processes
- Delivering analytical and strategic decision support to an insurer through a significant change in their claims operating model. The full story is here: Keeping the client in control throughout the change process.
Our team continues to grow, and with now increased geographical coverage with the inclusion of 2 Ireland based consultants.
On a personal note, a small career milestone was passed recently as I marked 35 years working in our industry. I wouldn’t quite say the time has flown by, but it has certainly been interesting. More – Adrian Gilbert – Lessons from 35 Years in Claims
On behalf of all of us at SX3, I thank you for your continued engagement and we wish you the very best for the seasonal festivities. We look forward to seeing you in person in the next year and indeed, the next 7 years.
Adrian
Tel +44 (0)1702 567 501
PS
We have a few SX3: 7 years (copper) commemorative insulated/reusable drink cups available. I want them to go to good homes in our Claims community. If you would like one, just get in touch.
