FSA paints positive GI picture
Claims handling: Positive picture from general insurers
Most general insurance firms are handling claims well, a review carried out by the Financial Services Authority has found.
The review also identified some areas for firms to consider in their approach to claims handling and the FSA is today publishing a Factsheet on its Website to help firms develop and embed good practice.
Alison Hewitt, Head of Department in Retail Firms Division, FSA told a conference today:
“We are encouraged by the review findings and it seems firms have been able to implement without undue difficulty the claims handling requirements in our new rules. We have seen a lot of positive signs that firms are starting to implement Treating Customers Fairly initiatives into their processes and procedures and we would encourage the industry to continue to make efforts to improve best practice particularly in the areas we have identified.”
The FSA will feed back its findings to individual firms who took part in the review and continue to monitor claims handling performance in the industry through routine supervision work. The findings indicate that further thematic work in this area is not justified at the present time.
Key findings and good practice recommendations in the Factsheet include:
Liaison with customers: Firms should keep the retail customer reasonably informed about the progress of the claim and explain why a claim is being rejected or accepted only in part and offer to provide the explanation in writing. Keeping customers informed about the claims handling process and the reasons for rejection is a simple way to ensure customers feel that they are being treated fairly.
Complaints: All staff should be encouraged to consider complaints positively and it is optimal for complaints to be dealt with by a dedicated complaints handling team. The number of complaints is less important than the way in which they are handled and how the firm subsequently acts, particularly in looking at how it might improve its claims handling processes.
Outsourcing: Insurers cannot contract out of their regulatory obligations and should take reasonable care to supervise their outsourced providers. Firms should have proper systems and controls through service level agreements and risk management processes to manage the risk posed to their business by such arrangements.
The FSA survey involved a questionnaire sent to 34 general insurers with retail customers followed up by visits to seven firms.