Navigating claims in international programs - part 5: 5 best practice tips for managing global claims

_{We’ve been investigating claims best practice for international programs, gathering insights from across our network of partners and our own team. These include claims handlers, brokers, loss adjusters and coverage lawyers. This series of articles covers practical information and useful tips on how you can address the issues that may arise in the reporting, handling, and settlement of cross border claims. You can read the first article in the series here.}

As we’ve seen in previous articles, there are undoubtedly some established practices in handling claims that have been proved to work, like getting out to the loss site as quickly as possible and working with specialists who know the local market on your claim.

But there's also a lot of work that can be done before a loss happens to put you and your business in the best position. That means ensuring you're planning and communicating effectively.

This is one of the strongest themes, and areas of common ground, that we hear partners talk about.

As Brendan Fahy, Director, Commercial Risk Solutions at Aon put it, "key to the relationship here is communication. Whether that be with central insurers, local insurers, local adjusters, and central adjusters. If you don't know what's happening on the ground, you can't manage claims. It's as simple as that. So really, the key is making sure everyone is aligned, because if they're not, there will be issues locally and that's typically where these claims can break down.’

Ian Hasson, Director Financial Risks, Europe Middle East & Africa at Sedgwick International, adds “I think it’s about communication and training up front with the customer, as to what might need to be done. Also, the early engagement of specialists is helpful, to come up with a consistent template to gather information from multiple territories."

Communication within your business is also essential. As Ian Hasson adds, "Where the losses occur in major facilities, staff may be motivated to focus their attention in gathering the required information. But when you spread out into multiple territories, the loss values in other territories could be significantly smaller, so these local businesses might ask ‘what's in it for us to spend a huge amount of management time gathering this information."

To start, we offer the commitment that we will only ask you (and your representatives) for information on claims that is relevant to the assessment and quantification of the claim. We will also provide an explanation and rationale of why we are asking for specific information.

One approach that we recommend is to include a claims preparation clause in the policy, with provision for the appointment of specialists to help the insured gather the information in circumstances where this is judged necessary. You can find out more about ONE Form here.

But brokers like Brendan Fahy from Aon are also supporting clients with resources to help streamline claims. "What we've done for some clients is look at the claims that we've had in the past and given templates to the operations teams to say if you're unfortunate enough to have a loss, this is the template to follow.

"It's great because they understand the template as it matches their operations and business structure. Now of course, you'll always have to tweak it because every claim is different and has different challenges. Even better, if you're using the same adjuster, they'll know what that template looks like too."

Keeping this information streamlined within the process also helps according to Ian Hasson from Sedgwick International, "in my experience, the process works well where there is a clear leader within the insured’s business who is taking control of the quantification aspects, but also is coordinating the delivery of the information and evidence which is required to support any particular element of the claim".

Having a small, tight decision-making group, made up of senior people with the authority to make decisions on behalf of their organisations, and the ability and commitment to implement those decisions also represents best practice.

Drawing from our experience of handling internationl claims, we recommend that customers appoint an individual, or a small team, - with suitable skills, experience, and decision-making authority - right from the start of the claims handling process. This can be determined in advance in the claims handling procedures drawn up by the insurer and the customer.

"A great example of a proactive claims structure was for a client in the petrochemicals sector", shares Ian Hasson from Sedgwick International, "drawing from their previous experience with claims, the customer had set up the facility for a Claims Steering Committee. This consisted of no more than 4 people from the customer and the lead insurer. The requirement for Committee Members was that they had the authority to make significant decisions about the handling and settlement of the claim."

"The Committee worked with a specialist loss adjusting team, including leading forensic accountants, who specialised in petrochemical losses. As a result, the claim was paid quickly by the insurance market, and the participants commented on the value for them of being able to draw on the experience of previous claims and make decisions quickly and with the appropriate authority."

Run ‘what if’ scenarios with your insurer’s claims representatives and discuss how the business would respond. Consider ways in which the business could respond better. These changes need not be drastic or expensive and could include nominating appropriate officers, building familiarity with other segments of the business, good communication between territories, and forward planning workshops.

Establishing claims handling protocols and pre-nomination of loss adjusters can enable an immediate post-loss to focus on the claims response. This allows decisions to be made sooner, facilitating loss mitigation, and ultimately reducing the claim lifecycle.

One of the primary advantages of our claims handling protocol is to bring global consistency on claims handling across the globe, by capturing bespoke customer's arrangements, creates transparency for all parties, and promote certainty and confidence in claims process.

William Wilson, Head of Major Loss at McLarens, told us, "We regularly attend sessions with all key stakeholders where coverage response is evaluated against potential loss circumstances. The output from these sessions can range from changes to policy cover (e.g., increasing indemnity periods, amendments to suppliers’ extensions) or the enhancement of business continuity plans (e.g., the identification of replacement options for critical path machinery, sub-contract manufacturing solutions, or engaging disaster restoration experts)."

Claims portals are a good platform for dealing with high volume, attritional losses, and for keeping track of a claims portfolio. Our PULSE portal is a useful tool that includes the ability to submit loss notifications 24/7, monitor active claims, and review claims history. Of course, regular and clear communications outside of the portal are essential to make decisions on complex claims on international programs.

As Sedgwick International's Ian Hasson says, "I think there is a place for claims portals, and similar platforms, for sharing information proactively, and where there is transparency of all the information. The shared repository idea is good for encouraging transparency. Logging what information has been provided by the parties, at what date. It gives clarity around those aspects."

"Something I hear a lot is the value of transparency that our clients derive from using our PULSE portal," explains Reto Collenberg, Head International Programs APAC & EMEA, "it really puts you in control and gives you easy access to real-time policy, claim and risk improvement information. You can review your policy, submit loss notifications, monitor claims and track what has been paid and what is outstanding. In a complex claims landscape, that's hugely valuable."

Read more articles in this series

Part 1: Global claims for global risks
Part 2: Legal systems and jurisdictions
Part 3: Managing claims across cultural and geographical barriers
Part 4: Keeping your business running, financials and cash flow

 A special thanks to some of the experts in our network who shared their insights for this piece:

Brendan Fahy, Director, Commercial Risk Solutions at Aon.
Ian Hasson, Director Financial Risks, Europe Middle East & Africa at Sedgwick International.
William Wilson, Head of Major Loss (Ireland) at McLarens.

Readers should form their own opinion on the topics described and not rely on the information provided in this article. Though collected with due care, Swiss Re does not accept any responsibility for completeness and accuracy of the information provided.