Though a smaller number of brokers are reporting rising claims costs across then commercial motor market, the latest Direct Commercial Limited (DCL) Broker Barometer points to significant learnings for insurers and brokers, specifically on First Notice of Loss (FNOL) procedures.
According to the new DCL Broker Barometer, 67% of brokers report that policyholders are asking brokers to report claims on their behalf instead of directly approaching the insurer or their managing general agents (MGA). This, DCL offered a reminder, is contrary to best practice for FNOL procedures.
In addition, the report further found that more than one out of four (28%) commercial motor brokers are asking policyholders to report and make a claim from the roadside, which, it said, also deviates from best practice.
Investopedia defines FNOL as “the first report that a policyholder makes to an insurance provider following the loss to an asset covered by an insurance policy,” and is normally the initial step in the insurance claims process.
The report also highlighted positive developments when it comes to cooperation between brokers, policyholders, and insurers.
The Barometer indicated that 41% of brokers now believe it is business-critical to have a strong working relationship with their insurers, MGAs, and policyholders. This is a substantial rise from 14% six months ago, the report noted. The report added that the shift highlights “the growing recognition of the importance of collaboration, particularly in the effort to reduce claims costs.”
Based on the survey, claims costs may be marginally stabilising across the commercial motor market. The Barometer noted that in Autumn 2023, 91% reported rising costs, but the latest report shows this figure has dropped to 81%.
Meanwhile, the survey highlighted brokers’ preference for working with in-house claims teams at MGAs and insurers. Seventy-eight per cent (78%) of brokers find in-house claims teams “more responsive” compared to their outsourced counterparts. A notable 87% of brokers actively seek to collaborate with MGAs and insurers offering an in-house claims service, underscoring a rising demand for streamlined and efficient claims resolution, the report added.
“The latest Broker Barometer results reveal both challenges and opportunities within the commercial motor market,” said DCL claims director Car Cripps (pictured). “It is encouraging to see a greater emphasis on the preference for in-house claims teams and the importance of strong working relationships. These insights will help us and our partners to refine our approaches, not least the emphasis with which we ask brokers to convey to policyholders on adhering to FNOL best practice.”
The Direct Commercial Broker Barometer was commissioned from Context Skythorn, with a total poll size of 127 UK brokers involved in the commercial motor markets. Fieldwork was undertaken in two tranches from February 5-16, 2024, and again from April 30-May 22, 2024.
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