Performance to be proud of
Lloyd’s managing agents have agreed claims incredibly swiftly following this season’s spate of Atlantic hurricanes. On average, claims arising from Hurricanes Harvey, Irma, and Maria have been agreed in less than five days...
At a time when the mood in the market sometimes seems gloomy, with the pressure of competition from other centres and the challenges of still-soft pricing, Lloyd’s excellent claims response is something we should shout about.
From data held centrally approximately 4,000 agreed claims, the average time between brokers giving notification to lead underwriters and receiving bureau notification of claims agreement was just 4.9 days. The LMA also found the average lead insurer response time was an impressive 2.2 days. Central settlement adds approximately three days.
To date, the LMA estimates the Lloyd’s market has now paid over $1bn in claims as follows:
- Irma – 3,000 claims notified, approx. $630m settled
- Harvey – 2,200 claims notified, approx. $323m settled
- Maria – 350 claims notified, approx. $115m settled
While the hurricanes were obviously terrible for those caught up in them, they have provided an extensive and real-life stress test for the Lloyd’s market. The response to an unprecedented series of major events has demonstrated the market’s ability to handle complex claims and the related volume efficiently. In such circumstances, it is vital that money reaches policyholders as fast as is possible and our findings indicate that the market has been working hard to ensure this has happened. Given that the claims service has regular customer touchpoints and the claims service provided becomes the single most important factor when a policyholder suffers a loss, we should be doing everything possible to ensure that the customer experience and claims service is prioritised within market modernisation initiatives. Putting the customer at the heart of a future claims servicing and operating model is key.
The storms also provided a test for the LMA’s new satellite imagery and intelligence service, which was triggered for the first time by Hurricane Harvey. It provided ‘ground truth’ in the immediate aftermath of the storms to support managing agents in their swift claims decisions. The McKenzie Intelligence Service (MIS) provided vital intelligence, for example showing coastal areas of Naples, Florida to have suffered only light wind and flood damage, contrary to reports of large-scale flood and wind damage throughout Naples. Satellite imagery also showed that buildings compliant with post-1992 Hurricane Andrew regulations in areas such as Fort Myers and Tampa suffered only superficial damage.
Aon Benfield corroborated the LMA’s findings after undertaking its own analysis. Steven Clark, their executive director for claims and client services, said: “The data so far shows a strong performance by the Lloyd’s market. In what has been a very challenging period, Lloyd’s has demonstrated an unwavering commitment and support to their client base. Lloyd’s has adopted a very considered and measured approach to advance payment requests and executed these in a professional manner.”
Every one of us in the market can be proud that the first response of the Lloyd’s community was, within days of the three storms’ passing, to pay claims. They continue to be settled unabated across the Caribbean and Florida, with claims teams focusing intently on getting the job done. Once again, when it really counts, the market is living up to Lloyd’s reputation for paying valid claims as quickly as possible.
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