A plan to liberate intermediated motor claims

IN Partnership with

There is a better way to handle intermediated motor claims, and AAMC is on a quest to save customers time, money and heartache – plus substantially improve the process for brokers

IN THE words of renowned architect and systems theorist Buckminster Fuller, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” It’s not clear if Daniel Lukich, sales and strategic relationship manager at specialist accident management and assessing services firm AAMC, has been reading his Buckminster Fuller. Let’s just say he is restless and sending out the call for change to any like-minded revolutionaries in the intermediated commercial motor claims process. “There is a better way, a smarter way of looking at this critical stage of a claim that has for far too long been overlooked by the sector,” says Lukich. His gripe is with the initial claims notification for commercial motor, which, compared to other insurance lines such as personal lines, remains a clunky, multistep experience for the broker, customer, underwriter and service provider. The contrast between intermediated motor and other types of claims has only become more glaring with the tech advances introduced in recent years for many claims processes. “If you're a bricks-and-mortar retailer, the broker can appoint the insurer's panel suppliers to perform make-safe or emergency repair [immediately] or engage a loss adjusting company whilst the claim form is being completed,” Lukich says. “Yet in motor, they don't.”

AAMC is Australia’s largest provider of accident management services to Australian motor insurers. The business provides nationwide motor assessing and accident management capability and supports motor insurers, brokers and corporate fleets to realise cost and quality outcomes within their claims strategies. Over 20 years, AAMC has developed technical expertise and capabilities to manage all aspects of motor accident repair, regardless of vehicle type. This includes a customer contact centre, a network of partnered repairers, and a team of technical experts to mitigate repair costs. AAMC processes over 120,000 accidents annually and enjoys established relationships with all major insurers and brokers.

Find out more

Ideal scenario: assessor/loss adjuster involvement from outset

Incident

“[Give] brokers the autonomy to appoint a specialist at the point of claim inception”

Daniel Lukich, AAMC

However, he adds, nonprofits have been resilient. “Most of our insureds are not only recovering back to their pre-pandemic state, but are in fact expanding,” he says. Parvathy Sree, vice president of nonprofit underwriting for AmTrust Financial Services, agrees. She says some nonprofits, such as homeless shelters and schools, adapted particularly well to the challenges. “Nonprofits with good management and decent financials were able to survive the last year and are seeing the fruits of their hard work and diligence,” Sree says, but she cautions growing organizations to be diligent with loss control and risk mitigation, emphasizing that while claim counts are down and court cases are in limbo, things could change.

Angry customers, devalued brokers With an intermediated motor claim, the broker facilitating the initial call and claim form completion with their client is required to notify the underwriter, who then registers the claim, which in turn proceeds through a variety of internal steps and decision points. What AAMC frequently sees as a result of the steps in this long bureaucratic chain is that the vehicle involved turns out to be an ‘outlier’ that is outside what the insurer can remedy

using its own resources. Think of heavy commercial transport, agricultural machinery and the like. These cases eventually find their way to AAMC and similar firms, usually weeks after the accident has occurred. Not surprisingly, when AAMC reaches out to the customer, the company finds itself dealing with business owners who are less than pleased to still be in essentially the same position as on the day of the accident. With commercial vehicles that can generate thousands of dollars of revenue a day in some cases, this Kafkaesque way of doing things is an enormous albatross around the necks of everyone involved in the process, from customer to broker to insurer. It’s hard to think of anyone who benefits from the way things operate now. The process is even more difficult for a customer to understand if they compare it to what happens when a private vehicle is involved in a prang. Because a dent in a Hyundai is not an outlier case, the engagement with the insurer is quick and easy. This results in a situation in which individuals get a much better motor claims experience for a few hundred dollars a year by going direct to an underwriter, in contrast to large commercial customers who pay hundreds of thousands of dollars a year through an insurance broker. No wonder people are frustrated.

AAMC, why subject them to this sea of red tape and competing interests? “We’re not asking for more work as such, but where we are usually engaged to provide specific support, whether that's regional coverage, technical skill or capacity, let us have visibility of that earlier so we can do a better job for you and your customer,” he says. In an ideal world, notification about the need for specialist motor accident management services would be given when the broker is initially informed of the claim, so they can set processes in motion right away. After registration, different departments within insurers actually slow down the process. For example, if claim information is missing or incomplete, it sparks an email chain back to the customer or broker, and the claim won’t proceed until that information is provided. “The biggest barrier is the silo approach, where each department has specific functions that are not linked to an overall quality outcome in terms of speed,” says Lukich.

“Where we are usually engaged to provide specific support … let us have visibility of that earlier so we can do a better job for you and your customer”

Daniel Lukich, AAMC

Allowing firms like AAMC to have visibility of the claim from the outset would relieve internal pressures at insurers and free them up to pursue the claims that they can actually take to completion. Lukich says insurers will be able to better focus on the 90% of non-outliers if the system is reformed. “[They’ll] do that more efficiently because the outliers aren't on your desk any more. And you're not having to put out spot fires all the time,” he says. “It's really just identifying and formalising criteria and giving the

brokers the guidelines to say these ones go to AAMC and these we'll look after.” The bottom line So, what would altering the intermediated claims process cost? Not much, apparently. Implementing this reform would involve minimal organisational change and financial resources. Lukich says the reduction in operational expenses alone would more than offset any outlay.

Broker contact

Claim initiated

Advise AAMC (criteria to be determined by insurer) early identification of repair or total loss initiate temporary repairs to maintain business continuity

Benefits to each party

To broker

Provides tangible value to customers; less claim chasing

To customer

Less inconvenience; minimised business interruption and downtime losses

To insurer

More control over claim costs, internal efficiency gains

Source: AAMC

Example: AAMC nominated as claims assessor at point of claim inception

“The broker’s value is substantially undermined,” says Lukich. “So our argument is that this gap can be sorted by giving brokers the autonomy to appoint a specialist at the point of claim inception.” If you are having a ‘duh!’ moment right now, you’re not alone. “When you talk about this logically to some senior claims managers, they think it's a no-brainer,” says Lukich. He has received a strong response since highlighting the issue in a series of recent outreach efforts, including fielding enquiries from major insurance brokers in Australia and New Zealand, even though AAMC only operates in Australia. The resistance Lukich sees the problem as a legacy issue, mostly due to disconnected departments within insurers, as well as misplaced fears of loss of control if these inefficiencies in the system are removed. But he says the exact opposite is true and that, with such changes, the motor claims process would in fact end up being much more efficient and effective. If we take the view that only 10% of motor claims fall into the outlier category and end up getting kicked on to companies like

*Based on actual case in 2021 via broker, involving freightliner and two trailers in Toowoomba that generated $3,000/day in income

Time to vehicle recovery activity: Same day as accident

Time to total loss report: 2 days

Time to underwriter settling total loss: 1 week

Time saved compared to regular process: Around 2 weeks

Money saved for customer compared to regular process: $42,000*

In the current economy in which businesses are looking to reduce overheads, it’s a compelling argument. “Everyone's experiencing the same cost pressures where repair costs are going up, time off road is extending, good staff are hard to find, and the economic situation is pushing things to be done more effectively with less people,” Lukich says. He says 80% of the touchpoints in these claims would disappear overnight if things were done his way, and that’s without even taking into account the introduction of digital technology to further speed things up. The benefits to brokers would come from eliminating frustrating calls to chase up updates on claims. There would be fewer disgruntled customers. The incentive for clients to question the value of their broker would disappear and retention rates improve, as the economic impact of an accident would drop if valuable commercial vehicles spent less time in claims limbo, says Lukich. “It's that immediate response; it's getting [the vehicle] back on the road so they can service their clients and not be financially disadvantaged.”

Insurers likewise would be diverting claims that they are unlikely to be handling directly anyway, keeping customers happy by providing more clarity and certainty sooner in the claims experience, yet maintaining an overview of the whole process through the AAMC partnership. “It gives the insurer more control, because they have visibility of the claim earlier through a partner.” All Lukich needs is a few more frustrated claims desperados. Viva la revolution.

Key Media

Insurance Business America

Insurance Business Canada

Wealth Professional Canada

People

Terms & conditions

Conditions of use

About us

RSS

Asia

SPECIALTY

BEST INSURANCE

RESOURCES

RISK MANAGEMENT

FEATURES

NEWS

People

Terms & conditions

Conditions of use

About us

RSS

Asia

specialty

Best Insurance

Resources

RISK MANAGEMENT

FEATURES

News

People

Terms & conditions

Conditions of use

About us

RSS

Asia

specialty

Best Insurance

Resources

RISK MANAGEMENT

FEATURES

News