Eddie Longworth, chief executive at E2E Total Loss Claims Management, discusses how the claims sector can utilise Consumer Duty to build trust with the paying public
According to the latest WTW and the Confused.com Car Insurance Price Index, published January 15 2025, the average price of motor insurance fell by 16% in the last 12 months to an average level of £834.
Drivers in London, Manchester and Merseyside saw a decline of almost 19% and, across all age groups, younger drivers fared the best.
That’s the good news.
On the other hand, the Which? website features a campaign entitled ’End the Insurance Rip Off’ with 123,000 signatures. And its latest research, published within the last few days, is particularly scathing about the state of claims handling in the industry.
Of course, it is perfectly possible to reach wildly different conclusions from the same data – with the oft-quoted expression that there are “lies, damned lies, and statistics” never more appropriate than in the insurance sector.
Nevertheless, the gulf of misunderstanding between professional and consumer facing bodies would seem to be as wide as ever.
Casual fraud
Nor is the effect felt only in the pricing and distribution channels. Policyholders who are convinced their insurer is overcharging and under-delivering will think little of committing casual fraud – exaggerated claims, false declarations, hidden risk factors that would normally add to the cost of an insurance premium.
These are not the hardened criminals and fraudster gangs who prey on the innocent consumer by driving prices higher than they otherwise would be but, instead, the ‘person in the street’ who feels justified and vindicated when they successfully fool their insurer into paying out monies that are not actually due.
Consumer Duty rules
All of which leads me to detailed consideration of the sector in which I now operate – the total loss claims management arena, where not only has the policyholder been involved in a motor accident, but the severity of the incident is such that the vehicle has been ‘written off’ by their insurer.
Based on the Which? supposition that insurers are ‘ripping off’ their customers and – even worse – the public believing them, we can be quite sure that the ingredients for conflict, disbelief and distrust exist in abundance.
Listening in to conversations between the highly knowledgeable and experienced staff at our head office and the mistrusting consumer, it is clear this gulf is costing insurers money, increasing stress levels for everyone and unnecessarily delaying settlement and the release of funds that might be needed to purchase the replacement vehicle.
In our view, the key to resolving this situation lies with the principles and practices of the Consumer Duty regime – which is not an obligation or requirement, but an opportunity to drive internal cultural change leading to external improvements in relationships with claimants.
Put simply, if the policyholder can see that there is a set of rules that insurers willingly abide by, and these rules are meaningful and fair, then it is to be hoped that over a period of time there will be something of a sea-change in behaviours by all parties.
When designing and then constantly refining a total customer experience, we believe that the Consumer Duty is a great help in establishing the signposts, driving new processes and reducing delays. Instead of trying to fulfil the Consumer Duty regulations as an audit requirement, we take it as being the core building block of who we are, how we work and the service we provide to claimants and clients alike.
It has been said that ”culture is what you do when no-one is looking” and, to my mind, the very embodiment of that invisible culture is the Consumer Duty.
It’s not what you do, it’s how you ‘think’.
