Chubb Study: Service Key To RM Buys

"Risk managers dont want to be "bogged down with a claim problem," he continued. "The sooner they can get through it, obviously the better. They can get back to what they do."

"This is what an insured expects from a carrier," he said.

Mr. Korsgaard explained that although "everyone wants to pay less for coverage," the survey demonstrates that "price is not the driving factor in selecting an insurance carrier."

The events of Sept. 11, he said, have proven the value of working with a financially strong carrier "that delivers on its promise" to pay claims fairly and expediently.

"Even those risk managers who did not report a loss as a result of Sept. 11 indicated a high level of ongoing evaluation of their insurers claim service," he said.

Of survey respondents, 76 percent said claims services were the major, or a significant, factor in selecting a new p-c insurer. Seventy percent reported that claims service is highly important in evaluating their current property-casualty insurer.

Some 36 percent reported that they have terminated a relationship with a p-c insurer because of poor claims service.

Respondents with claim-related communications issues highlighted the issues of timely updates and ease of claim reporting.

Service "convenience factors," such as claim office locations and multilingual claims professionals, were of lesser importance, the study found.

Those who reported having filed a claim related to Sept. 11 demonstrated a heightened awareness of the importance of claim service, the study found.

This group noted that post-Sept. 11, the quality of an insurers claim service has become "more important." They also "very often" have met with an insurers claim professional before placing business with an insurer.

Finally, Chubbs survey revealed that there is no clear correlation between an insurers financial strength and the quality of its claims services.

Respondents rated the claims service reputations of 17 major p-c insurance companies that hold A.M. Best ratings of "A-minus" or better, assigning a score of "1″ for "very poor" reputations and "5″ for "excellent" claims service.

When Chubb averaged the scores for each of the 17 insurers, the study found that both the highest and lowest scoring insurers were rated "A-double-plus" by A.M. Best. The risk managers, as a group, gave those unidentified insurers average scores of 3.74 and 2.49, respectively.

"Since Sept. 11, many risk managers are placing greater importance on the financial strength of their insurance carrier," Mr. Korsgaard said.

Although an insurers ability to pay is clearly linked to its financial strength, he said, "the quality of its claim service has much more to do with issues such as fairness and speed of payment. Those insurance companies that are financially strong and demonstrate the claim service attributes risk management professionals value most have the competitive edge."

"Chubbs Claim Service Survey: Influencing the Insurance Purchase" was conducted over the Internet and received responses from 400 risk management professionals almost entirely from the United States and Canada, according to Chubb.

The respondents answered 25 questions, several with multiple parts and rankings, the company said.

Respondents represented both publicly and privately-held companies in all types of industries. Fifty-seven percent had annual revenues of $1 billion or more.

Copies of the survey are available on at www.chubb.com/rims/2002survey.pdf.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, April 22, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.