Motor insurance firms are advised to utilise their data to better demonstrate customer outcomes

The FCA recently released new findings into its review of how motor insurance firms handle claims for valuing stolen or written off vehicles.

The survey, which comprised 12 firms, targeted organisations that collectively make up around 70% of the market to give a clearer picture of good—and not so good—practice. This includes commentary on how motor insurance firms:

• Reach the valuation of vehicles
• Communicate an initial offer
• Manage disputed valuations
• Handle policies after a claims’ settlement
• Collect data and management information

Although the Consumer Duty was not active during the period of review, the regulator has interpreted where it sees shortfalls in the practice of compliance obligations.

The FCA is keen to emphasise that it will act if firms fail to heed their findings and take corrective action if necessary: “We expect firms to be able to demonstrate how their valuation approach and broader total loss claims handling processes reflect the expectations we have outlined.

“We expect Senior Managers to engage in the findings of this work, and will hold them accountable for ensuring that they have considered our findings to ensure that their own processes meet our requirements.”

Use your data and MI to proactively identify issues that may lead to foreseeable customer harm

Throughout the regulator’s findings, a varied range of examples are given about areas firms may need to improve on, such as:

• Using multiple methods to establish a claim settlement value, and little evidence to demonstrate how requirements under the Consumer Duty were met. Firms are expected to use data to actively recognise where any issues may occur – and take subsequent steps to monitor outcomes
• Unfavourable settlement offers – some firms provided initial settlement offers that were less than the vehicle’s estimated market value – but increased the offer if the customer challenged or complained. This could result in varying or unfair outcomes for customers, depending on their willingness to complain
• Failure to provide full claims information – many of the reviewed businesses failed to gather essential information regarding total loss claims, including the quantity, magnitude, and factors contributing to adjustments in initial settlement proposals. Complaints data alone was often relied upon to determine whether there were any concerns with the claims processes

Show the visibility of your end-to-end process

So, what steps can motor insurance firms take now to demonstrate that poor outcomes for affected claimants are being mitigated in their business?

A diligent approach is to collate and effectively monitor your customer data – which has been repeatedly flagged by the regulator as a key piece of the puzzle.

Recordsure’s Conversation Intelligence offers an innovative and efficient solution to insurance firms

Businesses can gain 100% oversight of their own customer interactions – and in turn – effectively use this data to monitor and improve company processes – and demonstrate the achievement of customer outcomes.

Our AI-powered RegTech can take your customer/adviser dialogue – whether that be by ingesting recordings from your own telephony systems or using our unique Capture app to record face-to-face or online conversations – and transcribe, assess, and segment conversations to suit your business needs.

Conversation Intelligence can quickly identify high-risk cases that require the most attention. This gives your reviewers the opportunity to focus their efforts on areas that need it most – including resolving any issues and preventing complaints. This can help satisfy the regulator’s appetite for firms to deliver fair value for claimants who have had their vehicles written off or stolen.

Even better, our unique approach to smart segmentation of customer conversations means your team can complete reviews in half the time, freeing up skilled staff to handle other important tasks.

Utilise the power of your data for compliance

Sheldon Mills, Executive Director Consumers and Competition at the FCA, recently said, “Insurance firms should offer settlements at the fair market value. This is especially important now as people are struggling with the cost of living will be hit in the pocket at precisely the time they can ill afford it”.

Bearing this important point in mind, it’s vital to unlock the power of your data to demonstrate your valuation approach and associated customer communication to the regulator.