Ever since they first began appearing from murky corners of the industry back in the late nineties, ambulance chasers have never been particularly good at making friends. The thorny issue of claims farming has consistently remained on the lips of insurers and brokers alike ever since they first boomed from our TV sets advising us to sue everyone and anyone.
If there’s blame there’s a claim. The epitome of the nanny state. They exist at the heart of compensation culture. In fact they are the wholly accountable for the whole bloody system. Professional parasites feeding off us all.
As you may have guessed I’m not a fan.
Yet somehow they defiantly remain a part of the industry and worryingly it seems some brokers are leaning towards the easy ‘quick fix’ solution they can offer. Lets be honest times are tough and the majority of us are having to work that little bit harder for a hell of a lot less. With the ridiculous increases in the FSCS being the latest over the top fee handed out to the broker community by the ever incompetent FSA, a little extra revenue from those damn ambulance chasers could prove highly tempting right now, but what is the real cost of this short term financial injection?
Trevor Cutts, business development director at independent broker network 1 Answer Network recently commented that the practice of claims farming threatened to undermine not only the claims process but also the very ‘integrity of the industry’ itself. For an industry dependant upon consumer trust, anything that can damage the broker/client relationship is of course inherently dangerous.
Of course as Mr. Cutts is quick to address there is a massive difference between a broker operating a legal expense policy, working in tandem with a reputable claims management company and the more ‘questionable approaches’ made to claimants years after their claim, looking to seek unmerited awards retrospectively.
Often one will find that a law firm will have a surge in claims, and when this is the case there often tends to be generally one particular insurer involved. Whether the lists are generated by an insurer or a broker, the suggestion would certainly be that someone in the chain is selling on these claims for a quick buck. Neglecting the clients needs entirely – how quickly will it take that client to lose faith in both their broker, insurer and even the industry itself?
Commenting on the subject, Mike Keating, Head of Personal lines intermediary at Axa, actually went as far as labelling any company who make money from the practice of claims farming as ‘immoral’.
Describing what he sees as an ‘alarming feature of the market’ he acknowledged that the rise in claims farmers is a ‘disturbing trend’. In fact Axa are now one of a number of insurers who are introducing clearly differentiated pricing, aiming to penalise those brokers that claim farm and benefit those that don’t.
The good news is that the public are slowly starting to turn away from these parasites also. Whether it is the numerous horror stories of people being out of pocket even after having won their case, or perhaps just the sheer mindless, monotony of those bloody adverts, the reputations of many claims farmers are now in tatters.
Hopefully with the industry seemingly united on ensuring that the claims farmers are driven out of town the reputations of brokers and insurers will escape relatively unscathed.
Mr. Keating states that he ‘doesn’t think brokers believe that any model reliant on claims farming is sustainable.’
For the sake of the industry lets hope he’s right.
Source: www.insuranceblog.co.uk
