2017年-FCA英国金融行为监管局_handling_of_insurance_claims_for_small_and_medium_sized_enterprises_3页_168kb

Regulator Assessment Summary: TR15/6 - Handling of Insurance Claims for SMEs

Overview

The regulator assessment titled TR15/6 - Handling of Insurance Claims for Small and Medium-sized Enterprises (SMEs) was conducted by the FCA in April 2017. The review aimed to evaluate how insurance claims for SMEs were handled, with a focus on improving processes to better meet claimants' expectations. The assessment was not intended to evaluate compliance with existing rules, but rather to provide more detailed guidance in specific areas.

Core Content and Objectives

• Purpose: To assess the handling of insurance claims for SMEs and identify areas for improvement.
• Scope: A thematic review of the SME insurance market, focusing on claim handling processes.
• Target Audience: Insurers providing insurance for SMEs.
• Geographic Impact: The entire UK.
• Regulatory Basis: The review was based on the ICOBS (Insurance Companies' Own Business Standards) rules, which are high-level and brief.
• Key Areas of Focus:
  • Guidance on mitigating loss for SMEs.
  • Action plans outlining responsibilities and timelines.
  • Proactive communication about claim progress.
  • Speedy payment of claims.
  • Processes to capture and monitor claimant feedback.

Impact on Businesses

Affected Businesses

• Insurers providing SME insurance.
• The market is relatively concentrated, with 10 insurers writing 75% of the SME insurance business.
• 36 insurers have a market share of 0.25% or more, and are assumed to write SME insurance to some extent.

Cost Estimates

• Familiarisation Costs:

  • Reading the 6060-word report by 3 people per firm (2 in claims, 1 in compliance): £6,000.
  • Preparing a summary and gap analysis: £28,000.
  • Total familiarisation costs: £34,000.

• Remediation Costs:

  • Based on the responses of 4 insurers (representing a cross-section of the SME market), the average costs are:
    • One-off costs: £65,000 per firm.
    • Ongoing costs: £58,000 per firm per year.
    • Cost savings: £12,000 per firm per year.
  • For 36 insurers with a market share of 0.25% or more:
    • Total one-off costs: £2.34m (36 x £65k).
    • Total ongoing costs for 10 years: £2.01m (36 x £58k).
    • Total one-off costs (familiarisation + remediation): £2.64m.
    • Total ongoing costs: £2.01m per year.

Cost Drivers

• The main cost driver is the capture and analysis of claimant feedback.
• Costs include:
  • Conducting surveys of SME claimants.
  • Hiring additional staff to analyze survey results.
• Cost savings are primarily associated with the shift from cheque to BACS payments.

Key Findings and Recommendations

• The review identified two areas where firms needed to improve their processes beyond existing guidance:
  1. Enhanced claim handling with specific guidance on mitigating loss, action plans, communication, and payment speed.
  2. Feedback mechanisms to ensure fair treatment of claimants.
• These areas are not directly tied to market share, but rather to the current standards of the insurer.
• The BIT score (Business Impact Tool) for the assessment is 11.5, based on the net cost to business of £2.3k and a Net Present Value of -£19.94 (for a 10-year policy with a base year of 2015).

Additional Information for BIT Score Validation

• The BIT score is calculated using the following assumptions:
  • Price base year: 2015.
  • Implementation date: 2015.
  • Duration of policy: 10 years.
  • Net cost to business: £2.3k.
  • Net Present Value: -£19.94.
• The cost estimates are based on the assumption that experienced compliance staff are employed at a rate of £48/hour.
• The BIT score is considered to be a prudent estimate of the impact on the business.

Conclusion

The assessment highlights the need for improved claim handling processes for SMEs, particularly in communication, payment speed, and feedback mechanisms. While the costs are estimated at £2.64m for one-off actions and £2.01m per year for ongoing costs, the benefits are indirect and primarily aimed at enhancing customer satisfaction and fair treatment of SME claimants. The review does not include data collection for quantifying direct benefits, as it is a retrospective assessment.