Should Insurance Brokers Score Their Insurers on Claims Handling?

Insurance brokers spend a great deal of time assessing insurer appetite, pricing, policy wording and commission.

But there is another factor that can have an equally important effect on the client relationship:

How well does the insurer handle claims?

For most clients, the claim is the moment when they discover whether the insurance they bought actually delivers what they expected.

That means claims performance should not simply be treated as an insurer operational issue. It should be part of the broker’s own management information.

Why claims handling matters to the broker

A broker may have recommended an insurer because the price was competitive and the cover looked appropriate.

But if a claim is subsequently delayed, poorly communicated or handled inconsistently, the client may not distinguish between the insurer and the broker who recommended them.

The broker’s own relationship can therefore be damaged by poor claims service.

Conversely, an insurer that handles claims quickly, communicates well and applies policy wording fairly can strengthen the broker’s relationship with the client.

That makes claims handling commercially important.

What should brokers measure?

A simple insurer scorecard could include:

• speed of initial response;
• time taken to appoint loss adjusters or other specialists;
• frequency and quality of communication;
• average time to settlement;
• number of disputed claims;
• number of repudiated claims;
• complaints arising from claims;
• Financial Ombudsman referrals;
• client satisfaction following a claim; and
• whether poor claims handling caused the client to move insurer at renewal.

The objective is not necessarily to produce a perfect statistical model.

It is to create enough evidence to distinguish between insurers that consistently deliver good outcomes and those that repeatedly create problems.

Put the data alongside the financial information

Brokers already monitor GWP, commission income, retention and new business.

Claims performance should sit alongside those measures.

For example, an insurer might provide excellent rates and attractive commission but have poor claims satisfaction and high levels of client dissatisfaction.

Another insurer might be slightly more expensive but consistently handle claims well and contribute to stronger client retention.

Without capturing claims data, it is difficult to make that comparison objectively.

Score insurers over time

A practical approach might be to score each insurer quarterly across a small number of categories.

For example:

Claims communication - 1 to 5
Speed of settlement - 1 to 5
Fairness and consistency - 1 to 5
Client satisfaction - 1 to 5
Broker experience - 1 to 5

That could then be combined with more objective measures such as average settlement time, complaint numbers and the number of claims still outstanding after 30, 60 or 90 days.

Over time, patterns begin to emerge.

Use the information at renewal

Claims data should also influence insurer selection.

If one insurer regularly causes service problems, the broker should understand whether continuing to place business with that insurer is in the best interests of clients.

Equally, insurers delivering consistently strong claims outcomes should receive credit for that performance.

This does not mean selecting insurers purely on claims experience. Price, coverage, financial strength, appetite and service all matter.

But claims performance deserves a place alongside them.

Claims data can strengthen the value of the brokerage

For owners considering an eventual sale, there is another benefit.

A brokerage that can demonstrate strong client retention, good claims outcomes and disciplined insurer selection has a more compelling story than one that can only produce GWP and commission figures.

It demonstrates that the broker actively manages the quality of the client experience.

That may ultimately contribute to stronger retention, better insurer relationships and more predictable recurring income.

The claim is where the promise is tested

Insurance is unusual because clients often buy a product they hope never to use.

When they do need it, expectations are high.

That is why brokers should measure claims handling just as carefully as they measure sales, renewals and commission.

Because the claim is not simply the insurer’s responsibility.

It is also the moment when the broker’s recommendation is tested.