As the world begins to move again and we head into the warmer months, there are several worrying trends impacting severity mixes and resourcing for carriers. From increased auto claims to extended periods of leave, we explore how carriers can flex and adapt to meet this change in demand.
As the world begins to move again and we head into the warmer months, there are several worrying trends impacting severity mixes and resourcing for carriers. From increased auto claims to extended periods of leave, we explore how carriers can flex and adapt to meet this change in demand.
1) Increase in motor claims
While we naturally saw a decline in the frequency of auto claims during the pandemic, we are set to see a spike as the world begins traveling again. Australian carriers have already seen this tragic trend play out, with an increase in road deaths and crashes as travel restrictions lifted late last year.
With the increase in road trip travel, we are already seeing increased volume and severity in auto claims. We’re no longer managing low-speed fender benders, but high-speed, high-impact crashes, causing severe brain injury or death.
In fact, recent data in the United States indicates that while miles driven per vehicle decreased by 13% in 2020, the mileage death rate was up to 24%. While people were driving less, those who were on the roads were more likely to be partake in risky behaviour – such as speeding or driving under the influence. As more people start to head back out onto the roads, we expect this change in severity will impact carrier’s forward planning and see an increase in complex claims and costly payouts.
So, how can we as an industry respond to this?
Carriers should take a two-pronged approach to slow this trend:
First, start with a thorough and complete review of how this phenomenon is impacting your internal employees and external policy holders. Understand the changes to severity mix and risks your team are facing as they begin to adapt to a new normal. Consider how your reinsurance and costing models are scoped to cover an increase in high-impact crashes, and how your policies and technologies are equipped to respond to this.
Second, it’s important to consider how your team is trained to handle highly-distressing, sensitive claims. A carrier’s reputation, and ongoing litigation costs, can be shaped by how these high-impact claims are handled. If you have an empathetic, customer-oriented claims team capable of handling distressed claimants with care, you’re on the right path to success.
2) Staff on vacation
Now with vaccine rollouts ramping up and travel becoming more appropriate, carriers must also consider how to plan their resourcing as teams start to take well-earned vacation time.
As we head into what is likely to be a busy summer break, carriers should take into consideration how they’ll manage claim surges and low staff levels. This is a good time to consider outsourcing claims management to alleviate pressure on your internal team and reduce the risk of burnout. It’s been a truly tough year for everyone, and as we start to open back up, many of your employees may be in need of a break. Consider the support of a leading third-party administrator like Gallagher Bassett to offset the pressure on your team.
By partnering with GB, you can diversify your talent pool with a greater depth of skills and gain access to our expert team, while yours is on a much-earned break, in a cost effective and flexible manner. Our global network of local experts means we can customise our solution to your business needs and lines of operation. You can scale up and down and have comfort in our superior onboarding process which leads to cost savings without sacrificing customer service.
To learn more about how we can help you tackle these two summer trends, connect with our team of experts.
