Claims handling times have increased and there’s a significant difference between the performance of different insurers in the current environment, Gallagher says.

“Across the board, market conditions have meant that claims are being scrutinised more closely than ever, and claims teams have reduced authority to make decisions,” Head of Claims Adam Squire says in the broker’s latest Business Insurance and Risk Market Update.

The issue has been compounded by a reduction in qualified professionals who can take up claims roles for insurers as “ready-made” personnel.

“The combination of changes in staffing and resource pools with the increases in the complexity of claims assessments has resulted in an increase in the average time involved in claims management,” Mr Squire says.

“Two years ago, an average complex claim would take 14 or 15 interactions, today the average complex claim takes 20.”

Gallagher notes a significant difference between insurer claims departments that are doing well and those that are not in the current circumstances.

The broker sees indications that the pace of premium increases is easing, although the report says there is little indication the hard market is turning around to a major extent as insurers continue to feel the impacts of large losses from major catastrophes.

“There are some signs that the worst is behind us,” MD Market Placement and Insurer Relations Mark Oatway says.

“The market is beginning to stabilise and we’re starting to see 10–20% increases, rather than the huge, dramatic increases we’ve experienced recently,”

Insurers globally are looking more at the culture of companies and their environmental, social and governance strategies, with the scrutiny particularly affecting businesses operating in coal and energy production.

Companies will be better placed if they can show how they are offsetting any negative environmental impacts and can demonstrate that they are contributing positively through social responsibility initiatives, Gallagher says.

Mr Oatway says the hard market has forced businesses to look at insurance in a different way, encouraging them to see it as a partnership that’s as crucial to their future as their banking relationship, rather than regarding it as a simple transactional purchase.

“When you’re operating in an environment with limited capacity and increased scrutiny, it’s important to remember that the insurer isn’t just buying the risk,” he says. “It’s buying into you and your business. And the importance of that cannot be underestimated.”