Insurers need to be consistent when assessing claims because brokers have entrusted their reputations to them, Suncorp Commercial Insurance CEO Anthony Day says.

Speaking at the CC12 Claims Convention in Sydney last week, he said it is important for brokers to have developed trust with insurers’ claims staff.

“They want to form relationships and deal with the same people as much as practical,” he said. “They want access to decision-makers if the claim is difficult or goes off the rails.”

Mr Day says brokers expect insurers to be responsive and the claims process to be fair and reasonable.

Calling on insurers to also be consistent “because getting it right sometimes is pointless”, he told the convention that claims service and management start with risk selection and asking the right questions.

Insurers also have to write attractive risks at the right price, Mr Day says.

“There has been some irrational pricing by some insurers in recent times, which will undoubtedly come back to haunt them in the future.”

He says insurers must have well-trained staff and not allow leakage that “creates inconsistencies in interpretations and outcomes and ends up in high renewal premiums”.

Mr Day says claims are the largest single expense for insurers so there are significant benefits for them in reducing claims costs.

“Operational excellence in claims management is a key factor in driving an insurer’s profitable growth,” he said. “Reducing claims costs by even a small percentage can have a very positive impact on an insurer’s bottom line.”

He says if 65% of $2 billion earned in premium is paid back in claims, a 1% reduction can save an insurer $20 million.