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Claim handling times lengthen in tough market

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Claims are being scrutinised more closely and handling times have increased amid the current hard market conditions, Gallagher says.

The issue has been compounded by fewer “ready-made” professionals available to take up claims roles for insurers, while teams also have reduced authority to make decisions, Head of Claims Adam Squire says in the broker’s latest Business Insurance and Risk Market Update.

“If you’ve had to make an insurance claim over the past 12 months, it is likely to have taken more time to resolve than it would have done in previous years,” Mr Squire says.

Two years ago, an average complex claim would take 14 or 15 interactions compared with about 20 today, and there’s a significant difference between insurer claims departments that are doing well and those that are not in the current environment, he says.

The Gallagher update says overall the pace of premium increases is easing although there is little indication of a significant turnaround as insurers continue to feel the impacts of large losses from major catastrophes.

“Hard market cycles typically last for about 18 months before an insurer breaks away and drives some competition that gives everything a bit of a kick start, but the current market shows little sign of turning around to any major extent,” MD Market Placement and Insurer Relations Mark Oatway says.