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Member, Beacon International Group, Ltd.
LONDONThe United Kingdom's risk management association is looking at ways to develop a model to measure insurers' willingness to pay claims.
Paul Hopkin, technical director at the London-based Assn. of Insurance & Risk Managers, said the buyer body was interested in developing a sophisticated model to give insurance buyers objective data about insurers' willingness to pay.
When risk managers are judging the performance of their insurers, or looking to change insurers, price is an easy way to benchmark, said Mr. Hopkin.
And credit ratings can give an idea of insurers' ability to pay claims, he said.
But a way of judging willingness to pay would be "a helpful extra component" for risk managers when assessing their insurers, he said.
Mr. Hopkin said that, to his knowledge, no objective model for measuring willingness to pay exists.
He said that while AIRMIC members sometimes get superb service when they make claims, this is "by no means the norm."
Buyers want their insurers to be fair and transparent, Mr. Hopkin said.
There are ways in which insurers' willingness to pay claims promptly can be judged, he said, such as how often they appoint loss adjusters and whether they have key performance indicators on responding swiftly to correspondence, among other things, Mr. Hopkin said.
For some lines of coverage--business interruption, for example--claims are not always paid in full, said Mr. Hopkin.
AIRMIC plans to conduct a pilot study into willingness to pay business interruption claims with its partners and loss adjusters, he said.
AIRMIC's partners, which include insurers and brokers, provide the association with funds to undertake training and education, among other things.