Disclosure, claims-related issues worry risk managers: Airmic study

BRIGHTON, England — Nonpayment or delayed payment of claims is a top concern for U.K. risk managers, according to a study by risk manager association Airmic Ltd.

The survey of 129 members released Tuesday found that claims-related issues are among risk managers’ most pressing concerns.

More than half — 52.6% — of risk managers cited innocent nondisclosure of material information among their top five most pressing concerns, according to the survey presented at the association’s annual conference in Brighton, England.

Some 42.7% cited delayed claim payments as a top concern, while 30.7% cited difficulties in handling large claims.

One-third of respondents cited the use of warranties and basis contract clauses as a top five concern.

Under English law, what is known as a basis clause enables an insurer to avoid a claim if there is any incorrect information in either the proposal form or policy wording — even when that misinformation has no material bearing on the claim.

At the conference Tuesday, Airmic launched a guide for its members on basis clauses and published an endorsement, developed with London-based law firm Herbert Smith Freehills L.L.P., that negates any basis clauses currently in use.

The survey showed that 27.2% of risk managers believe the inappropriate use of a reservation-of-rights clause, which enables insurers to reserve the right to refuse liability for a claim or part of a claim pending further investigation, as a major concern.

And 23.7% of risk managers cited an increase in the cost of handling claims as a top five concern.