Poll Results – Outsourcing Clients’ Claims

The majority of advisers have said they prefer to manage their clients’ claims, rather than outsource them.

Advisers have made this assessment following our report last week on the emergence of claims advocacy services (see: Lack of Time Driving Advisers to Claims Services).

As we go to print, 84% of those taking our poll have effectively rejected this external service option for their own clients; the prevailing attitude encapsulated in one adviser comment that:

…your key responsibility is to stand beside the client at claim time

“For anyone writing risk, your key responsibility is to stand beside the client at claim time.”

Another point made by a Riskinfo reader in arguing advisers should represent and serve their clients at claim time goes to the receipt of renewal commissions, and that advisers have argued over the many years of the broader commissions debate that the renewal commission they receive assists, at least in part, in funding the time and effort usually associated with facilitating a claim on behalf of a client.

On the other side of the coin, one comment we received argues that changes to the regulatory landscape and the increase to ‘end-to-end’ costs in running an advice business have set up an environment in which a claims advocacy service could work well. Responding to the argument that facilitating claims is the most important part of any adviser’s service process for their clients, this comment noted:

“With the myriad of hats an adviser needs to adorn, which one of those hats gets the adviser’s full undivided attention, 100% of the time? None. So, is it not better to outsource the most important …area of advice to specialists who do spend 100% of their time with just one – the most important – hat on? Or is it better to continue to do a whole lot of things, at half measure?”

So, these are the two fundamental arguments:

Against outsourcing claims

• Helping clients with their claims goes to the heart of risk advice and the entire reason many advisers do what they do.

In favour of outsourcing claims

• Claims advocacy firms are focussed 100% of the time on achieving the best outcome for the claimant, which gives the adviser more time in their week to address other aspects of their business, such as compliance, other customer services and new business development.

As usual, there are nuances to any argument. For example, holistic advisers (as opposed to risk specialists) may find more value in outsourcing their clients’ claims, while other advisers, holistic or risk-focused, may want to consider the complexity of individual claims and potentially outsource the more difficult cases to expert industry advocates.

In any case, you will have your own opinion, which we encourage you to share, as our poll remains open for another week…