Outsourcing Claims Services?

Strong engagement with our report last week on the outsourcing arrangement struck by Viridian Advisory for the processing of the AFSL firm’s client TPD claims has led to this latest poll for your consideration (see: Viridian Outsources TPD Claims).

For many, if not most risk advice propositions, the critical assistance provided by an adviser to a client in the submission of their life insurance claim has been an integral and fundamental service associated with their commitment to the client. Historically, it has almost always been a ‘given’.

Fast forward to today’s advice environment, however, which consists of an emerging host of factors which have contributed to advisers, advice practices and dealer groups considering the merits of outsourcing their claims services or at least the more challenging claims. Those factors include:

• The ever-growing complexity associated with submitting a claim and achieving a successful outcome for the client, especially given the sometimes lack of expertise possessed by non risk specialist advisers and generalist/holistic practices
• The prolonged delays associated with many claim submissions and the associated time and effort required of the adviser and support team members
• Mitigating any potential action brought by non-sector legal firms engaged by the client, where the advice business or dealer group may be subject to litigation over the role it played in a declined claim outcome

…complexity and expertise, time and resources, and litigation concerns loom large as key factors

There are other factors potentially at play as well, but these three elements, namely complexity and expertise, time and resources, and litigation concerns loom large as key factors influencing firms such as Viridian and others to explore the path of outsourcing at least a proportion of their book of claims.

Where does your advice practice or dealer group land on this issue? Do you already outsource some or all of your clients’ claims to the emerging cohort of external industry claims specialists such as TPD Claim Support? Do you retain all claims but perhaps apply a fee structure to some of the more complex or prolonged cases? Or do you subscribe to the more traditional view that serving your client at claim time at no cost is non-negotiable and will always remain integral to your service offer?

Some advisers may consider this question in terms of ‘right’ or ‘wrong’. But many more may well address this challenge as one where their position is determined in part by the nature of the adviser/client relationship, the extent of expertise held within the advice business and the need to protect or insulate the business from the trend of modern litigation.

It’s over to you to continue this conversation and we’ll report back next week…