Renewal process should start 60 days earlier


The renewal process should start up to 60 days earlier than it does presently to allow the buyer of insurance to have the policy that they want and expect on day one of the insurance period.

That is a key recommendation of a new publication launched at the AIRMIC risk management conference taking place in Birmingham, UK.

Speaking at the opening of the conference, John Hurrell, AIRMIC’s chief executive officer, explained the relevance of the document, which is titled Efficacy of Business Insurance.

“It is now a relatively routine and frankly understandable process for insurers to refer major claims to their coverage lawyers - and of course those coverage lawyers have a duty to advise if there is any defence point that the insurer should consider in relation to any major claim,” he said.

“If the insurer is given a defence point by the coverage lawyer it is very difficult to proceed to settlement. This is the moment of truth – will the insurance policy pay out as intended, that is, in full and in a timely fashion?”

He said that by talking to brokers, insurers, loss adjusters and lawyers, AIRMIC’s representatives have developed a good idea of what can go wrong – and that the good news in almost every case is these problems can be avoided by undertaking a rigorous process prior to the inception of a policy.

“To this end we prepared this document - Efficacy of Business Insurance. Our recommendations in here will require everyone to think a little bit differently about the attachment process,” he said.

Explaining the document’s recommendation that the renewal process should start up to 60 days earlier than it does at present, he said: “There is no other business in the world where contracts with so much at stake are entered into before the final contract wording is available.”

The document therefore recommends that policyholders should seek independent legal advice on the wordings against specific scenarios that concern them and their boards prior to entering into the contract.

“We also make recommendations on how to overcome the imbalances which are inherent in the current law which are being addressed by the Law Commission,” he said. “We are assuming the Law Commission’s cavalry is not going to arrive just yet, despite the excellent work undertaken to get the draft bill before Parliament.

“Make no mistake, the implications of our guide are profound and we do believe the steps we are recommending can help improve levels of confidence in claim certainty.”

AIRMIC, Europe, John Hurrell

Intelligent Insurer