Subrogation portal will reduce frictional costs and speed claim resolution

Aviva, the UK’s largest insurer, and Ageas have secured an agreement which will reduce the cost of handling third party motor claims between the two insurers.

The agreement is the first insurer-led arrangement following the 2014 Competition and Markets Authority’s ruling on motor claims which effectively left insurers to find better ways of working in order to reduce the cost of non-fault claims.

At the heart of the agreement is a subrogation portal provided by Validus-IVC that is already reducing the number of touches between the two insurers when subrogating the cost of a non-fault claim. The portal matches claims, views on liability and requests for payment without the need for letters or phone calls. Not only does this allow handlers to look after the customer’s car and better address their concerns, it also ensures that both sides know much earlier that they are both dealing with the same claim, which speeds up the claim’s resolution.

In addition, both insurers have entered into a (bi-lateral) agreement that will keep the cost of subrogated claims as low as possible, as it prevents insurers from charging one another unnecessary costs which only serve to increase insurance premiums.

Andrew Morrish, Claims Operations Director, Aviva, said, “We are proud to work with Ageas on this new initiative which has the potential to revolutionise the way insurers handle third party claims. The Portal we have developed with Ageas removes the need for the hundreds of thousands of calls and letters sent between insurers to recover money. The banks have a clearing system for exactly this reason. We think this is an obvious use of technology.

“We want to work with all insurers to establish this solution as standard for the motor insurance market. We believe the portal can play a key role in improving insurer efficiency, enabling portal users to settle third party non-fault claims much quicker and it shows how insurers can build trust in the market.”

Rob Smale, Claims Director at Ageas, said, “We believe this is a key milestone for the entire insurance industry. We are always looking for new ways to make the claims process more efficient and reduce unnecessary costs, which results in a quicker and smoother process for the customer. The Portal we have developed with Aviva is a perfect example how we, as insurers, can and should use technology to improve the customer journey further and build trust in the industry.

“We are proud to be a part of this project and we will continue to innovate and develop new ways to revolutionise the motor insurance industry for the benefit of our customers.”

The problem faced by motor insurers is that the ‘at fault’ insurer has no control over the costs incurred during the claim, but is responsible for paying those costs, including replacement vehicle and repair charges. The result is that non-fault claims attract extra costs that line the pockets of third parties, without providing any tangible value to the customer.