It’s important that claimants receive the correct payout after an insured incident so we’re pleased to see the FCA investigating this and providing some guidelines on how providers can provide true fair value.
As a result of the FCA investigation motor insurers have changed their settlement and compensation practices and some have been found to have short-changed customers on claims payouts for stolen or written off vehicle claims.
Ultimately, the FCA has decreed that around 270,000 motorists should receive £200m in compensation for historic claims that were underpaid, breaching rules on handling claims fairly. Of this, £129 million has been paid to date to almost 150,000 customers.
The work of the FCA has uncovered that in some cases, automatic deductions to payouts were made for assumed pre-existing damage. This particularly disadvantaged careful drivers who had looked after their vehicles and made it hard for them to buy like-for-like replacements. Insurers have now overhauled their claims processes in line with the regulator’s Consumer Duty.
The good news is there is lots of technology out there to help insurers ensure they provide accurate pricing at quote stage and accurate settlement calculation at the claims stage.
Percayso Vehicle Intelligence can support insurers to work out the correct level of compensation at claim stage. The product checks whole market data in real time to highlight an accurate valuation.
We’d also encourage insurers to think about how they use data products such as Percayso Inform’s Vehicle Intelligence at the point of quote or claim. The data can support more accurate underwriting and pricing as well as supporting providers when a claim is received.
Advert-focused analytics is also useful in this scenario. Our systems gather real time data and can see when a vehicle was last advertised, purchase date mileage, and how it was advertised. This can help insurer determine if vehicles have undeclared adaptations such as body kits which would affect underwriting, pricing and claim payouts.
Our message to insurers is to respond to the FCA by leveraging the correct, most effective technologies in order to support underwriting, pricing and claims calculation. Getting it right at these crucial stages creates a platform for happy customers, profitable insurers and, critically, a satisfied regulator.
