One insurer’s successful exit from the GTA
Credit Hire partner, Darren Mendel, and his team supported a well-known specialist motor insurer through the transition from GTA member to non-member in 2009.
When this particular client was considering their position in the GTA there was great impetus on the evolving intervention argument. Copley v Lawn was yet to be determined by the Court of Appeal and many insurers were nervous about leaving the ‘safety’ of the GTA and embarking on untested intervention strategies.
Darren assisted the client in developing their business case for exit and defining the operational procedures and parameters that needed to be in place in order to achieve the more favourable financial outcomes they were seeking. This included drafting the initial intervention strategy and associated procedures; agreeing the litigation strategy and processes; and developing template letters and other documentation.
Training and close ongoing support was provided to the client’s internal team. Indeed, in the early phase of the project Darren’s team effectively became an extension of the client.
As expected from the pre-planning that was done, litigation rates initially increased as credit hire operators (CHOs) responded to what they considered to be an opportunity. By maintaining the agreed strategies and improving their operational execution both litigation and spend was brought under control and began to move in the right direction. It is worth highlighting that this client now enjoys one of the most competitive litigation rates in the market.
We have recently been assisting them in building two dedicated teams equipped to retain the majority of pre-litigation work in-house and reduce their dependence on outsourcing and secondments/implants.
The techniques and processes developed as part of our work with this client have been applied and evolved as a result of Horwich Farrelly’s continuing work with both them and other non-GTA insurers. Key points to note are:
- There is no ‘one size fits all’ intervention strategy. A strategy has to fit an individual claims portfolio and the skills and resources available. It then needs to be constantly reviewed in the light of the changing market environment. We therefore help clients to monitor the effectiveness and consequences of their strategies and to tailor these as necessary.
- The use of robust Copley letters and other ‘protective’ documentation, and the processes around these, need to be rigidly and consistently controlled within the insurers FNOL/intervention team. Again, documentation needs to be regularly reviewed and updated. Our work with a number of non-GTA insurers enables us share ‘best practice’ wherever possible.
- The ‘culture change’ required within internal teams should not be underestimated. The skills and capabilities required for teams involved with non-GTA work is markedly different than for those involved in GTA work. Recruitment, training and supervision need to be designed appropriately and we have assisted several clients in this respect.
- Irrespective of the amount of pre-litigation activity undertaken by an insurer there needs to be a high level of integration and communication between the insurer’s team and ourselves so that a true ‘end-to-end’ approach is adopted. We therefore aim to engage in a true partnership with our clients in which our team and theirs operates as one, delivering support and training to upskill client team members as required.