General insurers, claims services providers and industry bodies have collaborated with ANZIIF to develop a voluntary framework aiming to build a consistent, high level of professionalism for claims handling and settling services.
Supported by APRA, ASIC, NIBA, AICLA and UAC, the General Insurance Professional Standards Framework for Claims Handling and Settling Services sets a commitment to progressively implement best-practice professional standards including training and development where necessary.
“Together we have created an agreed competency-based framework that outlines a clear pathway which will improve the professionalism of the insurance claims handling workforce when it comes to claims handling and settling services.”
“The foundation endorsing companies demonstrate the critical mass of our industry in terms of GWP, and that the framework can apply to different segments of our industry, including insurers, brokers and MGAs, underwriting agencies, delegated claims authorities and Third-Party Administrators (TPAs),” says ANZIIF CEO Prue Willsford.
Appetite for boosting professionalism
Launched at the 2023 ANZIIF Australian Insurance Industry Awards, the Claims Handling Framework comes on the back of collaborative work undertaken with the life insurance sector over the last five years, which culminated in the Life Insurance Professional Standards Framework in 2021.
Willsford says the success of the life insurance initiative is a clear indication of the appetite for boosting professional standards.
“Achieving trust through clear professional standards has also increasingly been on the agenda for claims professionals, especially since the implementation of changes to the Australian Financial Services licensing structure, which meant claims handling became a service regulated by ASIC.
“One of the requirements of this new regulation is for a company to attest that its people are competent to handle claims at the level that has been delegated to them,” Willsford explains.
“While there is lots of good training around the country, the new Claims Handling Framework sets a consistent set of competencies to which a company can map its people’s skills.”
Consistency is key
Willsford says as part of the development of this framework ANZIIF engaged with hundreds of people across the industry.
The benefits of the claims handling framework received strong endorsement — including having an independent benchmark of what “good” looks like, avoiding regulatory uncertainty for licensing purposes, and providing “a real opportunity to improve the professionalism of claims handling”.
According to Youi Executive General Manager – Claims, Jason Storey, a framework signatory, consistency is key.
“Once this industry-delivered framework is universally adopted and accepted, it will provide consistently high standards of service, process quality and compliance in claims handling activities for the ultimate benefit of insurance consumers,” Storey says.
“Consistency in claims delivery across the industry improves levels of trust within our communities and also with our regulators.”
In addition, Storey says a formal, assessable framework can eventually be promoted as a tertiary qualification to open direct avenues into the insurance industry.
First steps to take
The first step for a company wishing to adopt the framework is to classify its claims roles into a small number of different groupings.
“It's not complicated,” Willsford asserts. “The process is meant to be quite simple, and we had strong feedback from industry that it was flexible enough and aligned well with levels they have in their organisation.”
Once organisations have identified the requirements associated with the levels of claims staff in their business, it’s up to them to identify any gaps and make decisions about how to fill them based on their individual circumstances.
“There are many paths to the outcomes we're seeking based on the possible requirements outlined in the framework, Willsford says.
“ANZIIF will continue to support the industry through intellectual leadership around what professionalism looks like.
"I would love to see the logos of every insurance industry organisation involved in claims up on our website endorsing the framework and I have no doubt more organisations will sign up to it once its usefulness becomes apparent.”
Flexible and simple for every organisation
Storey confirms that the beauty of the framework is its flexibility. “Every company differs in terms of its internal Learning and Development (L&D) capability,” he says.
“Companies could choose to outsource directly to ANZIIF for delivery of the framework or design and implement their own resources in line with the framework.
"As an extension of this, there are significant benefits and efficiencies to be gained by extending appropriate aspects of the framework to claims service providers.”
Given regulators hold insurers to high standards of adherence to governing codes and legislation, Storey adds that a significant regulatory requirement is assessing and ensuring a company’s people are effectively trained to deliver competent and compliant claims handling.
“The Claims Handling Framework provides clarity and consistency for organisations of any size and capability to achieve this, further as the framework is supported by ASIC, I am confident it will be the gold standard of compliance assessment by our regulators in time.”
Self-management and integrity
David Gow, Head of Claims, CHU Underwriting Agencies says once the minimum [claims management] standards are established, there will be a high degree of self-management to ensure signatory organisations continue to achieve them.
“In the first instance, this is similar to what many organisations already undertake with continuing professional development programs (CPD) they participate in. The process needs to be reviewed annually to ensure it is still relevant and being adhered to. I am looking forward to seeing this detail.”
Gow points out that implementing the framework as the result of broad consensus on its relevance and value will give regulators every reason to maintain high levels of faith in the claims sector.
“We need these bodies to trust that the insurance claims sector acts in the best interests of policy holders and communities at all times," he says.
"Increased collaboration between insurers and claims service providers, along with support from the Insurance Council of Australia (ICA) has led to a greater respect and trust for insurers post an event than ever before.
“I feel this is the case with governments and even most sections of the media. If that kind of collaboration is replicated with the claims handling framework it can only be a success.”
Storey agrees. “What I am most proud of is how strongly this concept was supported and brought to life by the industry as a whole, guided and facilitated by ANZIIF,” he says.
“This was demonstrated through incredible input and sharing by industry representatives, focused on a common goal despite the competitive nature of our respective businesses.”