Cross-border cooperation in motor insurance claims

Cross-border cooperation in motor insurance claims

InterEurope AG European Law Service

Head Office Hansaallee 24940549 DüsseldorfGermany

Tel. +49 211 586 584 18Fax. +49 211 586 584 34e-mail: [email protected]

IIF 2014, Istanbul, April 6-7th.The road towards profitability

Cees WerffInterEurope AG European Law Service www.intereuropeag.com

Fraud

AGENDA

Cross-border cooperation in motor claims management

Data protection & privacy regulation in EU

Introduction to cross-border motor claims

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Introduction

* Implementation of the system of the International Certificate of Motor

Insurance (‘Green Card System’) on 01.01.1953

* Council of Bureaux (CoB) is the organisation coordinating the different

National Insurance Bureaux (NIB) participating in the Green Card system.

* The NIB represents around 2000 motor insurers in 47 countries in

Europe, North Africa and the Middle East.

• CoB operates under the United Nations

• Number of cross-border traffic accidents reported in 2012: 355.759

• General trend: declining. Reasons: economical crisis, road-safety measures, road-traffic information, safety measures car manufacturers, in car technology (mainly technology innovations)

• Movers and shakers in cross-border traffic accidents

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Relationship between TPL insurer and foreign Correspondent and his Correspondent/Representative must be considered as a legally regulated Outsourcing situation with the respective rules of Compliance and Governance.

The Correspondent / Representative is a full range defender of the interests of the mandating foreign MTPL Insurer not just a loss adjuster.

Requirements to integrate targets, structures and procedures between the mandating MTPL insurer and the foreign service provider.

International Complexity require service providers‘ total focus on international claims: international claims must be core business free of conflicts of interest.

Principles in international claims

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Without direct compensation systems

Direct settlement on basis of conventions

Mandatory direct compensation systems on basis of law


Claims handling schemes: traditional system vs. direct settlement of claims

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Introduction

Accidents which occurred in the country involving land vehiclesregistered abroad: Top 5 countries (2012):

1. Germany (54.623)2. France (53.914)3. Italy (41.188)4. Austria (29.055)5. UK (24.875)

Top 5 countries CEE1. Poland (12.919)2. Romania (10.173)3. Hungary (7.280)4. Czech Republic (5.566)5. HR (5.344)


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Introduction

Countries of registration of the vehicle involved in the accident: Top 5 countries (2012):

1. Germany: F, CH, NL, A, PL, Ro2. France: B, CH, E, UK, I, P3. Italy: CH, G, F, Ro4. Austria: D, H, I, CH5. UK: D, F

Top 5 countries CEE1. Poland: CZ, G, F, UK, I, NL2. Romania: G, F, UK, I, H3. Hungary: A, G, UK, I4. Czech Republic: A, G, UK, I, PL, SK5. HR (5.344); BIH, I, GTurkey: G, UK, F, I, Ro


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Migration in EuropeSource: Berlin Institut für Bevölkerung und Entwicklung, Die demografische Zukunft von Europa (2008)

108.548

16.866

74.198E

P

RO

BG

PL

I

CH

B

NL

D

SEST

LTGB

IRL

10.523

48.038

6.777

5.859 51.151

11.424

38.367

18.015

EU 25

4.865

20.785

2.312

5.989

2.074

1.695

47.000

Fraud

AGENDA





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Data protection & privacy regulation in the EU

EDPS: European Data Protection Supervisor Started on 01.01.2004 Main tasks: Control, Advise & Cooperation Each member state have an DPO (Data Protection Officer) Advise after control: health status, employment, security research, etc. Complaint procedure for EU citizens: breach of confidentiality, access

to information, right of correction, erasure of information, unnecessary saving of confidentiality information

Recently special advise on: TFTP-SWIFT, e-privacy guideline for electronic communication and public access to documents

Also advise on Court of Justice: ‘Bavarian Lager case’: connection between transparency and data protection

Cooperation with Eurodac: sharing responsibility regarding control between local data-protection authorities



AGENDA



Fraud


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FRAUD

Common fraud techniques

Underwriting side (total-loss)

Claims sideSpecialist fraudsters (groups)

Mobile numbers, witnesses, addresses, etc.Vendors (garage’s)Digital pictures (photo shopping)

Majority are coincidence fraud cases



AGENDA

Fraud




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Who is entiteled to handle cross-border MTPL claims?

MIB can give delegated authority to external service providers Insurers are member of the MIB and are allowed to handle claims MIB can handle claims themselves as well, or can delegate this In general insurers can appoint correspondent/representative

themselves, but some exceptions apply

What are selection criteria in choosing a cooperation partner?• Quality (people: claims handling vs. claims processing)• Main countries• Finance management• Data protection & privacy regulation• Internal audit structure• Vendor management


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What are selection criteria in choosing a cooperation partner?• Quality (people: claims handling vs. claims processing)• Communication• Main countries• Finance management• Solvency II requirements • Data protection & privacy regulation• Internal audit structure• Vendor management• Client relationship structure• Innovation (e.g. Telematics, electronic accident report via smart app)


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Vendor management?• Many parties could be involved in the claims process:

• Claims service provider, technical experts, accident investigators, medical experts, external lawyers (criminal), body repairs shops, special experts, etc.

• SLA• Auditing• Costs• Payment structure• Quality• Communication


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Euro Kasko Claims support• Asssistance network (Atrium)• Road-side assistance• Towing network• Body-repair shop network• Surveyor network• Mobile app

Advantage:Early stage pro-active claims handling to reduce time and costs!




Point of view of the insurance company:

Keep indemnity/ compensation reasonable Avoid sanctions Accurate reserves Governance & Compliance

• Data Protection• Fraud prevention• Controlling, reporting, auditing

Client retention (marketing function of claims management: service and assistance towards insured)

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No legal and/or contractual obligation of the policy holder to report an accidentLower control over claims costs but also processing costs (survey reports, medical experts, legal costs)Poor or inefficient communication with correspondentsUnclear / unstructured processes of claims handlingCompetitive advantage of the car manufacturers (i.e. technology & data)

Challenges for insurers

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Bentley Continental GTC 6.0 l badly damaged, estimated repair costs GBP 55,000Credit car hire vehicle obtained on the day of the accident(Bentley Continental Flying Spur 6.0 l) – daily rate: GBP 762.50 + VATClaims notification: 3 weeks post accidentConfirmation of insurance cover: 7 weeks post accidentsRepairs completed: 8 weeksTotal credit car hire 159 days / GBP 121.237,50

Example for higher costs due to delays

For example: Credit Car Hire in the UK

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“If detailed information about an accident could be obtained earlier, this would dramatically effect the efficiency of the claims handling process and thus reduce costs“

Hypothesis

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Telematics

How can modern technology help?

Online claims formsIT-interfaces

Automatic data transfersCommunication platforms

Apps

The use of modern technologies results in changing traditional processes, reducing claims costs but also administrative and other costs

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Ideal process

Insurer

Call center 24/7

Telematics box

TPA

Data transfer

Information (e.g. false alarm

Instruction

File opening

Key processesData transfer

Contact

InterEurope

Claim rejection or claim settlement

Expert instruction

Receipt of expertises

TP

Signal

File opening & confirmation of insurance cover

Confirmation of insurance cover

Request for confirmation of insurance cover & 1st reserve

Investigation & legal assesment

Querries

Further information, legal evaluation, reserve update

Claim rejection or claims settlement

Information

Invoicing & file closing

Payments

Invoices & supporting documents

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Claims handling process becomes shorter due to faster communication

Swift decision making Decrease of claims costs and processing costs Better control in terms of insurer being informed of an accident Avoiding time gaps between accident occurrence and notification

of a claim Swift access to legal expertise (InterEurope) – more adequate

handling Risk identification and reduction (taylor-made premiums)

Effects / possible cost reductions

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Data protectionFuture technical developments (e.g. e-call, driverless cars, google

glass)Cost pressureLegal developmentsAutomatizationStandardization vs. Industrialization

Challenges & summery

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Thank you for your attention!

For further questions,

please do not hesitate to contact me

Cees WerffInterEurope AG European Law Service

[email protected]

Head Office

Hansaallee 249

40549 Düsseldorf

Germany


Documents

Cross-border cooperation in motor insurance claims