Claims Review 2022 – A Leader’s Perspective – Graham Gibson, Allianz UK
I’ve approached several Executives from different areas of the claims market, to share their thoughts and opinions on a number of topical issues impacting the sector throughout 2022 and looking at the key challenges and opportunities for 2023 and beyond.
Today’s review is with Graham Gibson – Chief Claims Officer, Allianz UK
It feels like we have reached a period of stabilisation when it comes to remote working. Would you say your organisations views on hybrid/remote working have changed post Covid?
The Covid-19 pandemic has acted as a catalyst for a great deal of change across all industries, however the introduction of hybrid working must be one of the biggest. Prior to Covid most of our workforce was office based on a full-time basis and although we had a “workspace” project in place this was not seen as a priority. However, in March 2020 following the Government guidance to work from home where possible, we had no choice but to change our operating model. This really accelerated our plans and made us think outside the box on how best to approach this. Our teams have done a superb job and we were up and running within a matter of days.
Now that the situation has settled down, the vast majority of our people have mentioned on multiple occasions that hybrid working is one of the best things that has come out of Covid and there is very little interested in going back to working in the office five days a week. Hybrid working offers more flexibility to our teams and it allows us to operate in the most efficient way. There are some occasions where we are asking our people to attend the offices. Onboarding for instance.
With ongoing supply chain shortages and the rising prices of goods, what measures are being taken to protect service and response times?
We have taken a “control the controllables” approach to the global supply chain issues. We have taken a number of actions to address these challenges and we have focused in particular on minimising the impacts and working closely with our suppliers while keeping our customers informed. To address some of these issues, we continue to support our customers and we have done so by moving to a mixed model of Regional and National repair providers to build a strong delivery proposition.
In no particular order we have, increased rates including an energy allowance, focused on repair v replacement ratios, prioritised vulnerable customers, changed total loss ratios, increased the usage of green parts, and so on.
What more can be done to validate the ESG credentials of insurance supply chains?
More and more insurers are beginning to request from their suppliers to showcase a public commitment towards net-zero and align with their ESG strategy and vision. Despite the progress made over the last few years however, there are still a lot to do. One of these revolves around checking external accreditations such as Dow Jones Sustainability Index (DJSI) and MSCI which provide a view of the supplier’s ESG activity and credibility in their ESG related supply chain management. Introducing rigorous supplier screenings to build a sustainability profile, regular monitoring and targets can also ensure that suppliers are constantly working towards their ESG commitments.
At Allianz, we introduced our own Allianz Group Vendor Code of Conduct which recently has been enhanced with an ESG focus and provides further clarity to vendors on our ethical work principles, corporate values and sustainability expectations respective to environmental and human rights topics. We also launched the Allianz Net Zero Accelerator with the aim of assisting brokers to measure and reduce their carbon footprint. All of this represents 10% of our supplier selection which we believe is an industry first. We have plans to increase this percentage in due course.
What is the greatest impact the cost of living crisis has had on your organization, and how have you responded?
Unsurprisingly, the cost of living crisis has had an impact both on our wider business and our employee base, of course from different perspectives. The impact on the business has been reflected in the inflation we are facing into which sits at unprecedented levels. Our Procurement team have been at the forefront of this and have done amazing work on keeping our spend competitive.
In terms of our people, there has been a noticeable strain on a number of employees who are finding the cost of living a real challenge. This obviously creates stress and we are proud of the wellbeing support we offer our colleagues – some examples are company funded Headspace, Employee support helpline, partnerships with external support such as Mind and Able Futures, we set up a financial wellbeing hub (one stop shop for information on a range of financial issues), and organized regular webinars covering a variety of issues. We also looked at our benefits package more generally and we decided to provide a further 5% pay increase for a large majority of colleagues effective November 2022 to help with managing some of these constraints.
What event or reforms have had the greatest impact on claims during 2022?
This past year has been unprecedented in terms of the levels of disruption and challenges faced and that is why there has not been only one event in isolation which has had the greatest impact on claims, but a combination of factors. We’ve faced a perfect storm of unprecedented market-wide challenges including supply chain disruptions, rising repair costs, labour shortages, longer lead times and the highest ever recorded inflation levels. To add to this, we also treaded the uncertain world of Covid-19 Business Interruption claims, with some clarity still awaited from the Courts.
What key recruitment challenges have you faced this year, and how have you addressed these issues?
Like the rest of the market, we faced a shortfall in talent joining our business. With the workforce and its opportunities no longer limited by geography and more organisations, like Allianz, offering hybrid working meant that people have access to more opportunities. This led to one of the biggest challenges being the fight for talent – it has been a candidates market this year and talent has been in short supply.
In terms of how we address this, as well as BAU recruitment and continuing to build networks and we have explored other avenues such as introducing virtual work experience to attract early talent (with circa 100 attendees this year), apprenticeship schemes (with some already launched and some due to launch in 2023), working with the STEM returners programme and heavily investing in internal talent. We are also reviewing our employee value proposition, and whilst this is ongoing simple tweaks to things like adverts (removing jargon for example) have made a significant impact on attraction.
What more can the industry do to attract talent into the claims sector?
There have been a lot of discussions on this topic over the last 6 months alone with numerous articles written on how to improve talent attraction and retention. What it all comes down to however, is clearly signposting the career paths available and the development opportunities provided while also tapping into all talent pools. This means clearly setting out the employee value proposition, the benefits offered and engaging with early years talent for them to start seeing that the claims sector and insurance generally can offer a rewarding career.
What is the greatest challenge facing the claims market moving into 2023 and beyond?
I think the current inflationary and supply chain issues will continue to pose the greatest challenge in 2023. With costs increases across the board, rising interest rates and customers searching for ways to reduce their expenditure, the claims market will most likely continue to experience repair delays, higher than normal average costs per claim, an increase in underinsurance and potentially even a rise in fraudulent behaviour. All in all, 2023 will continue to be a challenge, however opportunities will still exist, in particular around improving systems and capabilities, and investing in talent and technology solutions.
Right International are market leading recruiters to the Loss Adjusting, Claims and wider Insurance market
If you are looking to add to your team now or in the near future or are considering your next career move, please contact myself or one of the team
All the best,
Gary Pike
Founder & MD Right International
