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Cross-border cooperation in motor insurance claims. InterEurope AG European Law Service Head Office Hansaallee 249 40549 Düsseldorf Germany Tel. +49 211 586 584 18 Fax. +49 211 586 584 34 e-mail: headoffice@intereuropeag.com. IIF 2014, Istanbul, April 6-7th.

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slide1

Cross-border cooperation in motor insurance claims

InterEurope AG

European Law Service

Head Office

Hansaallee 249

40549 Düsseldorf

Germany

Tel. +49 211 586 584 18

Fax. +49 211 586 584 34

e-mail: headoffice@intereuropeag.com

IIF 2014, Istanbul, April 6-7th.

The roadtowardsprofitability

Cees Werff

InterEurope AG European Law Service

www.intereuropeag.com

slide2
www.intereuropeag.com

AGENDA

Introductiontocross-bordermotorclaims

Data protection & privacy regulation in EU

Fraud

Cross-bordercooperation in motorclaimsmanagement

slide3
www.intereuropeag.com

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
slide4
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.

www.intereuropeag.com

Principles in international claims

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

Withoutdirectcompensationsystems

Directsettlement on basisofconventions

Mandatorydirectcompensationsystems

on basisoflaw

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Introduction

Accidents which occurred in the country involving land vehicles

registered 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 CEE
    • 1. Poland (12.919)
    • 2. Romania (10.173)
    • 3. Hungary (7.280)
    • 4. Czech Republic (5.566)
    • 5. HR (5.344)
slide7
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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, Ro
    • 2. France: B, CH, E, UK, I, P
    • 3. Italy: CH, G, F, Ro
    • 4. Austria: D, H, I, CH
    • 5. UK: D, F
  • Top 5 countries CEE
    • 1. Poland: CZ, G, F, UK, I, NL
    • 2. Romania: G, F, UK, I, H
    • 3. Hungary: A, G, UK, I
    • 4. Czech Republic: A, G, UK, I, PL, SK
    • 5. HR (5.344); BIH, I, G
    • Turkey: G, UK, F, I, Ro
migration in europe
Migration in Europe

EU 25

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

2.074

47.000

EST

5.989

S

1.695

IRL

LT

48.038

GB

6.777

NL

4.865

B

5.859

51.151

D

PL

38.367

20.785

CH

RO

10.523

I

11.424

18.015

E

74.198

BG

2.312

P

16.866

108.548

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AGENDA

Data protection & privacy regulation in EU

Introduction to cross-border motor claims

Fraud

Cross-bordercooperation in motorclaimsmanagement

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Data protection & privacyregulation 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
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www.intereuropeag.com

AGENDA

Fraud

Introduction to cross-border motor claims

Data protection & privacy regulation in EU

Cross-bordercooperation in motorclaimsmanagement

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FRAUD

  • Common fraud techniques
    • Underwriting side (total-loss)
    • Claims side
    • Specialist fraudsters (groups)
      • Mobile numbers, witnesses, addresses, etc.
      • Vendors (garage’s)
      • Digital pictures (photo shopping)
    • Majority are coincidence fraud cases
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AGENDA

Cross-bordercooperation in motorclaimsmanagement

Introduction to cross-border motor claims

Data protection & privacy regulation in EU

Fraud

slide14
www.intereuropeag.com

Cross-bordercooperation in motorclaimsmanagement

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
slide15
www.intereuropeag.com

Cross-bordercooperation in motorclaimsmanagement

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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Cross-bordercooperation in motorclaimsmanagement

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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www.intereuropeag.com

Cross-bordercooperation in motorclaimsmanagement

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!

cross border cooperation in motor claims management
www.intereuropeag.comCross-bordercooperation in motorclaimsmanagement

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)
challenges for insurers
Challenges for insurers
  • No legal and/orcontractualobligation

of thepolicy holder to report an accident

  • Lowercontroloverclaimscosts but also processingcosts

(surveyreports, medicalexperts, legal costs)

  • Poororinefficientcommunicationwithcorrespondents
  • Unclear/ unstructuredprocesses of claimshandling
  • Competitiveadvantage of thecarmanufacturers

(i.e. technology & data)

example for higher costs due to delays
Example for higher costs due to delays
  • Forexample:
  • Credit Car Hire in the UK
  • Bentley Continental GTC 6.0 l badlydamaged,

estimatedrepaircosts GBP 55,000

  • Credit carhirevehicleobtained on theday of theaccident

(Bentley Continental Flying Spur 6.0 l) – daily rate: GBP 762.50 + VAT

  • Claims notification: 3 weeks post accident
  • Confirmation of insurancecover: 7 weeks post accidents
  • Repairscompleted: 8 weeks
  • Total creditcarhire 159 days / GBP 121.237,50
hypothesis
Hypothesis

“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“

how can modern technology help
How can modern technology help?

The use of modern technologiesresults in changing traditional processes, reducingclaimscosts but also administrative and othercosts

  • Telematics
  • Online claimsforms
  • IT-interfaces
  • Automatic datatransfers
  • Communicationplatforms
  • Apps
slide23

Ideal process

Signal

Call center 24/7

Key processes

Data transfer

Contact

Telematics box

Information

(e.g. falsealarm

File opening & confirmation of insurancecover

Instruction

Requestforconfirmation of insurancecover & 1st reserve

Confirmation of insurancecover

Investigation & legal assesment

Data transfer

Furtherinformation, legal evaluation, reserve update

Insurer

File opening

Querries

InterEurope

TPA

Expert instruction

Claim rejectionorclaimssettlement

Information

Receipt of expertises

Invoicing & fileclosing

TP

Invoices & supportingdocuments

Payments

Claim rejection or claim settlement

effects possible cost reductions
Effects / possible cost reductions
  • 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)
challenges summery
Challenges & summery
  • Data protection
  • Future technicaldevelopments (e.g. e-call, driverlesscars, googleglass)
  • Costpressure
  • Legal developments
  • Automatization
  • Standardization vs. Industrialization
thank you for your attention
Thank you for your attention!

For further questions,

please do not hesitate to contact me

Cees Werff

InterEurope AG European Law Service

Cees.werff@intereuropeag.net

Head Office

Hansaallee 249

40549 Düsseldorf

Germany

www.intereuropeag.com