Brokers encouraged to put pressure on insurers to prioritise recoveries

One area that is often overlooked by brokers when selecting which insurers to engage with is the speed, efficiency and success rates of the insurer when it comes to the recoveries process.

According to Julie Steyn, Legal Dept Manager at CIB Insurance Solutions (CIB), recoveries can take various forms. For motor vehicles, an insurer can claim the cost of repair back from another insurer if their client was at fault, sell the salvage of a wrecked vehicle as scrap or even chase a third party uninsured driver for payments on the cost of repair.

She says that a successful recovery can benefit the broker, by keeping his client’s loss ratio to a minimum which ultimately positively affects the broker’s block of business which is held by that insurer.

A successful recovery is also beneficial to the insured party. “For example, when a client incurs damages to their vehicle as a result of an accident caused by a third party, they are required to fork out the excess specified in their policy for repairs. This can often amount to several thousand rands, which many clients often never recoup. However, a successful recoveries claim from the guilty party or their insurer would result in the excess being refunded to the client. Not only does this put cash back in the client’s pocket, but it also goes a long way in solidifying the trust and faith that he has in his broker.”

Julie Steyn says CIB starts initiating a recovery about a week after a claim is first registered. “We take recoveries extremely seriously and our highest priority is on the speed of the process. Our average turnaround time is about 6 weeks from start to finish, provided the third party is insured, and in some instances we manage to recover the excess prior to the vehicle repairs being complete.

Not to be forgotten is the Liabilities team which again effectively minimizes the effect of a claim where the client is at fault. “Our third party team’s average saving per claim currently stands at around 37%, which has a very positive impact on our brokers and their clients,” says Julie Steyn. “Unfortunately, there are a number of insurers in South Africa that simply do not prioritize recoveries and we encourage brokers to put more pressure on them to do so.”