InterResolve

The big claims issues for fleets in 2012

Amal Ahmed — Fri, 17 Feb 2012 16:54:17 +0000

Against the backdrop of the ongoing referral fee debate and the wider industry enquiry into the rising cost of motor insurance, 2012 is primed to be a turbulent year for the busy fleet manager. With issues surrounding accident claims, risk prevention, insurance ratings, referral fees and strategies for reducing loss ratios, many will be looking at claims exposures with increased intensity.

Throughout all of this however, the objectives remain the same; reducing the number of claims and associated costs against your fleet. I predict there will be an increasing number of opportunities to achieve these objectives as the number of solutions to these problems emerging in the market continue to grow throughout the year.

Pro-activity in claims costs reduction for fleets
The cost of third party injury and hire claims continues to be a focal concern for fleets and we are increasingly being consulted on the methods available to reduce the impact this has on fleet loss ratios.

An emerging trend in response to rising costs, and one that is increasingly gathering momentum, is pro-active intervention into fault claims reported to fleet managers. The general principle is that by reaching the non-fault claimant first and managing the claim quickly will benefit both parties and will reduce legal and credit hire costs. Unfortunately there have been many reported instances of some accident management companies using this practice to generate referral fees for themselves rather than reduce costs, which is a short-sighted measure of no help to the fleet and resulting only in profitable revenue streams for the accident management companies concerned.

Information gathered through active intervention, however, can be used to actively manage and settle the claim against the fleet cost effectively, resulting in substantial and sustainable benefits to fleets, not least in terms of reducing fleet claims costs and loss ratios. Pro-activeness in this area can provide valuable control over claims that otherwise would be difficult to attain. This system is already being executed effectively in some quarters, with the availability of non-credit hire solutions and mediation for injury claims leading to claims costs being reduced in both those areas by over 50 per cent: a prize well worth achieving, especially in difficult economic times.

Even despite this, early notification remains the key to reducing costs and traditionally this has been an issue in fault claims reporting into fleets. The slower the reporting however, the less chance there is of reaching and assisting the non-fault party. If telematics technology can be put to use to provide early notification of incidents that are likely to lead to claims, this could provide a very viable auxiliary solution.

How will a referral fee ban affect fleets?
There is little doubt that some form of ban will now be imposed; the only questions are when and to what extent. Companies that provide services into fleets, and which are also reliant on revenues from referral fees will face difficulties. How will this affect fleets that have relied on their services?

To add to this, the ban on referral fees for injury claims is likely to go hand-in-hand with a reduction in lawyers’ recoverable costs.

Recent reports and parliamentary debates point to a realisation of the connection between these and all signs point to a referral fee ban and a cap on lawyers’ fees happening simultaneously. At first glance, this looks like good news for fleets that could enjoy automatic cost saving in fault injury claims. However, it is not yet clear to what extent lawyers will succeed in their fight for a minimal reduction to be imposed – they are a powerful lobby in the corridors of the legislature.

The flip side will be a reduction in claims revenues for those companies that currently benefit from referral fees. However there are already moves underway to replace these revenue streams through profit-sharing arrangements with the new form of shared-ownership law firms emerging

Reassuringly change is afoot – and where there is change there is opportunity. There are many wise heads in this market and 2012 is likely to see an increasingly creative crop of fresh ideas to fill the gaps in this changing environment. The hope is that this innovation will be used for the right reasons and not for easy profiteering from the plight of victims of accidents. Fleet managers also need to be alert to the opportunities for pro-active control of claims costs that these developments offer.

Peter Ashdown-Barr, Founder Director InterResolve

http://www.fleetnews.co.uk/blog/entry/the-big-claims-issues-for-fleets-in-2012/42585/?page=1

InterResolve points to Mediation as answer to legal cost cutting

Amal Ahmed — Wed, 15 Feb 2012 12:15:12 +0000

Mediation is the key component in the battle to bring down legal costs in personal injury claims.

That is the view of Inter Resolve’s founding director Peter Ashdown-Barr, who has been among the first from the injury claims mediating community to offer a response to the Prime Minister’s six point plan outlined in yesterday’s motor premium summit.

Commenting on David Cameron’s pledge to reduce legal costs by working alongside insurers to reduce red tape and pass savings on to consumers, Ashdown-Barr claims the answer to slashing costs is through mediation.

He said: “One of the main focuses of Cameron’s Insurance Summit was reducing legal costs in personal injury claims. It is the drivers who ultimately end up bearing the brunt of these costs through their premiums. The Summit overlooked the fact that this is already a solution to this issue – one which is already stipulated by the courts under the civil procedure roles and yet often overlooked – that of mediation.

“In family disputes the courts encourage and even enforce mediation as a primary method of resolution. The Government needs to do the same with small undisputed motor claims, and understand that by encouraging the industry to use mediation as an alternative solution will be a positive step forward.”

What is more, the Inter Resolve boss states that the practice of mediation is already favoured by the vast majority of non-fault drivers involved in small undisputed motor claims.

He added: “We have found that, in the matter of small undisputed motor claims, 95% of non-fault drivers will choose this method over seeking the legal solution – when they are given the choice to do so. The industry has to accept that lawyers are not always automatically required in processing undisputed motor claims – and processing claims this way is ultimately harming consumer premiums and the industry as a whole. ”

Peter Ashdown-Barr, Founder Director InterResolve

InterResolve launches new website

Amal Ahmed — Tue, 10 Jan 2012 14:15:26 +0000

We are pleased to announce that we have today launched our new website, designed to be easier to use and to provide better access to the information you need. If you have any feedback on the website, or for press enquiries, please contact Amal.ahmed@inter-resolve.com.

Losing the lawyer from injury claims

Amal Ahmed — Fri, 28 Oct 2011 11:31:10 +0000

As featured in the Insurance Times (28/10/2011): In the heat of the debate over referral fees and other reforms to the RTA injury claims process, it is surprising why this question is not being asked. There is much talk and general agreement that the claims process is dysfunctional, not least because the process for hundreds of thousands of small injury claims is over-engineered.

The problem stems from the fact that injury claims are almost always automatically referred to lawyers at the outset, regardless of the degree of simplicity or complexity involved, or even whether the claim will actually be disputed or not. The majority of injury claims are small, soft tissue injuries and the liability matrix is very straightforward for most RTA circumstances. Despite this, all these small claims are referred to law firms at the outset, without giving claimants any choice of alternatives. The claim is then forced to proceed down a one-size-fits-all legal process.

Ask the right questions

Why not first of all find out if the claim is even going to be disputed? If not, then where is the legal issue? Lawyers are here to defend or enforce people’s rights. So unless a claim is being disputed, or there is a complex issue requiring legal advice, why are lawyers automatically retained? If a claim is not disputed, claimants need medical advice, an independent valuation of their claim and an offer from the fault insurer – all of this can be done without a lawyer. InterResolve has given claimants this choice in thousands of claims, but only around 3% have chosen legal representation.

“The market is crying out for alternatives that work better and are much more cost-effective”

Third-party assistance programmes from fault insurers come close to providing a solution and a choice for claimants as to whether they want to settle direct or seek legal representation. It would be arrogant to argue that claimants should not have this choice. However, while these programmes give claimants a choice, they lack the important element of independence. Claimants need impartial independent advice on what they are entitled to prior to settling their claim. There are an increasing number of valuation tools available that can provide this, especially for small claims, but it needs to be provided by a third party rather than the insurer.

Giving the customer a choice

The market is crying out for alternatives that work better and are much more cost-effective. Alternatives are available at a much lower cost than legal fees, but these alternatives remain largely unused. Maybe if referral fees are banned, insurers, brokers and others might look more closely at their customers’ journey, where they need to pursue a claim for damages. Maybe they will view it as inappropriate – even a disservice – to automatically refer their customers into the hands of lawyers and a legal process that is alien for most ordinary people without giving them any choice first. Maybe they will decide it is right to give their customers a choice after all, especially in small claims that are likely to be admitted.

Nobody would deny claimants’ access to justice if there is a dispute or medically complex prognosis where lawyers may be needed. But for the hundreds of thousands of small claims where legitimate claimants just want their claims resolved without a complex process, alternatives already exist. These can establish liability before lawyers are retained, arrange independent medical care and independent claims valuation and use informed mediation to settle claims – all without needing an unwieldy legal process and excessive costs.

Why shouldn’t claimants have a choice?

Peter Ashdown-Barr is chief executive of InterResolve

Peter Ashdown Barr: Don’t get it wrong on referral fees!

Amal Ahmed — Wed, 10 Aug 2011 11:28:21 +0000

Reducing referral fees makes sense if coupled with a corresponding reduction in legal fees. Otherwise solicitors, not consumers, will benefit.

“The government is right to be movIng towards banning or capping referral fees. However there is a real danger that this could badly backfire unless it is approached with the whole picture in mind.

Reducing referral fees alone , without at the same time reducing the scale of fees that solicitors charge to insurers, will neither reduce claims costs nor insurance premiums. In fact, because insurers would end up paying out the same level of claims costs at the same time as getting reduced revenues from referral fees, it’s a double whammy that would probably push premiums up even higher than they are today!

Not only could this increase motor insurance premiums but it would give solicitors a huge windfall profit by reducing their biggest overhead (i.e. paying a referral fee) while still allowing them to charge the same fees. While it may be stating the obvious, it is still worth looking at the simple mathematics to make the point crystal clear. If a solicitor currently has to pay out a fee of say £700 to buy a claim and charges a basic scale fee of £1,200 to the 3rd party insurer this results in a gross margin of £500 out of which the solicitor has to pay their processing and overhead costs and make a profit. If you remove the referral fee of £700 without any reduction in the scale fee that the solicitor is allowed to charge, this increases the solicitor’s gross margin from £500 to £1,200.

So the effect of removing referral fees in isolation to reducing solicitors’ fees would simply be to create:

Even higher motor insurance premiums, and
A golden windfall for solicitors

This cannot be the desired effect.

Admittedly there are a large number of factors that also have to be taken into account, like the effect of investment into new law firms following the delayed (any coincidence?) deregulation of the legal services market, but the above factors remain at the core.

The desired outcome must be to reduce excessive farming of injury claims by cutting out the profiteering by those who have the most to gain from the current excessive level of referral fees. If this result is to be achieved, the government must not get it wrong by ignoring what is actually pushing up the costs, namely the level of legal costs that the insurer has to pay when their policyholder has caused the accident.

The right answer must be to make sure that any ban or reduction in the level of referral fees is matched by an equivalent reduction in the level of solicitors’ fees payable by the fault insurer. In fact the exercise could be achieved quite simply by reducing the allowable solicitors scale costs such that the referral fee is naturally reduced by market forces.

Whichever way it is approached, a reduction in solicitors’ costs will take the biggest element of claims expense out of the market, remove companies that farm claims to cash in on the current excessive levels of referral fees and give insurers the tools to compete for new business through lower insurance premiums.

This is the government’s opportunity to get it right. Please don’t get it wrong.”

Peter Ashdown-Barr
CEO InterResolve

Referral Fees – The alternative is already here

Amal Ahmed — Thu, 30 Jun 2011 14:33:30 +0000

Dealing with referral fees is just part of the approach to tackling personal injury challenges says InterResolve.

London 30th June 2011 – Peter Ashdown Barr, Chief Executive of InterResolve, said:

“The comments from Jack Straw and others about referral fees highlight why change is needed to an outmoded and outdated process.

But the abolition or capping of referral fees needs to happen alongside a corresponding reduction in solicitors’ fixed fees. Otherwise there will just be a windfall for solicitors and no reduction in actual claims costs.

Action on referral fees could remove some of the worst excesses of claims farming, fraud and profiteering from claims. However, the use of alternative claims settlement processes provides a platform to address all of the concerns currently being expressed about injury claims.

The solution is already here and working through the use of pre-solicitor mediation without referral fees. It is available for take-up without the need for lengthy debate, legislation or deference to an outdated notion that all claims must be automatically referred to lawyers, regardless of the circumstances or the claimant’s preference.

This is a proven alternative that avoids the referral fees issue and should now be adopted on a much wider basis.”

Gorman joins InterResolve to expand model

Amal Ahmed — Fri, 08 Apr 2011 11:21:40 +0000

As featured in Post Online (16/03/2011): Inter Resolve has appointed a former Equity claims operations manager to the newly created role of head of claims as part of plans to expand its business model.

Garry Gorman will be responsible for the development and delivery of Inter Resolve’s claims operations across its volume personal injury claims services.

This includes Motor Resolve, the firm’s accident management and claims programme partnership with Enterprise Rent-A-Car.

Chief executive Peter Ashdown-Barr commented: “Garry’s range of strategic and operational expertise is important to our plan to extend the scale and reach of our business model.

“His appointment also reflects our commitment to providing the market with a robust and credible alternative solution for the settlement of injury claims.”

As well as Equity, Mr Gorman has held senior claims roles with KGM Underwriting Agencies, QBE, Link and Rubicon Corporation.

Inter Resolve is an injury claims specialist that acquires, processes and settles claims directly between claimants and third-party insurers.

It aims to secure earlier care and compensation for legitimate claimants, while reducing transaction costs for insurers.

According to its own data, based on 1122 referrals in July 2010, the company’s average time from contacting the customer to agreeing a settlement is 58 days. Mr Ashdown-Barr added that in 90% of cases rejected by both Inter Resolve and its insurer partner, the claimant subsequently brought a case to the insurer through a solicitor.

Simon Drew joins InterResolve as Chief Financial Officer

Amal Ahmed — Tue, 01 Feb 2011 14:09:19 +0000

InterResolve, the specialist claims mediator has appointed Simon Drew to be its new Chief Financial Officer.

Simon has over 6 years experience in the Insurance industry working with the large US based global corporate Insurance broker, Aon as head of Management Accounts and US Reporting (2005 to 2007), and smaller private equity backed insurance intermediaries as Finance Director (2007 to 2011).
Prior to the insurance sector, Simon spent 13 years in the logistics arena with P&O, being based in Holland (2000 to 2005) and in the UK with a
Danish shipping company, DFDS (1993 to 2000).

Post Online: Direct settlement, the future of claims

Amal Ahmed — Wed, 28 Jul 2010 11:24:23 +0000

The various debates surrounding the future of referral fees and the resulting impact on the costs of insurance — ‘TSC re-opens premiums inquiry as referral fee furore escalates’ and ‘Referral fees a ‘red-herring’, claims CSC’ – overshadow the fact that some insurers, brokers and claimants are already tackling the challenges of an outdated process head on and achieving results the rest of the industry should take notice of.

”There is an increasing use of direct settlement — reaching claimants pre-solicitor and mediating directly with insurers, feeding in proportionate levels of independent legal and medical advice. This helps claimants settle many claims using an ethical process, reduces costs for insurers and, in many claims, is being done without referral fees being involved, particularly in advanced third-party assistance schemes.

The insurance sector has focused on the need to control costs of high volume, lower value injury claims for years. The subsequent struggle for a solution has, in part, become bogged down because of the continuation of an outmoded process that automatically refers claims to lawyers, regardless of the circumstances or the claimant’s preference.

With the ABI saying that reducing the cost of whiplash claims is a crucial step, it is hard to see how the current process will achieve this laudable objective. It is time for a reality check.

Direct settlement works and is addressing all of the concerns currently being expressed about injury claims — including costs, speed of settlement and ‘treating customers fairly’. The role of mediation is recognised by the Ministry of Justice and meets the overriding objective in the Civil Procedure Rules to attempt alternative dispute resolution prior to using legal proceedings. The results for the claimant, broker and insurer are compelling and measurable — with savings currently running at up to 60% in legal costs.

Even in the heat of the referral fee battle the industry needs to look at the viability and longevity of a process that does not provide cost effective, fast and fair settlement of claims. If alternatives exist, are working and help to achieve much-needed change without the need for lengthy debate, legislation or reliance on a broken process, then the whole injury claim sector must wake up and embrace these more widely, instead of spending time arguing over an approach that claimants do not trust and creates a disproportionate cost burden on the whole industry.”

Peter Ashdown Barr
Chief executive officer, Inter Resolve

InterResolve secures funding from Balderton Capital to drive alternative personal injury scheme growth

Amal Ahmed — Thu, 15 Apr 2010 11:02:57 +0000

InterResolve secures funding from Balderton Capital to drive alternative personal injury scheme growth

London, 15 April 2010 – InterResolve, the independent injury claims specialist, has today announced that it has secured a major funding deal with Balderton Capital, one of Europe’s largest venture capital firms. The company will use the funding to expand its alternative service involving the acquisition, processing and settling of personal injury claims directly between claimants and insurance companies.

This equity investment from Balderton will allow InterResolve to significantly grow the scale and scope of its injury claims activities and enable InterResolve to build a substantial war chest of around £30m for claims acquisition.

Using InterResolve, injury claimants no longer need to go straight to lawyers, incurring the usual costs and delays that involves. Where claims are straightforward and likely to be admitted, InterResolve can take claimants straight to the 3^rd party insurer, thereby cutting costs and delays in getting early care and compensation for them. The company acquires claims of legitimate motor accident claimants before they are sold off to lawyers and arranges free independent legal and medical advice and private medical care. InterResolve has unique arrangements that mean it can make direct contact with the insurer of the party at fault and the process can cut the legal costs for insurers dramatically. Tim Bunting, Partner at Balderton Capital, will also join the board of InterResolve.

Peter Ashdown-Barr, Chief Executive of InterResolve, said: “Costs and delays, particularly in small injury claims, continue to challenge insurers and claimants despite the forthcoming MoJ rule changes. As InterResolve is not a law firm, we can work with both sides outside the usual legal process and deliver significantly greater savings for insurers while ensuring claimants get independent advice.

“This investment will mean these benefits can now be offered on a much wider basis to the market. The timing of this investment could not be more relevant and we are delighted to welcome Tim Bunting on to the InterResolve board.”

Tim Bunting, Partner at Balderton Capital, said: “InterResolve has demonstrated that it has a viable alternative to the current personal injury claims process. The volume of claims and response from insurers shows a robust solution is required to achieve real change. We believe that InterResolve has the structure and ability to deliver that across the market and we have every confidence in Peter’s ability to build the business further.”InterResolve and Enterprise Rent-A-Car last year announced an exclusive agreement to jointly sell and market their respective Injury and Direct Hire schemes. Where used together, these schemes provide a comprehensive alternative to the conventional legal and credit hire processes and compound the benefits to reduce costs even further.

Mike Nigro, Managing Director of Enterprise Rent-A-Car said: “Business partners like InterResolve are critical to the success of our Direct Hire programme. Through close collaboration and a mutual understanding of one another’s businesses, we’re able to really cut the cost of claims management and resolution, whilst delivering a highly customer focussed experience. The new funding arrangement highlights the value placed on identifying alternatives to some existing claims processes, and we look forward to continuing this relationship.”

Cavendish Corporate Finance advised the InterResolve team on the equity investment by Balderton.

Simon Ramery, partner at Cavendish Corporate Finance, said: “We are very pleased to have assisted such an exciting business as InterResolve in securing the necessary funding to accelerate its growth. This deal demonstrates that significant capital is available from investors such as Balderton when a business has a compelling value creation story.”

ENDS

For further information contact:

For InterResolve
Concise Public Relations
Ian Barrett
Tel: 020 7100 3960 or 07949 422257
ian@concisepr.com

For Balderton Capital
Powerscourt
Kay Larsen
Tel: 020 7250 1446 or 07912 516246
kay.larsen@powerscourtmedia.com

NOTES FOR EDITORS:

About InterResolve

InterResolve was set up in 2004 as a claims mediation company. It has become the UK’s only independent injury claims specialist acquiring, processing and settling claims directly between claimants and third party insurers. InterResolve works with legitimate claimants to help them get earlier care and compensation, while substantially reducing claims transaction costs for insurers.

Claimants get access to completely independent legal advice and independent evaluation of compensation as well as early resolution of all claims issues. They also get early access to free private medical care and treatment.

Insurers can use the company’s high-volume online injury claims platform for inter-party claims processing together with agreed timetables and scales of legal and other costs that provide much greater efficiencies and cost savings than the conventional legal process.

Because InterResolve is providing an assistance programme to claimants-in-person, even though independent legal advice is available, the service is outside the existing pre-action protocol and the proposed new MoJ process. This means InterResolve is free to contract privately with both claimants and insurers and agree independent processes and cost structures. In this way InterResolve can meet the dual requirements of ensuring claimants always have access to independent advice and that insurers benefit from significant cost savings. Where claims are disputed or more complex, claimants are represented by a panel of specialist law firms under the scheme.

InterResolve has already proven its model through a number of successful pilot and full schemes involving thousands of claims over the last few years. It has also developed its own highly advanced online inter-party technology platform and has a scalable structure of FNOL, call centre and business processing operations.

InterResolve is regulated by the Ministry of Justice in respect of regulated claims management activities (registration number CRM: 1457, recorded on www.claimsregulation.gov.uk). InterResolve is an executive board member of the Claims Standards Council, and is accredited by the UK Civil Mediation Council.

For more information, visit: www.inter-resolve.com.

About Balderton Capital

Balderton Capital is one of the largest venture capital firms in Europe, committed to finding and helping talented entrepreneurs build great companies. Based in London, it manages $1.9 billion in committed venture capital.

Since 2000, Balderton has invested in over 80 companies, principally in numerous European countries but also in the US and Asia. Balderton’s investments span a wide variety of sectors including communications, consumer services, enterprise software and services, e-commerce, mobile, semiconductors, media and financial services.

Balderton invests in innovative businesses and approaches investment using the principles of teamwork and an intense dedication to building companies of lasting value. The investment partners combine international and Silicon Valley operational experience with company-building expertise.

Notable investments include Bebo (sold to AOL for $850m), Betfair (the online betting exchange), ScanSafe (sold to Cisco Systems for $183m), LOVEFiLM (the home entertainment subscription service) and MySQL (sold to Sun for $1 billion).

For more information, visit: www.balderton.com.

About Enterprise Rent-A-Car

In the UK, Enterprise Rent-A-Car is the sole specialist in providing replacement vehicles and courtesy cars, which are relied upon in the event of an accident. Enterprise also offers daily and weekend rental for private or business use.

Founded in 1957, Enterprise is headquartered in St. Louis and has more than 7,000 offices in the UK, Germany, Ireland, the United States and Canada. Enterprise, which started in the UK in 1994, has rapidly expanded and currently has over 340 locations across the UK, with more than 3,000 staff. Three quarters of the UK population are within five miles of an Enterprise location.

For more information, visit www.enterprise.co.uk.

About Cavendish Corporate Finance

Cavendish Corporate Finance is the UK’s leading independent specialist advisers. Clients include private companies, financial institutions and fully listed public companies with typical transactions falling broadly within the £10 million to £200 million ‘mid-market’ value range.

For more information, visit www.cavendish.com