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 road towards profitability
Cees Werff
InterEurope AG European Law
Service
www.intereuropeag.com
AGENDA
Introduction to cross-border motor claims
Data protection & privacy regulation in EU
Fraud
Cross-border cooperation in motor claims management
www.intereuropeag.com
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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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Principles in international claims
 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.
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Claims handling schemes: traditional system vs.
direct settlement of claims
Without direct compensation systems
Direct settlement on basis of conventions
Mandatory direct compensation systems
on basis of law
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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)
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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
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Migration in Europe
EU 25
Source: Berlin Institut für Bevölkerung und
Entwicklung, Die demografische Zukunft von
Europa (2008)
2.074
47.000
S
5.989
EST
1.695
IRL
LT
48.038
GB
6.777
NL
5.859
4.865
B
D
38.367
51.151
PL
20.785
CH
RO
I
11.424
18.015
E
10.523
74.198
2.312
P
BG
16.866
108.548
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AGENDA
Data protection & privacy regulation in EU
Introduction to cross-border motor claims
Fraud
Cross-border cooperation in motor claims management
www.intereuropeag.com
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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
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AGENDA
Fraud
Introduction to cross-border motor claims
Data protection & privacy regulation in EU
Cross-border cooperation in motor claims management
www.intereuropeag.com
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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-border cooperation in motor claims management
Introduction to cross-border motor claims
Data protection & privacy regulation in EU
Fraud
www.intereuropeag.com
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Cross-border cooperation in motor claims management
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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Cross-border cooperation in motor claims management
What are selection criteria in choosing a cooperation partner?
•
Quality (people: claims handling vs. claims processing)
•
Communication
•
Main countries
•
Finance management
•
Solvency II requirements
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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-border cooperation in motor claims management
Vendor management?
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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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Cross-border cooperation in motor claims management
Euro Kasko Claims support
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Asssistance network (Atrium)
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Road-side assistance
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Towing network
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Body-repair shop network
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Surveyor network
•
Mobile app
Advantage:
Early stage pro-active claims handling to reduce time and costs!
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Cross-border cooperation in motor claims management
Point of view of the insurance company:
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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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Challenges for insurers
 No legal and/or contractual obligation
of the policy holder to report an accident
 Lower control over claims costs but also processing costs
(survey reports, medical experts, legal costs)
 Poor or inefficient communication with correspondents
 Unclear / unstructured processes of claims handling
 Competitive advantage of the car manufacturers
(i.e. technology & data)
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Example for higher costs due to delays
For example:
Credit Car Hire in the UK
 Bentley Continental GTC 6.0 l badly damaged,
estimated repair costs GBP 55,000
 Credit car hire vehicle obtained on the day of the accident
(Bentley Continental Flying Spur 6.0 l) – daily rate: GBP 762.50 + VAT
 Claims notification: 3 weeks post accident
 Confirmation of insurance cover: 7 weeks post accidents
 Repairs completed: 8 weeks
 Total credit car hire 159 days / GBP 121.237,50
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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“
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How can modern technology help?
The use of modern technologies results in changing traditional processes,
reducing claims costs but also administrative and other costs
 Telematics
 Online claims forms
 IT-interfaces
 Automatic data transfers
 Communication platforms
 Apps
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Ideal process
Data transfer
Contact
Telematics
box
Key processes
Call center
24/7
Information
(e.g. false alarm
File opening & confirmation of insurance cover
Instruction
Request for confirmation of insurance cover & 1st reserve
Confirmation of insurance cover
Investigation & legal assesment
Data transfer
Further information, legal evaluation, reserve update
InterEurope
Expert instruction
TPA
Receipt of expertises
Querries
Insurer
Claim rejection or claims settlement
Information
Invoicing & file closing
Invoices & supporting documents
TP
Claim rejection or claim settlement
Payments
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Effects / possible cost reductions
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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)
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Challenges & summery
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Data protection
Future technical developments (e.g. e-call, driverless cars, google glass)
Cost pressure
Legal developments
Automatization
Standardization vs. Industrialization
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For further questions,
please do not hesitate to contact me
Thank you for
your attention!
Cees Werff
InterEurope AG European Law Service
Cees.werff@intereuropeag.net
Head Office
Hansaallee 249
40549 Düsseldorf
Germany
www.intereuropeag.com
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