STAKING YOUR CLAIM How insurance start-ups can compete on claims excellence

As a relatively new insurer, Mosaic frequently gets asked the same question by brokers across product lines. “How much have you paid in claims?” they query, referring to our company’s youth as a specialty carrier. It got me thinking about track record and the value of claims reputation. How big a part should your payout history play when vying for business?

Mosaic paid, or agreed to pay, $30 million in our transactional liability division alone in Q4 last year, so, at just three years of age, we already have a growing record to stand behind. That’s important because solid, claims-paying data is a hefty selling point for an insurer and instils confidence in brokers and clients. For start-up carriers that haven’t been in business long enough to experience many claims, however, it can present a challenge: if a broker is placing business even partly on the basis of claims history, how can a young company compete?

The answer is that claims payouts shouldn’t be the single barometer of excellence used to evaluate newer carriers. Neither are they the full picture of a claims team’s reputation. As a 2021 start-up, we’ve rolled out seven specialty lines at Mosaic—so, it’s still relatively early days in terms of receiving claims in some parts of the business. Similar to how we’re competing against more established firms in product innovation and capital structure, we also measure up impressively in both approach and expertise of our claims-management team.

So, what should brokers and clients be looking for when evaluating an insurer’s claims function? And how should insurers aim to prove their value and differentiate themselves? Here are six key points to keep in mind:

1. Don’t regard claims as a back-office function of an insurance company—rather, the guiding principle of client-centric best practice should be this: the claim is the product.
2. An integrated underwriting and claims approach demonstrates this philosophy in practice. Leveraging the claims team’s experience of policy outcomes and the appeal of claims-handling excellence as a selling point means involving claims professionals from the outset of every business transaction. Bringing claims expertise to meetings, whether for renewals or potential new business, can only help underwriters do their job. As coverage across product lines expands, understanding what potential exposures may look like from a claims perspective helps underwriters craft language to capture the intent of both the broker and Insured, avoiding ambiguity when a claim arises. There’s great value for the client, as well; specialty insurance is still a relationship-driven business, and it’s better for everyone if the claims team and insured can start building that connection well before the point of claim.
3. A claims process that appears unnecessarily labored, bureaucratic, and plagued by delays will leave policyholders feeling the insurer is trying to renege on its promise to pay, whether or not that is actually the case. Clarity of communication from the outset is critical to ensure the process runs smoothly.
4. Complex specialty risks prone to complicated claims may be a good test of a claims team’s abilities, as these types of risks may require large amounts of sensitive information to be shared in a short time and have potential for disputes and delays. Examples include transactional liability and cyber. Setting forth expectations early on in the claims process, in terms of requested information and why, can go a long way in putting broker and insured at ease.
5. Talent is telling: while a young company may lack a claims history, its claims executives, managers and adjusters often have decades of industry experience between them. Claims talent is an area in which young companies can compete well. Given a blank slate to develop an effective claims system from scratch, such talent can have a more meaningful impact than it could within the established claims department of a more seasoned carrier.
6. Relatively small, yet appropriately staffed firms may also trump large legacy carriers and MGAs where claims may have to pass through several layers of authority and require multiple approvals before settlement. For instance, Mosaic can assure clients that when they submit a claim, they will deal directly with the person who has authority to make decisions to move it forward.

Ultimately, young companies have several advantages over mature rivals in achieving the responsiveness, efficiency, and clarity necessary to make claims-management quality a selling point. I see this every day at Mosaic, where we put claims front and center of our service, unencumbered by legacy processes.

The bottom line is that claims are at the crux of the relationship between insurance buyer and insurer. In the eyes of the insured, the payment of a claim is the product of the insurance transaction, the validation of the policy itself. Claims directly impact client satisfaction and business retention. And the manner in which claims are handled is also fundamentally important. If insureds have confidence the claims process will be fair, efficient, and transparent, they feel greater assurance they are getting the coverage they paid for.

After all, the one question on the mind of every client is: will we get paid if something happens?