Loss assessor jailed:: a rare but welcome move

If this were a sign of things to come, I suspect that there would be many within the ‘Claims Management’ industry who would be quaking in their boots! It has given me a novel idea for a new business though. How about I set up an operation that, for a nominal fee, properly reviews settled losses and takes a percentage where amounts above a certain threshold where internal fraud has been perpetrated!

I know exactly the type of claims and organisations I would start with because they aren’t all out of business and many of the ‘professionals’ who have knowingly or unwittingly played their part are easily recognised.

Still, grateful for small victories like these and the ongoing efforts of IFB…onward and upward!

A recent article regarding the failure of Merlin and some dubious industry practices has attracted an incredible amount of interest and comment. It led to an interview that appeared in the insurance press [Post Magazine].

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Towergate:: the price of being "more corporate"!?

It is a rare occasion when I praise Aviva for their strategic decision-making but this is one such occasion! However, I was immediately reminded of the spat of a few years ago that saw Towergate and Zurich “agree to disagree” over respective strategies.

tripWhilst BIBA attempt to appease the most blinkered of their membership by “wasting” money on a Deloitte review and a declaration that they intend to fight an EU move toward hard [commission] disclosure, the reality of a badly broken model is glaringly obvious…

A source claimed that the network decided to disengage after it had become frustrated at Aviva’s lack of understanding of the model and the value it offered the provider: somehow I doubt it is a failure to understand the model and more to do with a lack of faith in the ability of the model &/or Towergate to adapt to survive a turbulent economy and in the future FS landscape.

Unsurprisingly there is no mention of the “value” that is LOST to customers through the network’s “central charge” and unsustainable commission rates! Both of which impact their (Aviva’s) ability to achieve underwriting profit or to offer, reduced, sustainable rating at a time when the customers’ needs far outstrip this, or any other network’s demands: driven by their need to keep on selling in an attempt to outrun the tail of their own making…it didn’t work for the banks and it may not work for them for exactly the same reasons.

A spokesperson for Aviva responded: “Our decision is based on our commitment to build strong, local relationships with our brokers to ensure that they get the best deals with Aviva.

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Economics & Ecology:: the lessons of complex systems

Scientists, sometimes in cooperation with economists, are taking the lead in a young field that applies complexity theory to economic research, rejecting the traditional view of the economy as a fully transparent, rational system striving toward equilibrium. The geophysics professor and earthquake authority Didier Sornette, for example, leads the Financial Crisis Observatory, in Zurich, which uses concepts and mathematical models that draw on complexity theory and statistical physics to understand financial bubbles and economic crises.

Get "fit for randomness" [with Ontonix UK]

The following extract is taken from a thought-provoking article from McKinsey. Power curves are much loved by authors, such as Clay Shirky, Seth Godin, Charles Leadbetter to illustrate the potential for conversation, collaboration and innovation, through adoption of: web 2.0; social media; crowdsourcing; collective intelligence, etc.
They are, therefore, very much “in vogue” and, I suspect, will continue to be so for some time to come…probably not a great surprise that economic theory is enjoying a renaissance in difficult times!
However, from the perspective of “financial regulation” in UK, it is difficult to believe that, if FSA chose to IGNORE the warning signs [generated by financial modelling] about Northern Rock and HBOS, they would be any more effective by monitoring “the system”!!!
“Make the system the unit of analysis. You can’t assess the behaviour and performance of a specific agent—for example, a financial-services company—without gauging the behaviour and performance of the system in which it…

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Still subjective, still correlation but getting closer… :: Accenture identify characteristics of "The Risk Masters"

So, if reports from, the likes of AIRMIC “Roads to Ruin”, World Economic Forum/Zurich, FSA (on RBS), PwC, IBM, UK Government, Zurich and Towers Watson (to name a few recent contributors) have failed to penetrate engrained – but flawed – belief systems, it may be a forlorn hope that Accenture can succeed with this report…but, we live in hope! Hence my resolve to share this kind of useful information as widely as possible.

WEALTH WARNING: all risk management is not made equal and it should not be solely about risk…but reward!

Click to EnlargeBlack Swan resilience

More reports into the subjects of risk management, complexity and compliance can also be found here. Of the recognised Consultancy firms it certainly appears that AT Kearney have the best understanding of the subject of complexity but, unlike Ontonix, NONE, to date, have presented a, measurable, definition or means by which an organisation can begin to explore the issue themselves.

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Insurance: could Zurich initiative provide virtuous spark?

Well done to Zurich for leading the way! Greater collaboration can only be good for the market and, therefore, for customers.

There has been a real lack of innovation (that benefits customers)  in the General Insurance market as competition between insurers, for market share, has seen the extreme pressure upon the integrity of individuals, products, processes and services result in increasing complaints, industry-wide, reputational damage and (inevitably) more regulation – with all the associated costs. A real vicious circle.

Perhaps the lesson from other industries has, finally, been learnt and more collaboration can re-ignite innovation for the benefit of customers and long term good of the industry…

A virtuous cycle. Now that would really create peace of mind and as much certainty as we can realistically expect in such uncertain times!

Huerlimann said the insurer was approached to make the data public and create a standard so the firm set about piloting the database and bringing it to the market.

"What this does is create peace of mind and certainty. The database is fully traceable and auditable so it can be defended in court if it comes to that," he explained.

Responding to a question whether this meant Zurich has lost a competitive edge he said: "We have had five years of competitive advantage and now we need to open it up the market as a standard. We can’t afford to have every insurance firm investing multi-millions pounds in these projects when the market needs it now."

via Ferma 2011: Zurich has opened its compliance database to the broker market – Insurance Insight.

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