For an SME, it might just sound sensible to hire a claimant intermediary service when you’ve got a particularly tricky insurance claim.
But there’s a lot to unpack with using such a service rather than an insurance broker/adviser.
What’s prompted us to write to you about this is a recent article on ABC News Online. In it, the Insurance Council of Australia called for tighter regulation and state consumer protection against claimant intermediary services.
Why?
They’re prone to misleading tactics to gain customers and regularly add their fees to the claim.
This article will explain the differences between claimant intermediaries and insurance brokers/advisers so you can decide which suits.
What are claimant Intermediaries?
Claimant intermediary firms as specialised entities within the insurance sector. They aim to help policyholders navigate the claims process efficiently. From October 2021, claims handling became a financial service under the Australian Securities and Investments Commission’s regulations. That means those who provide those services must hold an Australian Financial Service licence.
Typically, claimant intermediaries are very hands-on in pursuing claims under insurance products. They offer a range of services, from initial claim submission to negotiation and settlement with insurers. Often, they’re engaged to deal with complex or disputed claims, where the claimant needs expert intervention to get a fair outcome.
They may operate on a no-win, no-fee basis, so they take a percentage of your claim’s payout as their fee if the claim is successful.
ASIC exempts these professions from being regarded as claimant intermediaries: mortgage brokers/advisers, qualified accountants, financial advisers, property managers, and estate managers.
What are Insurance Brokers/Advisers?
Meanwhile, to use the legally defined terms an insurance broker/adviser carries on a business or arranging contracts of insurance and representing an insured person or entity. They offer personalised guidance and support throughout the insurance lifecycle.
Our responsibilities cover:
- Finding out about your unique business, its products/services, your current risk management approach, and appetite for risk
- Doing a risk assessment of your business, which draws on our expertise working with others in your sector/industry (we profile your insurable and insurable risks, too)
- Suggesting risk management and mitigation strategies
- Customising options for insurance coverage based on those insights
- Guiding you on the policy fine print so you gain a deep understanding of what it covers
- Securing the policy or package of policies on your behalf as your direct
- Helping you review your policies annually or update them more frequently, as needed
- Manage your claim, if you make one
- Negotiate with the insurer on your behalf such as if you wish to query the outcome and argue for a different result, and
- Always act as your agent, not for the insurer.
Key Differences Between Claimant Intermediaries and Brokers/Advisers
While claimant intermediaries and brokers/advisers may appear to offer the same service – claims management – there are important differences in their roles and functions.
Claimant intermediaries are only involved during the claim process, whereas brokers/advisers do a lot more. Our comprehensive, holistic approach means you’ll have ongoing support and risk management services.
We prioritise client advocacy and representation in our dealings with insurers.
Benefits of Working with Brokers/Advisers
Opting to collaborate with insurance brokers/advisers offers several advantages for SMEs. We personalise our service, tailoring insurance solutions to align with your unique business needs.
Our expertise and working on your behalf help ensure businesses we work with receive fair treatment and optimal claim outcomes. We also have access to a diverse array of insurance products from multiple insurers, so our clients have choice and flexibility.
Through the enduring relationship between brokers/advisers and clients, we’re able to offer continuous support and proactive risk management.
Making the Right Choice for Your SME
Wrapping up, the distinction between claimant intermediary firms and insurance brokers/advisers underscores the importance of selecting the right support for effective claims management and settlement.
As an SME looking to select the right type of advice, assess the complexity of possible claims, evaluate the need for ongoing support, and prioritised client advocacy. Consider the expertise, reliability, and compatibility with your business objectives. That due diligence will help you navigate the risk landscape with more confidence and resilience.
We’re here to help review your insurance needs in a comprehensive way.