Benchmarks Web

Motor Claims Cost

Analyzes the direct and indirect drivers of indemnity and claims spend to identify opportunities to reduce overall costs

Finalta launched The Motor Claims Cost Benchmark to provide actionable insights into the performance of insurers’ current strategic configuration, operational practices, and processes. The benchmark allows you to identify areas of underperformance, set realistic operational targets, and take focused actions to improve your combined ratio.

Why it's important

Finalta studies demonstrate that significant variance exists in the costs for comparable claims, potentially up to 50%. In a highly competitive, price-sensitive environment in which the frequency and severity of claims are increasing, the need to closely manage costs is crucial. The Motor Claims Cost Benchmark helps participants address critical questions such as:

Cost comparison:

  • How does our claims cost compare for insured party, third party, and bodily injury?

Organization design:

  • Do our internal processes and organizational configuration support our claims strategy?

Strategy evaluation:

  • Is our total loss strategy effective?
  • How effective is our claims capture strategy and how does it impact our overall performance?

Management of approved garage network:

  • How effectively are we steering claims to our approved garage network and does it make sense to do so for all claims?

What the Motor Claims Cost Benchmark provides

  • A detailed analysis of insured party, third party, and bodily injury claims for direct and indirect drivers of spend. Insurers benefit from a genuinely comparable view of performance versus peers, as measures are segmented into groups of claims that account for differences in risk mix and claims strategy. This provides a unique view on claims performance, and helps identify specific opportunities for improvement.
  • An action plan to seize the opportunities and initiate improvement programs, based on observed and proven best practices. The analysis is designed to reflect real-world claims operations, and its structure will be easily recognizable within your organization. This encourages buy-in and ensures a high level of engagement to effect positive change.
  • Tracks progress of initiatives against internal targets and against competitors

Methodology

Our unique methodology utilizes claim-, claimant-, and payment-level data to identify differences in performance within comparable segments, including repair costs for your insured young drivers of lower value vehicles, costs of bodily injury claims with legal representation in a particular region, and the impact that time to First Notice of Loss (FNOL) has on your overall performance. We employ granularity to generate comparability, rather than manipulating data, to account for differences in risk mix and strategy. Our experienced analysts understand the trade-offs in claims strategies and help to identify opportunities in the context of each insurer’s individual needs.

Compare material
damages costs

Segment repair costs
by vehicle value and
policyholder ag

Analyze bodily injury
at both claim and
claimant level

Assess results by age,
region, injury, and cost type