Audit Trail to London

The ISO27001 (Information Security Standard) is managed by a small team, comprising of IT Management (Bob Moreton, Ben Clarkson) and six internal auditors drawn from various departments within the company. The Auditors have been instrumental in ARAG annually retaining this important certification for the last three years.

In recognition of the team doing it “for the love” (as they all have very busy day jobs) they were recently rewarded with a trip to London. First stop on this whistle-stop tour was a visit to the Lloyd’s building in the City of London, kindly arranged by our Underwriting partner Brit, where our team were educated on the history of the market’s roots in maritime insurance and shown around the famous boxes. Our team thought it was interesting to note that the visitor seats that the brokers sit on were shorter and more uncomfortable than the box seats, perhaps demonstrating a position of power and of time constraint!

This was followed by another tour, this time at Brit’s nearby offices in the fabulous Leadenhall Building, although some of the team weren’t so keen on being whizzed up in the glass sided, super-fast lift to the 40th Floor and feeling like it was only just clinging to the outside edge of the building.

Of course, there is no such thing as a free lunch so the team then carried out an audit of the ARAG London office (which opened in 2016) and falls within the scope of the ISO certification. The audit includes ensuring the physical security of the office by querying the visitor process with receptionists, and monitoring the server room which was suitably air conditioned, so the team were unsurprisingly quick in completing this audit - brrr!

To follow on from the earlier maritime theme, the team were rewarded with drinks at The Oyster Shed and dinner in Borough Market, followed by a sleepy train journey back to Bristol.

Many thanks to the whole team for a fantastic day and their hard work throughout the year!

The team includes:

• Ben Parkinson, Broker Account Handler
• David Caines, BTE Underwriter
• Fran Box, Learning & Development Coordinator
• Johanna Graham, CMU Team Leader
• Jordan Wall, Compliance Advisor
• Nigel Sobers, ATE Senior Claims Handler

Video Killed The Radio Star

We are always looking for new and helpful ways to communicate with our customers and a popular addition is a customer-focused animated video explaining what happens if someone has a claim.

Further animated videos are already in production so keep your eyes peeled for these in the new year.

More recent video uploads:

• Update on the clinical negligence market 

• Introducing a new ATE Account Manager 

• How ARAG’s legal advice helpline work

Carefully crafted as brief and incisive, yet informative, they are easy to locate: the latest are displayed on the ARAG website and all can be seen on our YouTube channel.

Better consumer information on the way

Whatever the final outcome of the Insurance Distribution Directive (IDD), end-users will be better informed on the insurance products they are buying.

Consultation may yet modify the FCA’s suggestions but the broad concepts will remain and apply from pre-purchase to after the end of the contract:

• know your customer
• know your target market
• facilitate product comparisons and avoid competitive distortions
• provide Insurance Product Information Document (IPID)
• protect customer’s money
• no conflicts of interest

Achieving all these objectives requires a holistic approach within the organisation and then again when the product is retailed, bundled or distributed. Point of sale is of course the most crucial aspect but IDD will impact on product design, sales, HR, data security and many other areas.

The consumer must first be presented with a clear choice that meets their needs and, second, be provided with something that lives up to their expectations.

The new IPID must be in a durable medium, such as on paper, and contain objective details of the product and exclusions. It must be available for renewals and bundled packages where more than one IPID may be needed. Though brief in content, it must give sufficient helpful information to inform the customer’s choice prior to them concluding the contract. It will be up to the retailer to decide the point at which the information is most appropriate to aid that choice. 

Get it wrong and it will of course count against you in ombudsman decisions.

From 0-100

Recent publication of our annual results reveals much about the past and hints towards the future. To amplify his financial summary, MD Tony Buss was interviewed in a video on the ARAG YouTube channel to explain how a decade of growth has firmly underpinned the company’s ambition for the next 10 years.

Successive years of pre-tax profit showed another rise to £2.4 million in 2016, with particularly strong growth in BTE and underlying growth in ATE. Headline figures are also impressive: combined income (including reinsurance business generated back into ARAG SE in Germany) increased by 19 % from £26.5 million to £31.5 million, generating a £4.2 million profit. BTE was up nearly 20% overall with commercial and assistance business accounting for much of this increase.

It took the full ten years to go from 0-100 in terms of staff but selecting the right calibre of personnel, then investing in their training and development has been a core strength in the company’s controlled expansion.

Throughout 2016, there was the familiar combination of regulatory and legal changes to contend with. FCA initiatives and the add-on investigations were ever-present while the heritage of LASPO will continue to colour the picture for some years to come.

Despite the challenges, and partly because of them, there are exciting opportunities ahead for new products, and ARAG is running at full speed, ready to provide more creative, innovative and flexible solutions.

More action on housing disrepair

Events in the news have focussed attention on the sometimes indifferent attitudes towards keeping rented properties in healthy and proper condition. We are working with a number of solicitors who are taking action on behalf of tenants against their landlords, specifically housing associations or local authorities themselves, in instances where properties fall short of the required standard.

The object is to remedy faults, and secure compensation where appropriate, for people who would previously only have had a small voice against big organisations.
ARAG has been helping grow this sector and it fi ts neatly with our aim to continually diversify in the aft er the event market.

Housing disrepair claims typically follow a pattern and because of this we are able to offer a fixed premium, deferred until the end of the case, with standard cover of typically £10,000 for all disbursements and adverse costs.

It is excellent news both for residents of dilapidated, unrepaired or damp dwellings and for those solicitors who have become specialised in this area. As firms become unsettled by negative developments that affect the flow of business in the ATE market, such claims will surely enjoy further interest.

ARAG’s Housing Disrepair cover can be used for either fast or multi-track claims.

Employment dispute? Be prepared for a wait

Roughly 50% of employment disputes are settled between the parties by ACAS early conciliation. However, where settlement cannot be reached, disputes can be escalated to a tribunal hearing.

We are hearing that most area Employment Tribunals are now booking over a year ahead.  

For example, Nottingham is now booking Hearings for Dec 2018 and Croydon is late January 2019.

The National Tribunal User Group met back in June, prior to the UNISON judgment, which resulted in the abolition of employment tribunal (ET) fees.  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/654111/Employment_Tribunal__NUG_minutes_19th_June_2017.pdf

At that time 67% of cases were disposed of within 6 months of receipt against a target of 75% in England and Wales. The meeting notes refer to judges and non-legal members of tribunal panels retiring and not being replaced and the closure, relocation and merger of court centres.

This stress-inducing situation is most unwelcome and is expected to deteriorate significantly due to an anticipated surge of claims following the abolition of ET fees.

Our policyholders should be assured that the lawyers we appoint will make every endeavour to resolve claims within a reasonable time frame but where cases cannot be settled, their patience could be tested, in view of the delays that we are hearing about.   

The devil in the detail

It is 9 years since Lord Justice Jackson first got the call from the Master of the Rolls to begin his Review of Civil Litigation Costs which made recommendations largely brought into law by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).

While debates about the post-LASPO regime persist, few would question Jackson’s tenacity. This summer, his latest “supplemental” review, caps months of speculation on the prospect of fixed recoverable costs being extended to cover a much wider range of cases. The implications for the legal profession and for public access to the justice system will still be significant, but his latest recommendations represent a significant step back from earlier proposals.

In January 2016, Jackson urged ministers to fix costs for claims up to £250,000 but his latest review proposes only to fix costs for all claims up to £25,000. As always, the devil will be in the detail, but it is encouraging that Lord Jackson has acknowledged the complexity of clinical negligence cases, so that people who have been harmed by the public health system are not subsequently let down by the justice system.

His review recommends that a bespoke process is established for clinical negligence cases that fall beneath the £25,000 threshold and proposes that a joint Department of Health and Civil Justice Council working group be set up to gather views from both claimant and defendant solicitors. The outcome will be vital to the fairness of any fixed costs regime and to avoid tipping the scales in favour of defendants (most often NHS Resolution) who have already proved willing to play the system to avoid meeting the liabilities presented to them in court. Lord Jackson hasn’t entirely abandoned his aspiration to see fixed costs in much higher value cases, however.

His latest report also sets out plans for a pilot that would provide an optional, streamlined procedure for business and property cases up to £250,000, with fixed costs up to £80,000. Again, how this is implemented will determine both how fair and how successful any further expansion of the fixed costs regime may be, not least in the resources courts will have to deliver swift er and more cost-effective justice.

Fixed recoverable costs are, without doubt, here to stay and likely to be extended. They can offer benefits to all parties in streamlining and speeding up access to justice, but they could also reduce it, so any expansion must be carefully monitored.

Our journey to ICS Service Mark accreditation

ARAG has always differentiated itself from its competitors on quality of service, not just since we launched here in the UK a decade ago, but in Düsseldorf more than 70 years before that. However, there comes a time when all the internal measures and industry awards are not enough and we need to set a more ambitious goal; not just to be the best in our industry, but to be among the best in any industry. That’s why we have just embarked on our path towards Service Mark accreditation with the Institute of Customer Service (ICS).

There are any number of badges and accreditations a company can print on its letterhead or display in reception to suggest service excellence, but for ARAG this is more about the journey than the destination. In fact, we have chosen the ICS because it offers much more than a box-ticking exercise and will really challenge our existing systems and approach.

During this journey we will re-examine our strategic and operational approach to the customer experience. All aspects from measurement, recruitment, learning and development, digital systems and our business processes will come under scrutiny. We will also consider how we can better engage our staff and customers to work more effectively together towards common goal of access to justice.

The work will start in our before-the-event claims department with the aim of achieving Service Mark accreditation by the end of 2019. However, we won’t stop there; the programme will then expand to encompass all our business interactions with all customer types, whether a policyholder, broker, solicitor or anyone else. Our ambition is to have our whole operation Service Mark accredited during 2021.

Getting Data Privacy Right

“Data protection… didn’t we just do that?”

Facebook founder Mark Zuckerberg was still in high school, two Stanford PhD students were in the process of founding Google and none of us had even heard of WiFi, let alone cloud computing, when the UK passed it’s most recent Data Protection Act.

So, it’s fair to say the legislation could do with a tune-up. The General Data Protection Regulation (GDPR) will supersede our 1998 Act and similar legislation in every other EU member state, and has been built to unify legislation and strengthen data protection for individuals throughout the EU.

What’s new?
There are new rights for data subjects; new responsibilities for businesses; a new principle: accountability; and much tougher penalties including compensation for data subjects and fines of up to €20 million (more for the very largest companies).

What do brokers need to know?
Far too much to cover here, but BIBA has produced extensive guidance, available online.

What about law firms?
Similarly, solicitors have a lot to be aware of, but the Law Society has created some excellent resources for the profession.

But, but… Brexit?
GDPR will be enforced in the UK regardless of Brexit. It is also expected that its requirements will continue here, whatever the terms of any Brexit deal.

How long have we got?
About 6 months. GDPR compliance must be achieved by May 25, 2018. That may still seem a way off , but we all know how long systems work can take.

Whiplash & discount rate reforms delayed

Earlier this year, we contrasted the media reactions to two significant legal developments as they unfolded.

The first, a long overdue correction to the ‘discount rate’ applied to the settlements in the most serious personal injury cases, had been debated and stalled for years but was met with shock and outrage from insurers and gathered headlines across news, business and finance pages in the national press.

The second, a fundamental change to a common law right to be compensated for injuries caused by another party, was whisked through consultation, past the Justice Select Committee and into a parliamentary bill in a matter of weeks, with barely a murmur.

Since then, a new Lord Chancellor has promised legislation that will allow for his successors to reset the ‘discount rate’ regularly, on the advice of a panel of diverse and independent experts. The parliamentary bill to establish the new mechanism has yet to emerge, and the insurance lobby is growing impatient.

However, David Liddington has revealed that it will maintain the principle of 100% compensation, will use “low risk” as opposed to “very low risk” investments as a benchmark and will review the rate every three years.

Among many measures in the Prison and Courts Bill which ran out of parliamentary time when the snap election was called, the ‘whiplash’ reforms made the headline summary of the Civil Liability Bill included in the Queen’s Speech. Clearly, neither piece of legislation is likely to find its way before parliament until well into 2018, which would make implementation next year unlikely. Such a timetable isn’t going to satisfy insurers though, who are already pressing the Lord Chancellor to adjust the ‘discount rate’ again, before the new process is established.

A better summer for access to justice

It’s often said that a week is a long time in politics, so perhaps it isn’t surprising that the six months since the last edition of the RAG seem like an age.

June’s snap election hadn’t even been called when we were putting together our last issue, and it transformed not just the wider political landscape, but also the immediate future of legislation set to have a major impact on our market and policyholders.

Reforms to tackle the so-called “compensa-tion culture” ran out of parliamentary time, but the political impetus seems to have survived in the Civil Liability Bill.
In spite of the mauling it took at Select Committee, the claim of saving motorists £35 on annual premiums still made the summary of the new bill in the Queen’s Speech. 

Further scrutiny and the government’s diminished position in the House of Commons may force some compromise on the controversial ‘whiplash’ proposals, but the priority demanded by eight pieces of Brexit legislation makes the planned October 2018 implementation seem unlikely.

The courts may have a reputation for moving a little slower than Westminster, but the impact of one decision handed down over the summer is equally important.
In July, the Supreme Court ruled that the fees charged since 2013 to bring a case to an employment tribunal were unlawful. UNISON succeeded in proving that the fees, which ranged from £390 to £1,200, were indirectly discriminatory and restricted access to justice.

As well as sorting out which fees should be refunded (successful applicants may already have recovered them in their settlement) the government will also have to manage increased demand on the tribunal system and ACAS, where the early conciliation process introduced in 2014 is still mandatory.

ARAG’s personal and commercial policyholders have been largely insulated from the fee regime and its reversal, underscoring the great value that legal protection offers, but removing the fees barrier while maintaining the compulsory ACAS process, strikes a balance between the interests of employers and employees.

If all that were not enough, in September, the Ministry of Justice proposed a new mechanism for calculating the ‘discount rate’, in response to the collective outcry thrown by insurers when the rate was revised in February.

Precisely what rate the new mechanism will produce remains to be seen, but a sensible compromise seems likely, so there should be no return to the serious underfunding of long-term care that severely injured people suffered for so long.

While there are still clouds on the horizon, it has been a better summer for access to justice than we might have forecasted and some threats to the stability and great value that our policies off er seem to have abated, for now at least.

Necessity is the mother of invention

Should you need proof that creativity is spurred on by adversity, look no further than the legal expenses sector. ARAG is rolling out new products, taking technology in new directions, and helping grow new business for our partners. All this, despite the challenges on both the political and legal landscapes.

Fee caps, whiplash reforms, increases in small claims levels plus Brexit, place special demands on our resources and business model. Because of this, we have already rebalanced our BTE and ATE portfolios and are able to actively seek new business from a variety of sources in both BTE and ATE sectors.

On the face of it, this is a complicated recipe with which to progress our second decade in the UK. However, nothing has changed in our philosophy of opening the doors to justice for everyone, whatever their financial status. The consistent accolades at awards ceremonies confirm our belief in the highest standards throughout the organisation: our by-words remain innovation, flexibility and service.

Elsewhere in this issue of the RAG we have a lot to say about the Insurance Distribution Directive, BTE developments and the need for employers to reconsider their commercial policies (CLP) now that employment tribunal fees have been scrapped. CLP has proved an enormous growth area, along with assistance services, and we aim to keep all BTE products affordable whilst providing top level cover and service. ARAG will meet the challenges of the market with solutions that benefit all our partners and policyholders.

Upcoming test cases will untangle some of the current impasse over clinical negligence settlements and we will ease some of the current solicitor ‘malaise’ through a new advanced disbursement product, aiding their cash flow.

Housing disrepair continues its strong growth and we are looking to more debt recovery and professional negligence for matrimonial business. Closer ties with solicitors through the pre-paid disbursement product will help introduce ARAG as the ideal partner for employers’ liability and motor business too. We already have our Practice Policy that covers all ATE cases in a firm.

I am pleased to say that we shall continue pursuing clinical negligence claims at the current level. And aft er the hysteria over discount rates earlier this year, insurers and government are getting closer to a more balanced view with a final figure that looks like it will be fairer to claimants.

Now is the winter of our… actually quite contented, thank you very much.

As anyone in the insurance industry knows, claims service can be the hardest thing to get right but great service can often go unappreciated. Winters are inevitably tricky for home emergency claims, which come in waves on the back of bad weather, leaving customers distressed and anxious. So, we’ve been particularly pleased with some of the positive feedback our claims handlers have been getting, as winter arrives.

“Lovely”, “Thrilled” and “Fantastic” are not words often used in the insurance claims process, but all are among the many plaudits offered by ARAG Home Emergency policyholders as we helped them through some of the stressful events that the recent storms brought with them.   

“A lot of our Home Emergency business is in the High Net Worth sector,” comments Head of Sales, Andy Talbot “so, customer expectations are understandably high. But that makes feedback like this all the more gratifying.”

It’s no secret that the key to delivering any service is setting clear expectations and meeting or surpassing them. Customers are generally understanding, even at the worst of times, but they need to feel that someone has a plan and the expertise to put things right, as quickly as possible.

“We don’t try to pretend that we never fall short of our own, very high standards and there are always surprises that old properties and a British winter can throw at you,” continues Andy, “But we’re the first to put our hands up if something doesn’t go according to plan, and the claims teams are brilliant at keeping customers informed and helping them through what are always really stressful times.”

“Quality of service has always been one of the key things that ARAG has differentiated on. So, we really have to deliver on that. As we head into another winter, I’m really pleased that we’re living up to the high standards that partners and policyholders have come to expect of us.”

The RAG - issue 16 - November 2017

It's this time of year again - when our bi-annual news bulletin is out !

You can flick through its pages and zoom in to read all our articles in our interactive flick book below.

 Also, you can download it here : The RAG, Issue 16 - November 2017