Are Claims Handling Services Cost Effective?

People sometimes think they are saving money by relying on their insurers or, if uninsured, waiting until they get a claim and then going to a solicitor.

How much does a claim cost without the services of a claims handler?

Most claims for injuries cost over £1000, even for minor injuries.  The claimant’s solicitors costs are likely to be somewhere in the same region, so if your insurers deal with it without needing to use solicitors to defend it, you will be lucky if it costs less than £2000.

But your insurers will be paying – won’t they?

If you have an excess on your policy, you will have to pay everything up to that agreed amount. However, it does not end there. Your premium next year, and beyond, will very likely be “reviewed” in the light of the cost to your insurers. If you have more than one claim in a few years, the “review” could be serious!

How can an independent claims-handler help?

They might be able to find a way of defeating a claim so it costs you nothing, when your insurers might have been thinking of paying it.  Or they might be able to negotiate a better deal, reducing the cost to you.  Sometimes, when there was no defence, I have saved clients money by encouraging a quicker settlement, so keeping the solicitors’ fees down.

The fees are usually in the hundreds, not thousands of pounds. And the initial consultation is usually free, or always in my case.

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More Ways to be Misled by Statistics: How Reliable are the “Facts” Anyway?

There is an old saying in the world of computer programming:  GIGO, which stands for “Garbage In, Garbage Out”.  This applies in many other areas of life, and certainly to the use of statistics.  If you start with wrong information you will end with wrong conclusions.  Simple! The essential first step in the process of producing statistics is often called “data capture” but it means getting hold of the basic information. But how often do we ask about the way that step was carried out when we look at statistics?

Think about the times you provide that basic information for someone, such as when you fill in a form or answer a questionnaire, whether on paper or online, or even when you are stopped in the street by someone doing market research:

  •          How clear are the questions? (There is an art, or science, in producing questionnaires, but it is not always practiced).
  •          How much time or effort do you put into your answers?
  •          Do you often find yourself mentally tossing a coin to decide whether you were “totally satisfied” or “quite satisfied” with a product, or whether you do something “often” or “sometimes”?
  •          What do you do when asked a question you would rather not answer? Perhaps about your income or health.  You might even want to keep your opinions on certain things private if you are unsure how anonymous or confidential your answers will be, especially when the questions are being asked on behalf of your employer.  Do you ever give in to the temptation to give a safe, bland answer or leave that one blank?
  •          What assumptions do you think the statisticians will make about the blanks? Or the “don’t knows”?

Sometimes researchers do not have to rely on the answers you or I give.  They can get the information they need by counting the number of people using a facility, or the number of cars using a road, or the number of badgers living in a wood.  Can we rely on these sorts of things being measured more accurately?

The front-line research is not always carried out by the scientists or others studying the phenomena in question.  They often use students, volunteers, or casual employees to do a lot of it for them.  This raises some more questions for us:

  •          How committed are these data collectors to the project?
  •          How much training do they get to ensure consistency?
  •          Do they have to use initiative to interpret what they see? E.g. do they include people who came and went without really using the facility?  Is a motorcycle with a sidecar a vehicle? Is that the same badger or another?

I am not saying we should not use statistics – we have to – but I am saying that unless we have satisfactory answers to the sort of questions above, we should take the conclusions with a pinch of salt. Or more than a pinch perhaps.

P.S. I have just heard someone making some very bold claims about the opinions of the majority of people in the UK based on a survey of 1000 people. How typical were they? Out of over 60 million – yes, million – Britons!



Ask a Silly Question!

Another way to mislead with statistics is to weight the question you ask, or to target groups of people who are likely to answer it in a certain way.  Then make the predictable results sound like an amazing discovery.

I could predict the following without holding an opinion poll:

  • The majority of unemployed people think unemployment is too high.
  • The majority of taxpayers think taxes are too high.
  • The majority of victims of crime think sentencing is too lenient.
  • The majority of people convicted of offences think sentencing is too severe.
  • The majority of farmers do not want farm subsidies to be scrapped.

You will rarely see these pairs of questions asked in the same survey, or if so I suspect the answers to only one of each pair would be published:

1. a. Would you like to see immigration reduced?

1. b. Would you like the NHS to stop recruiting foreign doctors and nurses?

2. a. How long do you think terrorists should be detained without trial?

2. b. What is the definition of a terrorist?

3. a. Should there be stiffer penalties for tax evasion?

3. b. Do you ever pay tradesmen cash-in-hand?

4. a. Should more money be spent on X?

4. b. Should less money be spent on Y?

4. c. Should Council Tax be capped?

5. a. Should local authorities have more power to respond to local needs?

5. b. Should something be done about the postcode lottery?

I would also expect this same basic question to get a different answer if it was asked in each of these different ways:

  1. Should businesses be subject to less state interference?
  2. Should more be done to ensure adequate standards of consumer protection/safety/transparency?

Or similarly:

  1. Do we need to do more to protect the countryside?
  2. Should there be fewer planning restrictions?

So what I am saying is that you should always check what questions have actually been asked, and what groups of people were selected.  If that information is not given, be very suspicious! 

What Do Risk Management Consultants Do to Help Manage Risks?

Some people do not understand what I, or other risk management consultants, do, or what benefit their might be to engaging such services.  Here are some of the Risk Management services I offer, in addition to feedback arising from claims-handling. I would expect other risk management professionals to offer a similar range. However, as each client is in a unique situation, the aim is to provide whatever services are needed and relevant, not to offer a standard solution. As Dan Quayle once said: “Solutions are not the answer”. Therefore the services listed here are merely indications and should not be looked upon as a set “menu”.

  • Reviews of Policies and Procedures
  • Policy Statements
  • Risk Registers
  • Risk Analysis
  • Risk Assessments
  • Tenders
  • Loans and Grants
  • Training

The time taken, and therefore the cost, will depend on the nature and size of the business as well as on the services chosen, but the initial consultation is always free (at least in my case) so why not contact me? 

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What is Risk Management?

Many people seem unsure of what I mean when I talk about Risk Management (RM). So what is it?

It is simply the management of risk.  As life is full of risks, we all manage them: sometimes consciously, sometimes not; sometimes well, sometimes badly.  What is needed is a planned, deliberate approach, resulting in written evidence of how each of your risks is managed.

Above all please note these three things that it is NOT:

1)       RM is not another name for Insurance.  The world was full of risks from the start: insurance has been around for only a few hundred years. Not all risks are insurable, but they all need to be managed. It is better to prevent the fire, accident or other loss than to receive an insurance payment after the event.

2)      RM is not another name for Health & Safety.  There are many kinds of risk: property, financial, reputational, environmental, physical, cyber, and business.   Health & Safety deals with only one kind.  An essential element in good risk management is the balancing of one risk with another, e.g. the risk of a car crash versus the risk of being robbed on the Underground.

3)      RM is not a fancy name for Common Sense.  If only sense were so common!  It is true that good managers have often managed risks successfully without using that term, but there is a danger of overlooking something potentially serious but not obvious. You also need to write down your informal assessment of risk for the benefit of others who may not have your “common” sense.

I will be blogging again soon about what risk management consultants do in more detail.

HAPPY ST.PATRICK’S DAY! Here are 4 things you probably did not know about Ireland!

I remember David Steel, a Scot, saying “the trouble with the Irish is that they never forget, and the trouble with the English is that they never remember!”

So for those with poor or selective memories, here are four surprising bits of Anglo-Irish history.

1. The first “English” King to invade Ireland was Henry II in 1171. (Although most English people at the time would probably have considered him a Norman or Frenchman).  He sought and obtained the Pope’s blessing for his expedition, because the Pope considered Henry a good Catholic, and hoped he would sort out the unruly Irish Church which still followed a lot of Celtic Christian traditions, and seems to have tolerated a lot of old pagan practices too. Plus, Henry made a large donation to the Pope’s project to rebuild St.Peter’s Church in Rome, which he made the Irish pay for! However, he also had the support of a lot of Irish people who saw him as a (much-needed) competent ruler.

2. There followed 400 years of “English” rule in Ireland before anyone anywhere used the word “Protestant”, but there were numerous rebellions and conflicts in Ireland without any religious elements. Although religion was a big issue in English politics in the 16th Century, the Tudor monarchs left the Catholic Church in Ireland alone. The gradual spread of Protestantism was mainly in Dublin and not state-sponsored.   It hardly bothered the majority of Irish people.

3. The first Irishman to bring religion into politics was Hugh O’Neill who led a rebellion against the English in the reign of Elizabeth I. Hugh was not very religious, but hoped to use this as a way of uniting various groups of Irish rebels, as there was no real common cause at the time, and of getting financial and/or military help from the Pope, Spain, France, or almost anyone he could contact.

4. William of Orange, or King William III, was not anti-Irish but rather opposed to King Louis XIV of France who seemed to be using Ireland as a back door to England.  A lot of the people killed in the battle of the Boyne were French, plus a lot of Dutchmen in King William’s army. The Pope gave William his blessing before the battle, recognising him as the legitimate King of England and Ireland.

Finally, let us all celebrate St. Patrick’s Day together, remembering that he was probably not Irish, but could have been a Scot, a Welshman, or even a Liverpudlian. As my name is John Murray, I have probably got either Irish or Scottish ancestry, but my grandmother (nee O’Neil) came from Dublin, and I used to live in Wales, so my loyalty is to Britain. All of it.

Think too that in Patrick’s time there was no distinction between Catholic and Protestant, and that we should all be glad of the influence Christianity has had on the culture and society of the whole of the British Isles.  It should be something to unite us. It still could be.  Thank you Patrick!

A Picture Can Tell a Thousand Lies!

Statistics are often presented with pictures or graphs, supposedly because this makes them easier to understand, but this opens up another opportunity for misleading the reader, either deliberately or accidentally.

Suppose you want to show that last year’s sales, or whatever, were 1000 and this year’s are 2000 the simplest and most honest way of illustrating it is to draw a picture of a money-bag or piggy-bank and then two bags or pigs, all the same size.  The deception occurs if you try illustrating the bigger figures with a bigger picture, such as a piggy-bank twice as big as the first. This is because if you double all the dimensions, the total area the picture takes up is increased four times, not twice, and that is how the eye, and therefore the brain, reads it. You could try increasing only the height or only the width to keep the overall area in its correct proportion but that does tend to look silly. It is better to just show two pigs or whatever.

Graphs can also be misleading.  They can be flattened or steepened by adjusting the scale on one of the axes to make a small variation look significant. If sales had gone up from 1000 to 1010 it should look like the minor change it is, but it could look like a big jump if you make the figures appear to start at 900 rather than showing the relevant axis, usually the vertical one, starting at zero.  I notice that the graphs function in Microsoft Office automatically adjusts the axes to emphasise small changes, presumably to save space and to make them seem clearer, but they do tend to mislead unless you mentally adjust the other way.     

So when you look at graphs or other visual representations of figures, always look carefully at the numbers themselves and mentally adjust the image to reflect the reality. And of course always resist the temptation to visually exaggerate trends or whatever. Journalists and politicians, among others, usually want to make every story seem as dramatic as possible:  real statisticians and risk managers want to know and to tell the truth, dull as it may sometimes be!                                                                                                                                       





















































Why Might You Need a Claims Handling Service? And When?

People sometimes ask whether my services are necessary or cost effective. Here are answers to some of the more specific questions you might be thinking about.

What if you are not be insured?

  • Employers Liability Insurance is a legal requirement if you employ anyone, but you might not have it.
  • Public Liability Insurance is only desirable and many people think they do not need it.
  • If someone brings a claim against you, you cannot just ignore it.
  • Unless you are experienced in this yourself, you will need someone to handle the claim for you.

Are my services necessary if you do have liability insurance cover?

  •  Perhaps! You may have an insurer who gives first class personalised service, making anything else superfluous, but many people find they need someone to act as go-between, to chase up their insurer, to interpret some of the letters their insurer writes to them, or to hold their insurer to account, so as to get better value for money for their premiums.
  • Most of my best work has been done working in conjunction with insurers. Cooperation rather than conflict has been my main experience.
  • Some insurers find it helpful to have someone with relevant knowledge and experience whom they can deal with on behalf of their client, especially where the client does not have the time or ability to deal with all their questions as promptly as is needed.
  • You may find some or all aspects of your claim are not covered and so your insurer is unable to help resolve it.

 Do you need a solicitor?

  • Sometimes! For certain legal processes a solicitor or barrister is required but many claims can be settled, one way or the other without a solicitor.
  • If it is necessary to engage solicitors, it will help them, and thus keep costs down, if the matter has been properly investigated and a file with all relevant information and documentation can be provided.

Why wait until you get a claim?

  • Things are likely to go much better when you get a claim if we have had at least some previous meetings where I can advise you on your procedures and agree our arrangements so we can hit the ground running: time is money when dealing with claims.
  • Also, since 2013, you have only 60 days to deal with a liability claim.  You must either have set out your defence in detail and sent it to the claimant’s solicitors, or have agreed to pay it: after that time you cannot submit any new evidence. You don’t want to lose just because you did not meet the deadline!

Why not contact me for a chat? It won’t cost anything.

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Could Some Risk Management Have Prevented World War I?

Although people still argue about the causes of the Great War and ask who was to blame, it seems clear that nobody in the British Government actually wanted a war. Well, it seems some of them may have done, but only when it got to the point that the alternatives looked to them to be unacceptable. It seems that the Russians and the French were also reluctant participants.  Even the Kaiser does not seem to have wanted what he got. So what went so very wrong? Let us look at it from a Risk Management point of view.

If war was an outcome we all wanted to avoid, what risk control measures did they put in place to prevent it?

  • The most important of these was diplomacy, and that meant alliances. The idea was that every country had allies and that they would all protect each other, so that nobody would be foolish enough to attack anyone else. The disadvantage of this approach was that there was no mechanism for preventing a conflict from escalating.  Any local dispute was likely to end up going global. As it did.
  • The second risk control measure was deterrence. It was thought that having a large army would deter other countries from attacking. Since all the major powers followed this approach, however, it only added to the risk that any conflict would be really serious. (Strange as it may seem, Britain, with a huge worldwide Empire, had the smallest army of all the major powers, possibly because people trusted in the Navy and in diplomacy).
  • The other risk control measure lay in the belief that the leaders of the various nations knew and understood each other, so new how far to go. It was rather like a game of poker. In the 19th Century the German leader Otto von Bismarck had been famous for his ability at brinkmanship. Sadly, Kaiser Wilhelm II forgot to stay on the right side of the brink, as he seriously misjudged the British in particular.

We all know that diplomacy and deterrence failed in 1914 with catastrophic results.  In short, none of the above measures succeeded in preventing the War, and it could be argued that they increased the risk.

What else could have been done? It might have helped if there had been an institution such as the United Nations to allow issues to be settled at the conference table before they got to the battlefield.

Do you have any risk control measures which make the risks worse? Do you need to review them? Do you need an independent view?

How The US Navy Fooled Themselves With Statistics.

In the early 20th Century the US Navy discovered that the death rate among its sailors was lower than that in the American population in general. This information was used in their recruiting publicity. Most people believed that this was because sailors led a healthier lifestyle and got better food and medical care than the average person.

After some time, somebody spoilt the party by pointing out that the fair comparison would be between the death rate in the Navy and that of men aged from their late teens to early thirties. The senior officers in the Navy, as well as a lot of other people, were shocked when they found that the death rate in the Navy was actually much higher than that among other men in that age-group.  In the general population many people in died of old age, infant and childhood diseases and complications around childbirth.

This shows how easy it is to be deceived by statistics, or even to deceive yourself, by simply failing to ask whether you are really comparing like with like. I have no reason to think that anyone in the US Navy was being deliberately dishonest, and I am sure many people today jump to conclusions without asking the right questions.  So just think how often we are all likely to be misled by advertisers, politicians and journalists who do want to mislead us! Think about some of these examples:

  • If brushing your teeth with ABC reduces decay by x% is that compared with other brands or with not brushing them?
  • If children at a certain school perform better at GCSE than the national average, is it because of something they are doing at the school, or because it is in an area where most parents are well-off and ambitious for their children?
  • If a poll shows that x% of the readers of a certain newspaper agree with something, is it because that paper attracts a certain type of person?
  • If another poll shows y% of people are dissatisfied with the Government/the Council/the BBC, is it because the dissatisfied ones are more likely to respond to the poll than anyone else?

Do not be misled, and do not mislead yourself or others.