Bike claims need a special approach
Because motorcycles make up only a small percentage of motor claims, the insurance industry hasn’t always fully understood the significant differences in this market, argues Dickson Tysoe of specialist claims solutions provider Bankstone. Motorcycle claims management needs a distinct line of approach and a different set of skills from those for four-wheeled motor claims
Cars and bikes are very different machines. For reasons that will be perfectly obvious to anyone who has ever ridden a motorcycle, two-wheeled motor transport is an utterly different proposition in practice to the four-wheeled variety.
In reality handling motorcycle claims requires a completely different approach and a different set of skills from four-wheeled motor claims. Motorcycle claims arise in fundamentally different ways to standard motor claims. Dealing effectively with bike claims requires a proper understanding of how bikes behave on the road and how accidents arise. Motorcycles are also subject to radically different damage and theft claims profiles compared with other road vehicles.
Four out of five motorcycles in the UK are second vehicles. Rather than being the owner’s principal means of transport they are a pastime, often a passion. While many car owners are unconcerned about what goes on under the bonnet, bikers typically have a much deeper level of knowledge and understanding of their machines. But if bikers know a lot about their machines the same, sadly, is not always true of those assigned to repair them following an insurance claim.
Motorcycle repair is a highly specialised business, requiring expert knowledge, specialist skills and equipment. Getting motorcycle repairs right is far more critical than other motor repairs. If there is a problem with a car repair, the owner can usually simply drive back to the repairers and point out the fault - or at worst they may need to pull over and wait for recovery. A faulty bike repair can easily result in serious injury or death.
Most staff in motor claims front-end environments would not know a lever from a peg, a swinging arm from a hero blob, let alone the typical damage patterns if a Honda Fireblade lands on its left side rather than its right. This lack of specialist understanding represents a missed opportunity to gather data, to handle claims effectively, and build rapport with the client. If in-house staff lack the necessary specialisation, it will often make sense to outsource to a white-labelled third party service provider that does.
Motor insurers often have panels of several hundred repairers and body shops around the UK. Some of these will have - or at least profess to have - specific experience in repairing bikes. In reality, there are probably no more than a dozen independent repairers in the country with an outright specialisation in motorcycles. It is only firms like these who have the necessary expertise and who will have invested in the specialist machinery and equipment (e.g. for straightening or jigging frames, realigning the headstock, plastic welding, paint matching, or X-raying critical parts) to offer a genuinely bike-specific service.
The logistics of routing all motorcycle repairs through such specialists require some management, but there are very strong arguments for doing so. The first instinct of non-specialist repairers (or repairers linked to bike dealerships) is often to replace any damaged part. A specialist however will quickly recognise what can be repaired more cost-effectively. Often this can cut repair costs by as much as 25% and dramatically compress timescales.
Through an expertly managed specialist motorcycle claims infrastructure, it is possible to arrange expanded recovery radiuses five to six times over the industry norm. Dedicated motorcycle repairers also have the specialist recovery and delivery equipment to ensure safe collection and delivery - avoiding the all-too-common scenario where a bike that was repairable at the scene of an accident is a write-off by the time it arrives at a motor body shop after a roller coaster ride in the back of a truck.
Equally the engineers who inspect damage on the insurer’s behalf need specialist knowledge of bikes if they are to do their jobs properly. Understandably motor insurers do not tend to have the volume to establish a nationwide network of dedicated bike engineers - but working with a third party specialist can achieve the same benefits.
The average motor engineer is unlikely to have the knowledge to challenge any bike repair estimate the body shop presents them with, whereas a competent and educated motorcycle engineer can protect the account considerably. In terms of fraud prevention and non-disclosure, they will also be able to identify nonstandard parts such as racing suspension, wheels and bodywork that other engineers would miss. This gives the carrier the option of re-rating or repudiating, either of which puts money back in the pot.
It is quite possible today to operate an effective remote engineering function by working in partnership with specialist outsourced providers. Half a dozen digital images supplied by the repairer including plates, clock and main areas of damage from a m variety of angles can enable expert bike engineers to carry out desktop engineering cutting costs by 50% or more and cutting timescales by up to 48 hours.
Replacement is another key component in the motorcycle claims process. Working with a partner who can source any type of bike at a cost well below retail prices allows the insurance provider to offer a replacement that will be acceptable to the policyholder (assuming their expectations have been expertly managed further up the chain) thereby retaining a satisfied customer for renewal.
Where a stolen or written-off bike elicits only a disappointingly small settlement cheque, the odds are it won’t go to fund another bike - and yet another customer will be lost forever (one more set of leathers left to languish in the loft). Statistics suggest that the lost customer would not have had another claim for an average 4-5 years - even before taking account of their greater security and safety consciousness following an incident. Consequently the opportunity to recover some of the claims cost in premiums is missed to both the insurer and broker.
At every stage in the process specialisation is the key to operating profitably in the motorcycle insurance market. If considerations of scale prevent brokers or insurers establishing their own specialist infrastructures, working with outsourced providers with the appropriate expertise can make a big difference.