How to Set Up a Claims Management Business
The key to forming a claims management company (CMC) — and getting regulatory approval for it — is in the preparation. How can you prepare perfectly? With the very best claims management software.
Now might be a better time than ever to establish a claims management business. Since the deadline for submitting claims for mis-sold Personal Payment Insurance (PPI) passed on 29 August 2019, several new areas of potential misselling of financial products and services have emerged. Examples include Packaged Bank Accounts (PBAs), pension transfers, and Guaranteed Asset Protection (GAP insurance) — in addition to claim categories popular for some time, such as flight delays and payday loans.
Furthermore, the current coronavirus pandemic — which is likely to result in thousands of businesses closing, jobs lost and cancelled services — will no doubt result in a sharp spike in the number of people pursuing claims for compensation.
Before going ahead and setting up your own claims management business, consider what area of this industry is best suited to you; the one where you have the most experience. An authorised CMC can conduct any regulated activity in any of six sectors: financial service and products, personal injury, housing disrepair, specific benefit, criminal injury and employment.
On 1 April 2019, the Financial Conduct Authority (FCA)assumed regulatory responsibility for CMCs (replacing the Claims Management Regulator). All claims companies must now register with the FCA and abide by their regulations. These rules were established to protect customers by ensuring that CMCs comply with minimum standards.
Make Sure Everything Is in Order
As with anything to do with establishing an enterprise in the UK, it pays to ensure you have all the necessary paperwork and documentation before going ahead with an application. Obtaining authorisation from the FCA to operate as a claims management business can take six months; this could double if an incomplete application is submitted. Starting the process early will allow you to capitalise on new claims opportunities in the coming six to 12 months.
Once your application is submitted, the FCA will assess if you are “ready, willing and organised” to comply with their rules.
Are you “ready”? The FCA will look at what steps you have taken in the process of completing the application, such as reviewing FCA website information and seeking legal advice.
Are you “willing”? If the applicant presents as open, honest and proactive, the FCA will be inclined to interpret this as a willingness to comply with their regulations.
Are you “organised”? Applicants should have all the necessary documents and arrangements in place to ensure compliance with FCA regulations from day one.
An application to the FCA to operate as a CMC must include certain key elements including a National Insurance or passport number, relevant business documents, projected income figures, planned financial activities, a business plan and details of partners. A full list is on the FCA website.
How to Handle Claims Most Effectively? With Claims Management Software
Assuming everything goes smoothly and you have a new claims management business, it is time to get to work. You will want the maximum revenues possible for the least amount of work and expense. Manual claims processing can be fraught with error and extremely time-consuming. Computerising the entire process is the wise way of handling everything.
Using claims management software to deal with all the various types of claims helps to ensure errors do not occur. It also means that as the process is completely automated, companies can handle large amounts of claims with relative ease. Personnel who would otherwise be engaged in the lengthy task of doing it all by hand are instead put to better use. As a result, productivity goes right up while costs and efficiencies come way down. This makes for more competitive and profitable claims management companies.
At Logican, we provide some of the very best claims management software — including insurance claims management software — on the market today. We have designed our software with you in mind, so it is not only simple to use, but it also does not require ongoing training. Additionally, it is highly customisable to each company’s operations and requirements.
Thanks to the latest and greatest in claims software solutions, succeeding in the claims business has never been so straightforward.
To find out more about claims software and how it can help a new or established claims management company, contact Logican today and our experts will get you started.