According to a new report from Aon’s M & A and Transaction Solutions team, despite last year’s market uncertainties, claims on representation and warranty policies did not really slow down.
According to the report, Aon confirmed that the number of claims filed in 2020 increased by 23.5% compared to 2019. This is in line with the increase in the number of representations and warranty policies submitted by Aon in 2018 and 2019. Last year, overall billing frequency was at the same pace as last year.
“This meant that insurers and their advisors were busier than ever, but for most of the year, Aon was concerned about investigating and analyzing claims, or the insurers’ willingness to pay. We haven’t seen any significant changes in the insurance claim process, “said Aon.
However, towards the end of the year, Aon noted a change in the approach that insurers and their consultants adopted in validating assertion and warranty claims. The report found that insurers spent more time reviewing claim details and applied a more detailed investigation into loss calculations.
“However, despite the challenges presented to the representation and warranty market in 2020, Aon continues to confirm that many claims are successfully resolved and fair claims are paid.” Said Aon.
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Jennifer Drake, Senior Vice President, said: For transactional solutions at Aon. “The increased amount and limits of policies introduced in the last few years are the simplest and most likely cause of the number corresponding to the size of assertion and warranty claims.”
The additional findings of the report are as follows:
- As of the end of 2020, agencies and insurers have paid more than $ 500 million to Aon clients in North America since 2013, of which nearly $ 375 million was paid in 2019 and 2020.
- Twenty-eight percent of tax insurance between 2013 and 2020 had pre-claim notices for general proceedings filed by policyholders. Formal billing notices were submitted at 7% of the policy.
- The insurer reported that it would pay 76% of claims and guarantee claims for insurance contracts from 2013 to 2020 in dollars, but 24% was paid based on applying multiples to damages. .. Half of the insurance companies surveyed by Aon believe that the number of claims for damages has increased in recent years.