While the construction sector experienced shortages in building materials and labour in the wake of COVID-19 and Brexit, the market has since stabilised, which is encouraging. However, the situation is more fragile in the motor sector, where they’re more dependent on the Far East for parts, particularly microchips and other essential electronic components.
Crucially, the supply chain must manage customers’ expectations and communicate regularly so they understand that shortages or delays are often unavoidable. In this blog, I explore how insurers and brokers are evolving their supply chain strategies to address ongoing issues.
Stability, sustainability and engagement
In recent years, there has been greater focus on supplier stability, sustainability, and how they engage with claims customers. This has created a greater level of sophistication and capability in the market, and the design of innovative products and services that meet customers’ escalating expectations has never been greater. But, as always, these developments must be balanced against cost.
Innovative digital tools, the importance of integrated systems, a joined-up service between suppliers, robust environmental, social and governance (ESG) credentials, specific vulnerable customer support and good oversight and control – these are all positive developments that are now more prevalent in the supply chain.
Key performance indicators (KPIs)
TPAs and loss adjusters work with many different suppliers, and sourcing has become more sophisticated. However, having access to a dedicated managed contractor network provides greater capacity security to clients and their customers at proven benchmark costs. In this secondary supply chain, everyone works on integrated systems, and each contractor’s operational standards and workmanship are managed and vetted by claims experts. It’s a seamless experience for the customer and insurer clients, who also have oversight over reputational and contractor performance.
So often, we see supplier KPIs used in ways that don’t drive the best behaviours and outcomes for the customer. So, in our experience, a rigid performance framework doesn’t work. We look for partners who promote a flexible, responsive culture that prioritises each customer’s needs. Measuring performance against the baseline metrics of ‘how long, how much and how happy’, the mechanism that delivers a really great service will undoubtedly supersede standard KPIs.
Factors shaping supplier relationships
A caring culture is important – social conscience and working to benefit the community – together with high service standards and financial stability. At Sedgwick, we work with partners who align with our carbon-neutral credentials, and this must cascade down through their supply chain. In the coming months, this will become increasingly important across the market as we work to further minimise clients’ Scope 3 emissions.
Regulatory pressure and changes
Regulatory pressure and Consumer Duty continue to generate an even greater focus on the customer. The development of digitally rich tools is a positive thing as this enables wider round-the-clock support for customers throughout the claims process. And in a fully joined-up claims management service, administration is streamlined by collecting information once and then sharing it with secondary suppliers via fully integrated systems. However, online isn’t for everyone, and a great claims experience means different things to different people.
It’s crucial that customers aren’t pushed down the digital route, and they must always have easy access to a one-to-one response if they want it. It’s also incredibly important that specific capabilities are on hand to recognise and provide extra support to vulnerable customers.
Learn more > Visit our website to explore our solutions and read about our carbon neutrality initiative in the UK.
Tags: building, Claims, construction, empowering performance, international, Property, regulations, Restoring property, supply, Supply chain, sustainability