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Insurers do not operate in a vacuum but rather depend on third parties to help them discharge their obligations, or optimize their operations. If insurers have an interest in Big Data and Analytics, then so too must their intermediaries. Such ‘intermediaries’ include:

■ Tied Agents – A company sales person who promotes the products of their employer only. Under section 39 of the Financial Services Markets Act 2000 (FSMA) they must make their status clear to the applicant/purchaser at the earliest opportunity.

■ Independent Agents – Also known as an insurance sales agent or ‘producer,’ the independent agent usually sells a variety of insurance products and is paid a commission or remuneration. Usually the independent agent is an independent contractor, often with an individual business. National Alliance Research indicates that on average an independent (US) agent concurrently works with 13 property and casualty insurers, and six life insurers on a regular basis.

■ Loss Adjusters – Independent or tied claims specialists whose duty is to administer a submitted claim within the terms and conditions of the policy. The expression ‘adjuster’ leads many to believe that the role of the professional involved is one of adjusting, or ‘reducing’ the claim as presented. Whilst that may the case in some instances, the profession can trace its roots back to the late 17th century and since that time they have been variously known as ‘valuers,’ ‘surveyors,’ ‘assessors’ and more recently ‘adjusters’ – a term which seems to have become more commonplace in the mid-1950s.

■ Repairers, Body Shops and Restoration Contractors – A broad group who are variously appointed either directly or indirectly by the insurer, or the policyholder in the event of a claim occurring. Their responsibility is to undertake the repair of either a property or vehicle to a prescribed required standard. This must be to the standard of the local building or construction regulation, or the required standards of the motor manufacturer. In the case of a restoration contractor, this function is usually initially to ‘stabilize’ the building following fire or flood prior to permanent works taking place. In some cases, the restoration contractor is able to undertake the permanent repairs.

These independent parties directly involved in the repair/fulfillment process came to the fore as a result of the desire of insurers to gain greater control over the repair process, usually in the light of claims costs increasing and also the impact of policyholder fraud. Historically the policyholder was invited to provide three estimates for a repair, and from time to time these were found to be provided by the same repairer albeit using different letterheads. (Astute claims handlers were usually able to identify spelling errors which were consistently made in each of the three estimates.)

In more recent times, as well as exercising better control over the process of repair, insurers have been able to secure cost discounts with these intermediaries based on volume and term agreements, e.g., two-year contracts or longer. In addition, this has also been presented to the policyholder customer as an ‘added value’ attribute, removing the burden of concern away from their customer at the moment of distress.

As with all parts of insurance, the specific business drivers for intermediaries (Table 1.5) are complex and will depend heavily on the nature of the intermediary involved.

Table 1.5 Key drivers of intermediaries