In this our third article on the property claims challenges we’ll be focusing on the often tricky and complex area of supplier management. We cannot emphasise enough just how important it is to have the right suppliers working to the high standards you expect. But even if you’ve already done the leg work and got the right people in it’s still not always plain sailing.

Construction companies, painters, decorators, gardeners, and retailers are, like most other industries, struggling to source materials and products. From timber to semiconductor chips these shortages are having a huge impact. It’s not just availability, it’s the significantly inflated costs which are all passed back on to the insurer and ultimately the consumer.

As our recent article on motor insurance alluded to the perfect storm; Brexit, the pandemic, product and material availability and costs are elongating the claims process. Costs are additionally being increased in high impact claims situations as consumers are being forced to stay in hotels or alternative accommodation for much longer.

Some insurers are choosing to cash out but if an insurer can’t find a builder how will the customer? Whilst it may seem like an initially good solution for both parties that is likely to diminish as consumers find themselves project managing their own repairs without the negotiating skills of a large insurer and the ripple effect will be that customer satisfaction will decrease. In this social media savvy world, just one tweet can damage a company’s reputation.

Add to this the challenge of ESG. The carbon footprint of a property claim can be huge. From the initial loss adjustment visit to the multitude of suppliers who walk through the door to get the job completed from an environmental perspective it is tough.

So, what should insurers be looking for when it comes to supplier management?

• The customer journey: Ensuring that it’s integrated, easy to deal with, low touch and consistent.
• Operational resilience: Ensuring the security of supply and future regulatory requirements.
• Implementation of processes: Is it easy, is it time and resource effective?
• Indemnity control: Is there a clear oversight of this and expense costs?
• Digital journeys: What solutions do suppliers have that work with your systems – and vice versa.
• And maybe most importantly – partnership: A supplier is an extension of an insurer. The consumer doesn’t differentiate, and neither should you.

It is important to acknowledge that supplier management is a two-way thing and it’s vital to be transparent about the goals required and the performance of that supplier.

We can’t promise that it is easy. But we can help.

Related reading

This article sets out what to look for in a supplier, but the challenge most property insurers are facing is more fundamental: a shortage of qualified builders, decorators, loss adjusters, and tradespeople that makes it difficult to populate and maintain a reliable supplier panel in the first place. Our article on resource and budget constraints in property insurance claims addresses that problem directly, examining how insurers are responding to the combination of the Great Resignation, recruitment difficulties, and labour shortages across the construction and claims sectors, and what options are available when internal capacity and trusted supplier networks are both under strain at the same time.

How Procurato can help

Selecting the right suppliers and holding them to the standards this article describes begins with knowing whether they are capable of meeting those standards in the first place. Our Supplier Due Diligence service gives insurers a structured, evidence-based assessment of their supplier base: evaluating financial stability, operational resilience, ESG performance, regulatory compliance, and alignment with strategic objectives, whether for new suppliers being onboarded, existing relationships being reviewed, or a supplier estate inherited through acquisition or restructuring. If you want confidence that the suppliers operating in your name are genuinely capable of representing your brand, we are happy to talk through what that review would involve.

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