CLAIMS

Performance

As at 30 June 2022, 315 general insurance files were opened for the year. This is lower than the 2020/21 year (328) and the lowest total since 2016/17 at the same point in time. This is a remarkable achievement given the continued growth of the profession.

The 30 June 2022 actuarial assessment for the 2021/22 year was an expected central estimate of $16.9M (nb: actual incurred value at 30 June was $10.6M). This is consistent with the trend we have seen since 2011/12 where the central estimate for that period now averages $16.1M. The actuarial assessment also confirmed an overall collective improvement in the performance of recent policy years (from 2017/18 to 2020/21) with central estimates for those years, as a whole, decreasing some $3.5M from the same time last year.

A combination of an excellent initial estimate for 2021/22 and earlier years outperforming the actuaries’ estimates delivered an outstanding claims expense for the year of $7.9M.

Conveyancing matters represented the largest value area of law within the portfolio, which is perhaps unsurprising given the substantial increase in conveyancing work undertaken during the year. Proportionately, conveyancing (both residential and commercial) represented 38% of the files and 35% of the overall portfolio value.

Commercial claim values fell substantially from recent years (2021/22 at $1.9M cf. 2020/21 – $3.2M; 2019/20 – $3.5M; 2018/19 – $4.4M). Whilst this part of the portfolio may well develop further into the future, the current figures suggest it will be a very good year for that area of law.

By Area Of Law

2021-22 Claims Value Percentages Compared to Long Term Average

KEY POINTS (AS AT 30 JUNE 2022)

• Conveyancing at 35.0% represents the highest value area of law for 2021/22 and it remains the highest component of the overall portfolio since 2002/3 (33.3%). This result reflects the number and value of conveyances undertaken by insured practitioners in Queensland.

• Commercial claims for 2021/22 were quite benign compared to the long term average. Nonetheless, with an overall portfolio value at 31.4% since 2002/3, commercial may soon supplant conveyancing as the largest single area of law in the portfolio (by value).

• Wills & Estates represent 14.2% of the 2021/22 incurred, well up on the historical average of 5.5%. Recent years have trended higher due in no small part to the increasing value of estates. A similar experience is found with family law (10.1% against a long term average of 4.7%).

• Personal injuries has maintained its good performance of more recent years, now with only 8.4% by value against a long term average of 12.4%. Personal injuries remains one of the Lexon “success stories” following the creation of the PI risk management tools.

Membership Survey Results

The claims team records feedback from practices with a concluded claim (whether managed direct by that team or in conjunction with panel (where appointed)) to ensure that any learnings are implemented into our future interactions.

For the period 1 April 2021 to 30 June 2022:

• 148 surveys were sent

• 65 responses were received

• Response rate = 44%

The results delivered a customer satisfaction score of 85.9%. By way of comparison, the customer satisfaction score average for property/ home insurers is 78% and for financial services 77%, with a score of over 80% considered the “gold standard” 1 .

We Continue To Outperform Our Competitors

Both LawCover and the Legal Practitioners’ Liability Committee (LPLC), respectively the NSW and Victorian based legal professional indemnity insurers, see their five year claims estimates trending upwards from 2017/18. Lexon, on the other hand, has seen its trend line decrease over the same period. This is an outstanding achievement and testament to the hard work and expertise provided by our risk and claims teams.

CENTRAL ESTIMATES – LAST 5 YEARS (Current

1 Per monkeylearn.com accessed 26 July 2022

Our Approach

Lexon takes a project management approach to handling claims, which is implemented via the Active Resolution Management (ARM) philosophy. ARM seeks to ensure that:

• A clear direction is set for each claim and that the actions taken in managing the claim support that direction.

• Claims “drift” is avoided.

• There is a “common mind” as between the stakeholders to the claim – the insured, Lexon and the panel solicitor.

• All issues are identified and managed at the right time.

• Costs are controlled and monitored.

• The impact of all decisions in relation to the claim are assessed prior to that decision being made.

Lexon’s capacity to deliver on this philosophy depends very much upon the quality of its claims solicitors. Noel Greenslade leads a dedicated team of claims handlers, each of whom is legally qualified and has many years’ experience in handling professional indemnity claims. This team works closely with Lexon’s legal panel to deliver the best results possible for our insureds.