A ‘Take 5’ reflection on the ERC Retail Loss Group’s latest webinar on the use of video to manage fraudulent compensation claims.
“Where there’s Blame, there’s a Claim!” - A phrase that since the early noughties has become more frequently heard wherever you are in the world. Alongside that, society’s moral compass move from “I’m ok thanks” to what we see growing today where legislation supports people looking for convenient ways to claim easy monies, increasing insurance premiums significantly. The Health and Safety Executive in the UK estimate a cost to businesses, employees and government of £15bn a year through work related injuries and ill-health. Other insurance led reports show that, amongst the 20 biggest Personal Injury firms in the UK, £4bn was successfully claimed in 2018, which excludes claims for the new significant growth area of defamation. Make no mistake – this whole topic has significant impact to any retailer’s bottom line and brand if not managed well.
In Professor Adrian Beck’s recently published, ECR Retail Loss Group ‘Reviewing the Use of Video Technologies in Retailing’ study, I was not surprising to see over a page and a half dedicated to the increase use in video technology for ‘Assessing Health & Safety Incidents’. The quotes from retailers showed that Video Technology is now being used much more by a non-traditionally associated user.
It was nice to be invited back as a guest to the ECR Retail Loss Group’s latest monthly Webinar series on the back of Professor Beck’s research paper – this time the subject being ‘Using Video to Manage Fraudulent Compensation Claims’. Led by Professor Beck, the webinar was structured into five strategic areas of questions where retailers from around the globe, including UK & Europe, America, Finland & Italy, shared their experience. You can find the Webinar here to listen for yourself if you missed it and its a good starter if the area of compensation claims is new to you.
Here is my ‘Take 5’ thoughts from the webinar.
· Business Cross Functional Thinking is Still in Its Infancy – There were mixed and varied replies from retailers when it came to considering claims data in any business case investment model. It was pleasing to hear of improved cross functional working with Video Technology that is taking place with internal stakeholders like Marketing, Health & Safety and Legal. But there is also much more that retailers can do to reap the ‘Return on Investment’ rewards by including claims data. One retailer expressed that they were now looking at a Corporate Video Technology ‘Tsar’ being placed in a future structure – something a future ECR Webinar (in October) will discuss as a key recommendation from Professor Beck’s report.
· Quantifying the Value of Video Technology in Claims is Difficult, But Not Impossible – None of the retailers who were on the webinar said that they could fully quantify the financial benefit of video technology with claims. As one retailer said, it is sometimes hard to track a claim from start to finish because it can take months, maybe years, to conclude. One participant did positively share that successful insurance premium renewals would be a successful Key Performance Indicator for them, with Insurance Brokers reviewing past history of settled claims as part of that process.
· The Impact of Having Video Technology for Claims is Greater Than Not Having It – Linked into insurance premiums, it was good to hear the experiences of a number of retailers who said that it was a condition on insurance premiums terms to show you had good Video Technology installed throughout the estate, so claims could be defended. But as one UK retailer expressed, this is sometimes about balancing quality of image for evidence, the cost of system, and the risk of claimed amounts. A number of retailers shared that the Loss Prevention function still managed the design process, but because of cost and knowledge they wouldn’t necessarily make a strategic design decision about placing a camera down a corporate accident hotspot. How do you come up with an ultimate video technology design scope when so many stakeholders want so many different things to help them? Does Loss Prevention shout louder than Insurance, when Insurance could lose more money in claims and increased premiums? That’s probably a question for most leaders to consider when considering total profitability or loss.
· The Tensions of Claims Vs Video Storage Vs GDPR Vs Local Legislation Needs Consideration – This subject came up a number of times with different experiences, depending on where the company is based in the world. But most success or failure with compensation claims would be around the video retention times which creates tensions with GDPR Managers who may dictate different retention timescales. A number of retailers shared how local legislation has also had an impact on this too. As one Italian retailer noted, they had issues around prohibited recording of colleagues instore during working hours. Past experience in the area of retention has shown me that pro-active training and coaching is important to ensure video evidence of any known Health and Safety incidents are saved and the completing any internal forms and completed so that Head Office teams can review even after normal retentions have elapsed.
· The Future Has to Use Analytics or AI Somehow, Doesn’t It? – whilst participants on the webinar agreed that analytics should pay a big part in the management of fraudulent compensation claims, it was clear that there was only one UK retailer who was seriously looking at increasing the investment in the near future. I agree with Colin Peacock’s view that there was probably a need for more Audio integration with Video Technology, to both hear and see the scene of an accident. In my experience, the example of increased defamation cases in Ireland over the past three years, has needed the introduction of audio and video recording body cameras for security workers to combat the false claims being made.
In summary, for most retailers it is now commonplace to have a large investment of people assigned to defend personal injury and defamation cases, with the aim of keeping costs and insurance premiums low. Those insurance teams who once relied upon witness statements, documentation and store visits as their key success tool now rely more on video technologies as the primary evidence to defend those claims. There are massive positives to having a quick, first response video view of what actually took place throughout an incident to mitigate a claim – or even go as far as defend it in court.
Does the future of Health & Safety and Legal teams need audio, artificial intelligence and computer analytics to be more proactive – going even as far as to stop false claims altogether? The answer is definitely yes, but I’m not sure that there is a ‘one system fits all’ solution available currently that deals with the different types of shop builds, environments or customer/employee behaviour. Perhaps that’s a challenge that someone can prove me wrong on?