Accident claims managment companies – Any advice how to start one?
I am interested in setting an accident claims management company and wondered if anyone can offer advice on what I need to consider before I do. Specific questions are: Would I need to be registered with the Ministry of Justice? Would I need any specific qualifications? What IT software would I need? Do these companies work with a specific solicitor or just go out to a panel? Anyone who can provide a bit of guidance on the above and on how these businesses work in general that would be much appreciated. Many thanks.
I set up solo last year after 10 years in the claims industry, I have been very very lucky in that I have quite a few contacts within the industry and therefore I get a decent number of claims passed into me without needing to spend as much on marketing.
Would I need to be registered with the Ministry of Justice?
Yes- there are 2 fees payable before you are authorised, the application fee and the annual fee. The application fee is £950, the annual fee is calculated once they are willing to authorise you.
(You can calculate your annual fee from the latest Fees Determination which can be found on the Authorisations page of the MOJ website)
Would I need any specific qualifications?
No, although you would be expected to be a ‘competent person’
What IT software would I need?
Whatever you wanted really- something for you to keep track of claims, fees etc, but this depends on how you would run- if you are simply passing the whole claim out then Microsoft Office may do, if you were to deal with hire and repairs/PAV’s then you would need a system which enabled you to monitor hire periods, chase up etc etc. Also if you were to provide hire yourself would you have a fleet? Rely on someone else’s fleet? Would you adhere to the ABI GTA. Trust me- it is easier to palm the whole claim off- quicker turnover and less hassle.
Do these companies work with a specific solicitor or just go out to a panel?
You get the best prices by using one/two solicitors for all your claims- that way they know they are getting everything from you.
would you offer a recovery service, if so could you agree this with a local/national firm? What payment terms would they want- as cashflow might be slow to start with and depending which sols you use you may not get paid until the claim is settled (6 months ish? on some cases where liab is disp)
Do you have experience in the field? It’s a great business to be in and can be very profitable if done right but you need to be confident that you can do everything and do it right, otherwise you’ll lose customers, lose word of mouth referrals and incorrect advice can end up in you having to pay out.
I worked for a couple of insurers in their PH claims teams, TP claims teams, Credit Hire teams, Third Party direct claimant and Personal Injury departments and then went on to work for an accident management company before going solo- and I still get it wrong sometimes.
Finally, the MOJ Reforms going through currently are potentially going to ban referral fees- the only way an ax management co could work then would be to have an in house solicitor/a solicotr who will provide his ‘supervision’ over fee earners claims- so you offer the full package in house and benefit from the costs
I hope I have given you some decent advice that you can use, without putting you off, and with passion and experience you can make a go of it.