Most Direct Insurers offer their clients a cash-back bonus if they do not claim against their Insurance policies. This reduces the number of claims from existing clients and promotes the sales of new policies. These types of incentives put many consumers at risk as they do not fully understand the implications of not claiming from their own insurers. This is especially true in case of third-party claims when policyholders may feel that someone else is responsible for the accident. To avoid losing their cash-back reward they are likely to approach the insurer contracted to the third party rather than their own insurer. 


"When consumers approach the insurer of the person or company ‘responsible’ for the accident in their private capacity, they are not protected by contractual law because their contract is with their own insurer," says Chris Barry, managing director of Heavy Commercial Vehicle Underwriting Managers (HCV). "Consumers have little understanding that motor claims are not transactions but variations of legal culpability."


Insurers that focus their marketing and sales activity on passively discouraging policyholders from claiming may not actually be able to handle claims that well when they do occur. The reputational damage caused by consumer perception that insurance services aren’t reliable or trustworthy filters from one provider to the whole industry.  ( Source: Risk Africa Magazine. May 26, 2017. )