A leading law firm and an accident management company have joined forces to offer insurance companies and brokers a ‘white label’ alternative business structure (ABS) to revolutionise motor claims processes.
Parabis Ltd – part of the Parabis Group – has linked up with Gemini Vehicles Solutions in a bid to persuade insurers to combine legal and non-legal operations into single multi-disciplinary entities, a move given impetus by the prospective ban on referral fees in personal injury.
The Parabis Group provides a range of insurance-related services through various businesses, but is at heart a legal practice. It has talked openly about becoming an ABS itself and seeking external investment once allowed. Parabis Ltd provides outsourced claims management and consultancy services.
Tim Roberts, senior partner of both Parabis Ltd and Plexus Law – the group’s defendant law firm – said: “ABSs offer an innovative and neat route to addressing a number of issues facing the insurance sector today. A wealth of concerns ranging from access to justice for consumers to filling the income void created by the banning of referral fees could be met via ABSs.”
The model is a purpose-designed, end-to-end business capable of handling all injury and non-injury aspects of a motor claim, sitting behind a white-label ABS owned by the insurer or broker. Operating costs would be streamlined with everything being handled by the ABS, stripping out existing referral expenses otherwise incurred throughout various stages of a claim.
It would reduce costs to insurers and also potentially generate income by bringing claims on behalf of policyholders.
Mr Roberts said ABSs are mainly being positioned around law firms seeking external investment to fund growth and development, and retailers developing their in-house offerings. What he and Eddie Longworth of Gemini are proposing is “an innovative third way”.
Mr Longworth told Legal Futures that while insurers could choose instead to buy up a law firm, this would be more difficult than owning and controlling their own legal services vehicle. He said there have already been initial conversations with several insurers about the offering.