Review of the Year: Loss Adjusting: Outlook unclear

weather-map-newsletter

Benign weather, regulation speculation and insurer panel reviews turned what began as a positive year for loss adjusters into a period of uncertainty. How do key figures from the sector feel about the past 12 months?

Loss adjusters entered 2013 on a high after their services were required extensively in the US in the aftermath of Superstorm Sandy, with some even seeing their first-quarter results boosted by this activity. But the year was not to continue in the same spirit as 2012.

Worries about regulation troubled the market, as European authorities signalled loss adjusters might be included in the Insurance Mediation Directive. However, following lobbying action, the inclusion of the sector was dropped – a move welcomed by all industry players.

While the question of loss adjusting regulation remains, there have been no lobbying for oversight of the profession, nor has the Financial Conduct Authority hinted it will take on this task.

Meanwhile, although the end of 2012 pointed towards a trend of in-house loss adjusting – after Zurich and NFU Mutual said the appointment of adjusters was no longer making business sense – this failed to materialise in 2013.

Relatively benign weather made loss adjusters worry, and led insurers to review their loss adjusting panels. A new trend emerged following these reviews, as Aviva announced it would drop certain big loss adjusting names in favour of smaller specialist adjusters. As a result, some firms had to let go of a number of employees, causing upset across the market.

However, the St Jude Day storm in October saw demand for loss adjusting services rise – and as 2014 looms closer, the industry is hopeful the gap between supply and demand will even out.

What was the most significant achievement for your business in 2013?
malcolm-hydeMalcolm Hyde, executive director at the Chartered Institute of Loss Adjusters: We have now achieved 400 certificate holders and the number of examinations taken this year by our members is 25 times greater than just four years ago.



phil-mcneilagePhil McNeilage, chief executive of Cunningham Lindsey: Winning a number of new accounts while retaining virtually every piece of business that came up for renewal, and winning two British Insurance Awards in recognition of our innovative IT and new product development.


Crawford & Company UK & Ireland CEO Greg GladwellGreg Gladwell, UK and Ireland CEO at Crawford: We have been actively transforming Crawford throughout 2013 and have received many positive signals from clients, customers, employees and the market that this is making a real difference.



Kieran RigbyKieran Rigby, CEO of GAB Robins: Complete resolution of our pension scheme deficit millstone following a compromise agreement with the trustees and the Pension Protection Fund, which saw all liabilities removed from our companies. From a financial perspective, this has transformed our business and
future outlook.


Chris Hall of QuestgatesChris Hall, managing director of Questgates: We celebrated our 10th year as a limited company; we were successful in bringing a number of new contracts on board in 2013; and we were awarded the highest level – three stars – for our participation in the Investors in Customers programme.
 

If Santa were to bring you one present this year what would it be?

Hyde: It would have to be a new bike that allowed me to cycle to and from work every day instead of the occasional summer’s day.

McNeilage: A happy and healthy Christmas for all of our staff and clients.

Rigby: Probably lots of snow followed by a big thaw with floodwaters.

Hall: A winter with sufficient severe weather to enable loss adjusters to again prove our value to insurers, while neither seriously affecting our clients’ profitability nor the level of insurance premiums. And if Santa is feeling particularly generous, the Premier League title for Liverpool FC.


What was the biggest market disappointment in loss adjusting in 2013?
Gladwell: The reduction in property claims volumes through the summer saw many insurers default to short-term insourcing arrangements, leaving suppliers in all areas of the claims market to deal with 

the consequences.

McNeilage: I can’t think of one. Some may cite the low claims count throughout 2013, which has clearly been good for our clients.

Rigby:
Probably the absence of any major weather event. Consequently, revenues are under pressure. This will lead to significant challenges when the next event arises.

Hall:
It is disappointing that some still focus on the level of the adjuster’s fee while ignoring the level of remuneration received from suppliers. The level of customer dissatisfaction with some supply chains shows the need to ensure they are only used where they add value and that the level of remuneration paid to the company actually doing the work is consistent with treating the customer fairly.


loss-adj-130What was the most important development for loss adjusters in 2013?
Gladwell: There has been a real resurgence in how professional qualifications are valued, and this will be good for the longer-term success of our industry.

Rigby:
The opportunity the Ministry of Justice changes have provided as the demand for fast, targeted fieldwork and inspections has increased. Also, the continued focus on fraud and counter-fraud activities.

Hall:
A number of insurers reviewed their adjuster panels in 2013 and chose to engage with companies because of the depth and quality of their service rather than their size or global reach. The success of the likes of McLarens, Woodgate & Clark and Questgates can only be good for the industry, increasing choice, rewarding innovation and delivery, and encouraging the larger companies to focus on their service offering and delivery rather than size.

Any New Year resolutions?

Hyde: I am planning to do a triathlon, so more swimming, cycling and running.

McNeilage: To stay off the chocolate for a second full year. 

Hall: To learn to accept more quickly that my wife is always correct and not believe that the look on the cat’s face means it sympathises.


What are your main targets and goals for 2014?
Hyde: Continuing to increase our membership benefits to enhance the careers of our members and help them assist those in need of expertise at critical and often crucial times. We have gone live, on time, with our new database. 

McNeilage: We’ll keep our to-do list short, focusing on the areas we have already earmarked for growth – including the specialist London market, commercial motor, corporate and global third-party administration.
Rigby: To enhance the very high levels of investment in developing our people – with both hard and soft skills – as this is the foundation of our business.

Hall: To focus on maintaining our record for retaining existing clients while continuing to grow our client base, services, turnover and profit in a sustainable, manageable manner.


loss-adj-150Who would you choose as the personality of 2013 and why?
Hyde: Our president, Candy Holland. She has a very personable and considered approach to all matters and dedicates her time to helping others to succeed in their chosen career.

McNeilage:
It’s hard to single out an individual. Instead I’d prefer to pay tribute to all our staff for their understanding and loyalty during a period of significant change.

Gladwell:
Allianz claims director Graham Gibson. He has a real commitment to excellence and getting all the basics right. He’s serving Allianz well and sets a great example to all of us.

 

How would you sum up 2013 in a tweet (140 characters)?

Hyde: Challenging but very rewarding seeing the success of our qualification candidates.

Gladwell:
2013 is the catalyst that starts real change in adjusting from which the fittest will survive and thrive.

McNeilage:
One of the quieter claims years, but challenging and ultimately fruitful – as a business, we’ve made good progress. 

Rigby:
Notwithstanding competitive challenges, freedom from the pension deficit has provided us with a bright future and enticing prospects.

Hall:
Questgates completes its first 10 years due to the efforts of our staff and support of our clients. Thank you and here’s to the next 10.


Are we likely to see a trend of in-house claims handling in the coming year as commentators have anticipated?
McNeilage: I don’t believe there will be any material change in 2014. Demand for our services remains very strong, especially in higher-value and specialist areas.

Gladwell: There is more ebb and flow in the market than ever before as different pressures influence the insurer, broker and adjuster sectors.

Rigby: We have seen insurers retaining a greater proportion of cases in-house when benign claims conditions prevail, in order to absorb their own capacity. But we have not witnessed any universal shift of strategy across the market.

Hall: The ability of in-house supply chain managers, direct contractor networks and the harnessing of technology will continue to drive insurers to handle more claims in-house, until there is a better option. However, this is no different from any other industry or time, and it is up to us to adapt and show that we can add value, as we have repeatedly in the past.


How much of an impact did the St Jude storm have on the insurance industry?
Hall: While it did increase the volume of claims instructed to loss adjusters, these were capable of being handled by existing resources. The cost and disturbance to the industry was not significant.

Rigby: Very little. It was a very high-profile media event, heightened by widespread transport disruptions and sad fatalities, but it was not of great significance in overall insurance terms.

Gladwell: The industry took this in its stride well. It is always good to test the surge plans to ensure that when a major catastrophe occurs we are well placed to respond with the professionalism that is at the heart of adjusting.

Loss adjusting timeline 2013

30 January: SSL Claims launches video capability so surveyors can stream claims visits online. The Northampton-based firm also becomes the first loss adjuster to join the Chartered Institute of Building (25 February)

21 February:
Chartered Institute of Loss Adjusters representatives travel to Brussels to voice concerns about the inclusion of loss adjusters in the Insurance Mediation Directive

4 March:
Towergate signs white label deal with Lorega for loss recovery products

22 April:
Legal & General drops GAB Robins from claims pilot, keeping Cunningham Lindsey and LAS

30 April:
Redundancies at Crawford & Company after loss of position on part of Ecclesiastical’s loss adjuster panel and end of deal with Lloyds Banking Group

30 April: Direct Line axes GAB Robins from its personal property panel following review

13 May:
Questgates strikes partnership with Sterling Insurance to act as its liability claims department

15 May
: The British Insurance Brokers’ Association, the Association of  British Insurers, CILA, brokers and insurers start a new claims working group that aims to proactively and positively engage with the Financial Conduct Authority’s thematic claims review

28 May:
Loss adjusting is dropped from the second draft of the EU’s Insurance Mediation Directive, a move welcomed by the European Federation of Loss Adjusting Experts

17 June:
Former Cunningham Lindsey client director David Walker joins McLarens as executive director

28 June:
McLarens recruits Richard Keegan as an executive accountant/adjuster from Crawford & Company

5 July:
McLarens merges with farming claims specialist Agrical for an undisclosed sum

19 July:
Aviva reduces the role of Cunningham Lindsey and Crawford on its commercial and specialist property panels and gravitates towards “smaller specialist loss adjusters”

25 July:
Dan Saulter, former mergers and acquisitions director at Towergate, becomes Davies chief executive

27 August:
Rumours mount over Davies and Garwyn acquisition

3 September:
Biba appoints Questgates to manage its valuation facility

5 September:
Specialist loss adjuster Questgates backs a study from the CILA that reveals demand for an industry-wide fraud qualification

19 September:
GAB Robins receives more than 150 applications for the three available places on its graduate development programme

30 September:
Cunningham Lindsey chairman Gerry Loughney announces his retirement after 43 years with the loss adjuster

2 October:
Cunningham Lindsey UK implements an initiative requiring all investigations staff in its services team to obtain an advanced professional certificate in investigative practice

2 October:
McLarens appoints Graham Smart to the newly created role of managing director for Europe as Trevor Latimer becomes non-executive director

16 October:
Loss adjusters and risk managers call on insurers to extend policy wordings and coverage for non-physical damage in business interruption insurance

6 November:
Cunningham Lindsey’s director of London markets, Neil Ventris, leaves the adjuster “by mutual consent” after five months in the role

13 November:
Former Davies CEO Charles Crawford launches his own consultancy firm

14 November:
Broker Network signs a three-year claims support service deal with Lorega

This article was published in the 5 December 2013 issue of Post magazine 

  • LinkedIn  
  • Save this article
  • Print this page  

You need to sign in to use this feature. If you don’t have an Insurance Post account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: