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 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 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.
Greg 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 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
Chris 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.
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
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.
What 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.
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.
Who 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.
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.
This article was published in the 5 December 2013 issue of Post magazine
- Zurich settles two claims from Westminster terror attacks
- ERS owners explore potential sale
- Amanda Blanc makes first appearance as ABI chair
- Over 20 start-ups pledge support for proposed insurtech trade body
- Co-op hits out at software viability in IBM legal dispute
- CBL broker EISL stages management buyout
- Insurance firm director jailed for 31 false claims and Manchester Arena terror attack fraud