Loss adjusting - response to the floods - Come hell or high water

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While many people were leaving flood-hit areas as fast as their legs, or boats, could carry them, it was the job of loss adjusters to get their wellies on and start dealing with the aftermath. Rachel Gordon reports on how they fared

The recent floods have caused misery for many thousands of people. And it has not been a picnic for loss adjusters either. Adjusters have been faced with hugely pressurised schedules, mucky surroundings and having to relay grim news about properties taking months to dry out.

Dealing with the Hull claims sounds the most pleasant. One adjuster said: "The people are lovely. They have a Blitz spirit, they appreciate what you're doing and think about their neighbours. It's a community. But I've heard from colleagues in parts of Gloucestershire that everyone there just thinks of themselves."

Les Wright, a partner with Davies Group, comments: "We had a disaster plan in place, which was enormously helpful, but there were times when we felt almost at breaking point and it was frustrating not being able to get into some of the areas."

He emphasises adjusters had to keep on top of things. "You are there in a project manager's role. That means working with restoration companies, which are also under pressure, and trying to get in repairers. A lot of these claims are going to be long haul. But, already we have letters in from customers who are pleased with what we've done."

With at least 45,000 household and 14,500 commercial claims together with a bill to the insurance industry of around £3bn, the floods have had an unprecedented impact. There were two main incidents, the first from 25 June when Hull and much of South Yorkshire was affected, and the second from 20 July where parts of the Midlands to the Thames Valley were flooded.

There has been anger at water companies that rake in huge profits, yet are responsible for ineffective drains. Many have called for the government to spend more on flood defences. There has also been the odd rumbling about slow responses and payouts from insurers.

But, considering the scale of the flooding, it certainly appears that there is no overwhelming discontent at the performance of the insurance industry or, indeed, towards its front-line representatives, loss adjusters. Adjusters, it appears, have been grafting and ways to cope with the volume have included: redeploying adjusters from areas such as Scotland and the south east; using people with adjusting qualifications, but who were not field staff to switch roles; bringing in adjusters from overseas; using contract adjusters; contacting recently retired adjusters to rejoin on a temporary basis; working extended hours - often 12 to 15 hour days and weekends; and employees postponing holidays.

Most firms have said it has been unbelievably demanding and certainly many adjusters are still working incredibly hard as thousands of claims are still being settled.

High expectations

Most emphasise a key part of their work is to manage expectations. Along with a shortage of adjusters, damage management companies have been swamped with work, as have many building firms and trades people. Kevin Larman, director of client relationships for Cunningham Lindsey, says: "In many cases these are long-term claims and there is no quick fix. You can get repairs done, but you still have to wait for the property to dry out. It is vital to communicate what is happening and we are holding community meetings in the areas affected to keep everyone informed."

A claim often levelled at adjusters is that they are pressurised to achieve the lowest settlement and process jobs as quickly as possible, but in the case of these floods, it appears plenty went the extra mile. For example, Garry Lloyd, director of customer services for AMG, comments: "One of the main things is to be visible. We provided an information sheet as quickly as possible for everyone with a claim and set up a flood helpline. It's about letting someone know what is going on, not just going in and then leaving them for eight weeks."

He says little touches made a difference: "When we sent our adjusters out, their cars were loaded up with chocolate, biscuits and bottles of water. Now it's about keeping the tempo going."

Meanwhile, Vic Noble, Crawford's UK property operations national customer services manager, says just the first incidence of flooding would have been a challenge, but following one after the other, the two caused a huge pressure on resources. "There were shortages of drying out machines, a major retailer ran out of sofas and there were difficulties sourcing caravans. We had people who had not been out in the field for years pitching in. It was a question of everyone rolling up their sleeves and getting on with it."

A different approach

Royal and Sun Alliance has a different stance to many other insurers in the market in that it has its own in-house adjusting team. Craig Monks, national events co-ordinator, says this worked well: "It was a hell of a logistical experience to get people moving round the country, to get them into hotels while some arranged to stay with friends. We'd got a disaster plan ready and were contacting people in advance, and although we had a few cases of bringing in external resources, we predominantly handled claims with our own people."

He explains that RSA has a group of people designated as 'storm troopers' who, in the event of weather emergencies, switch roles to manning helplines: "We've had people working 50 days without a break, although there is a lot of support here. People have wanted to do all they can."

Mike Jones, chief operating officer for GAB Robins, says the early days involved adjusters making triage calls to ascertain those most in needs. "Information was fed through from insurers and brokers, and this allowed adjusters to target vulnerable people first, such as the elderly, the disabled and those with young children. These floods required us to suddenly double capacity, but the response from everyone was fantastic."

Because of the raft of household claims, it is clear many adjusters who would normally specialise in more complex claims were dealing with flooded homes. But, there were also plenty of substantial commercial claims to keep them busy. Graham Smart, executive director at MYI, comments: "There was a lot of prioritising in commercial claims too. In the case of those that were more complex we also had a lot of calls from brokers who wanted to make sure their clients received a more personalised service." He says morale remained high, although the fact MYI is owned by employees was a help in motivating everyone.

Teceris is also a commercial specialist and its head of operations, Simon Kay, says: "Adjusters are used to moving quickly and with technology you can be set up to work in any location. We found people volunteering without being asked to rearrange their holidays and looking to get businesses back in production as soon as they could - with commercial claims it is also often vital to sort out interim payments for damaged equipment."

Environmental impact

One area of specialism of adjuster Questgates is environmental claims. Managing director Chris Hall explains they could help businesses deal with the authorities: "You had the Environment Agency telling businesses such as fast food outlets to close because of the risk of E-Coli, but in some cases we were able to get in quickly, do swab tests, and let the agency know there was no contamination - and prevent the business from closing."

He says this type of work led to some insurers phoning Questgates on spec, because their existing panel was less experienced. "We wanted to help out, it was all about pulling together."

There is no doubt many employees worked exceptionally hard to assist claimants. But, with the waters now subsided and many sums agreed for claims payments, what will happen if there is an even bigger flooding disaster? Simon How, director of Pricewaterhouse Coopers, says the industry needs to think hard and fast.

In terms of future planning, he says the key issues are funding for adjusting services and how to build capacity for extreme events.

As for primacy, Mr How says to be assured of this, some insurers may copy RSA and take on in-house teams, even though this can push up overheads.

The US has more severe weather incidents, with the major adjusters offering expertise in catastrophe planning having teams ready to travel to affected areas. Mr How points out the floods in Yorkshire were not on flood plains, meaning these can hit anywhere. "Do insurers need to create incident management services similar to those adopted in the wake of the hurricanes," he asks?

Many adjusters are still working seven days a week - and are doing so without complaining. But, they can only do so much. Simon Gifford, claims director for Towergate, points out: "There are only a finite number of Chartered Institute of Loss Adjusters qualified adjusters. We find loss recovery insurance has been a massive help for some of our policyholders."

Working together

He explains the product involves a loss adjuster working on behalf of the claimant: "For small to medium-sized enterprise policyholders it's meant someone qualified, but often from a small independent firm, has been there quickly to act on their behalf. If they'd been reliant on a panel adjuster, the service would not have been as good."

He agrees primacy can cause problems: "If an adjuster has a call from us and a major composite calls, the big volume claim composite will have more clout - but that is why we think brokers should recommend loss recovery insurance."

Over the past 10 years or so, procurement managers within insurers have sought to cut their adjusting bills and some pundits say domestic claims are barely profitable. Adjusters may make some income from having a repairer network but, increasingly, insurers are looking to operate their own networks and so this too reduces adjusters' income.

There have been sweeping redundancies and consolidation within the sector and bringing in adjusters from overseas - while positive for claimants - suggests more homegrown professionals are needed. Longer term, the increasing likelihood of UK weather catastrophes may be positive for the adjusting sector.

Mr Noble concludes: "For many policyholders, Christmas is the time when they want to be back in their homes, and it has become a goal for many of us too. We're really pushing for it."

PRIMACY - WHO COMES FIRST?

The whole issue of primacy - an arrangement where an adjuster agrees to see a certain insurer's clients first - is a sensitive one. So, it is somewhat refreshing when insurers take a straightforward stance. Stuart Payne, UK and Ireland property claims manager for Chubb, says: "We'd been preparing for the floods and worked closely with brokers. We had high net worth and commercial claims so were fortunate in that we did not feel over stretched and were able to arrange personal visits and for restoration companies to be there promptly." Mr Payne says Chubb pays "an appropriate rate" for its adjusters and damage management companies. Insurers have been hammering down adjusters' fees for years, leading to greater reliance on automation and less personal service. Unfortunately, not everyone can afford a Chubb policy, but the old adage that you get what you pay for applies in insurance, as everywhere else.


OVERSEAS SUPPORT

Cunningham Lindsey and Crawford both brought in overseas adjusters. The numbers were not large - it is believed they numbered fewer than 60 in total. They came from the US, Netherlands, Denmark, South Africa, France and Germany. Kevin Larman, director of client relationships for Cunningham Lindsey, says they were all seasoned professionals and fitted in well, with some simple briefing on deductibles needed.

Vic Noble, Crawford's UK property operations national customer services manager, says he was pleased the Foreign Office was able to approve visas quickly and adds UK staff worked fast to ensure overseas colleagues settled in. "Apart from hotels, they organised cars - people in the US, for example, mainly drive automatics. We also ensured everyone had sat nav."

The adjusters all had a thorough induction and contact with senior UK adjusters, but not everyone is in favour of this method of support. Garry Lloyd, director of customer services for AMG, comments: "We were wary with overseas recruitment that we would have to take responsibility for." Simon Kay, head of operations for Teceris, adds: "It is not just language. We have different regulations." And, Mike Jones, chief operating officer for GAB Robins, says bringing in overseas adjusters was on the cards, but ultimately it was decided sufficient UK resources could be found, which was more cost effective for GAB.

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