Loss adjuster GAB Robins has done a lot of soul searching in the last year. Now managing director Derek Coles is ready to talk about the future. Andy Cook reports
It is now eight months since Derek Coles joined GAB Robins as managing director of loss adjustingfrom Barclays' insurance business . He walked into a business set for massive change. New chief executive John Castagno had taken over from Clive Nicholls. And after his initial review period, Castagno closed offices in Carlisle, Ayr, Edinburgh, Bradford, Guildford, North London and Birmingham.He also set about reducing the number of full-time-equivalent staff to 750 in the UK from 800 to 750.A number of high profile managers had followed Nicholls out of the door, including Benedict Burke, John Heaney and Jeff Stagg. And more recently one of GAB Robin's prominent faces in the London market, James Peace, joined Royal & SunAlliance (R&SA).The business faced a huge challenge. Due to good weather, the number of claims in personal lines was low - very low. So loss adjusters found themselves overstaffed. Also insurers caught on to supply chain management. Where loss adjusters once controlled the industry's massive spend on brown and white goods, insurers appointed their own supply chain managers. Aviva even went as far as boasting about the procurement savings of Norwich Union in last week's annual report. And as if that wasn't enough, insurers even applied competitive tendering to their loss adjusters, which saw rates slashed in reverse auctions.
Where now?So how will Coles lead loss adjusting into profitable pastures? Coles seems caught between the excitement of telling me all of his ideas, while not giving too much away. And just in case enthusiasm gets the better of him, a press officer sits alongside, occasionally offering "guidance".As reported last week, GAB Robins has chosen seven areas of loss adjusting that promise profitable growth. These include creditor, legal expenses, employment protection and liability. "Creditor is a growing market. It is not adequately served at the moment. The success of a pilot that we have with Pinnacle is proving that," says Coles. "Pinnacle used to have door knocking service. What we are offering is something far more investigative," he says.Are special skills required in the market? "Most of it is good old investigation. We did evaluate our resources. We have talented investigators who hadn't been pointed at new markets. "As leaders and managers we are providing opportunities for them," says Coles.The market seems ripe. "When I look at the banks with large creditor books and peoples' personal gearing at the levels they are, with rates set to tip up, you would think that there would be a high claims instance," says Coles.In liability, the opportunities seem far less clear. "There are niche players in liability, but in a national adjusting perspective we're not sure that anyone has got it right yet. So we have a chance," he says.
Protect strategyWhile there are new lines of business to pursue, GAB Robins will not abandon property and motor personal lines, claims Coles. "We don't want to be nickled and dimed in tender situations anymore. So that's where our protect strategy comes in. "Take AXA. We have retained that relationship and now we want to grow that business in areas which could be new, but ultimately deepen our relationship."We can't manufacture claim, but we can advise on risk, on claims process, work with them on smarter operations. If we can help take out indemnity spend that's where we add value - not in being paid £70 or whatever per claim."Another response to the challenge of making money from personal lines motor and property markets is for GAB Robins to seek new relationships with affinity groups, says Coles. The loss adjuster already works with Aon, Marsh, JLT and Willis, cutting in where the big brokers' own risk services teams feel the need for help. But Coles is thinking of non-broker intermediaries such as banks, utilities and retailers. "Clients don't have to take all of their services from one source," he says. He goes on to explain that Barclays, which was an intermediary of Legal & General (Castagno's former business) chose the "adjusting partners" as part of managing its reputational risk.Another part of the personal lines play is finding a niche. For instance, Coles is looking at providing specialist services for motorcycle accounts, where major motor deals are really coping mainly with cars.
