Industry couldn’t survive a surge event - Ex-CILA president

Lorega Solutions’ managing director, Angus Tucker believes that the loss adjusting industry could not cope with the demand of a national surge event.

Speaking exclusively to Insurance Times, the former Chartered Institute of Loss Adjusters (CILA) president said that the UK hadn’t seen a nationwide surge event for many years and that it is an inevitability.

“If we had a huge, nationwide surge event that caused a massive number of claims, I don’t think the loss adjusting profession could handle it.”

Despite flooding and the Beast from the East, Tucker says loss adjusters have had a very quiet 18 months.

“The Beast from the East was a localised event. That didn’t produce the massive numbers on an ongoing basis that you get from events such as in 1987 and1990 when we had two nationwide hurricanes.

“At my old company, we would have got 60-70 claims per week. The week after the hurricane hit, we had 1200 claims, and we didn’t drop back down to our normal rate until the following year.”

“When we had the flooding in 2013, that was probably the closest we have come to the level we are talking about. But that was only three or four days of flooding then it subsided, so even then that wasn’t really close.”

Tucker then stated that such an event is inescapable.

“With the weather patterns the way they are, such an event is inevitable.”

A demographic timebomb

Tucker explained that four or five years ago, there was a growing concern among the loss adjusting profession as to the demographic timebomb, where no one was replacing the retiring adjusters. But now, he said more and more young people are taking the exams and passing.

“There is such thing as a 25-year-old loss adjuster, but no such thing as a 25-year-old chartered loss adjuster.

”There was a real concern with a demographic timebomb. People were retiring and there was no one coming in and replacing them. There was a concern as to where the industry would be in five or ten years time.

“Now, in the past couple of years, there has been a real positive progression in the number of people taking the exams and passing. It has increased 50% or maybe even 100% in the past few years.

“The larger loss adjusting firms have their own graduate schemes, which have proved to be very successful.

“So the profession is building back up again, but still I don’t think it could cope.”

How will adjusters cope?

Tucker says adjusters will work flat out but it will still not be enough because of the reduction in technical expertise in adjuster used by insurers.

“Insurers want to lower the cost of claims so the expertise of the adjusters they use is less. Not all insurers use chartered adjusters.

“They are just lucky that there hasn’t been a surge event like that because I am sure they wouldn’t have been able to cope.”