Just who are you calling a loss adjuster?

The loss adjusting sector is evolving fast. Private equity firms are circling, looking for investment opportunities, while individual firms are under increasing pressure to develop from ever more sophisticated and discerning clients.

Loss adjusters no longer see themselves as loss adjusters, but as claims solutions service providers.

“Many loss adjusting businesses have gone far beyond traditional roles and become broad based providers,” says Phil McNeilage UK chief executive of Cunningham Lindsey. “Loss adjusters are evolving at a faster pace as clients are evolving at a faster pace.”

The market leaders, Cunningham Lindsey and Crawford & Co, are pushing ahead looking for new markets and new services, investing heavily in technology and processes.

Crawford, for instance, recently rolled out a service for dealing with catastrophic claims, while Cunningham Lindsey is targeting London market business as a key area for growth. It is also developing its buildings claims service.

Meanwhile, others are in the process of modernising their businesses in order to position themselves for the next stages of growth.

AMG’s new chief executive Richard Webster has a brief to restructure the group into a scaleable business, integrating its disparate companies and changing the culture. “We don’t want to be biggest; we are not driven to be the lowest cost operation. We want to be able to offer that personal touch, which is important,” says Webster.

And Davies Group, the fourth largest loss adjuster, has completed a £27m management buy-out that will modernise its business structure.

Investing in new technology is also recognised as playing a key part in growth, with adjusting companies looking at new ways to handle the claims and interact with the customer.

Ian Muress, recently promoted chief executive of Crawford’s UK, Europe, Middle East, Asia and Pacific business, says: “The idea of dealing with an insurance claim based on filling in a paper form will be anathema in the future.”

There is talk too of consolidation in the loss adjusting sector, in the wake of acquisitions within the wider insurance market, but so far, with the exception of AMG’s acquisitions of Carr Greenwood Smith and Sigma, there has been little movement.

Kieran Rigby, chief executive of GAB Robins UK, says consolidation is likely to occur among the smaller loss adjusting companies.

“Consolidation among the larger loss adjusting firms is difficult to envisage because the panels are selected by the clients,” he says.

Insurers are unlikely to support a move that would concentrate power in the hands of fewer service providers, he argues.

But he adds that insurers’ panel selections have a major impact on the sustainability of a loss adjusting company and that the sector is likely to see more consolidation among the smaller niche firms, which have difficulty affording the latest technology and electronic claims systems.