Loss adjusters...an endangered species?

There are a growing number of voices expressing concern about what is being allowed to happen to the loss adjusting profession in the UK. Over the last 15 years adjusters’ ability to provide high levels of service has gradually been eroded and the situation is fast reaching crisis point.

Because some insurers have systematically driven adjusting fees down and down there is a real danger in the next ten years that chartered loss adjusters could be extinct. With the average age of a chartered adjuster now around 50, and with only minimal numbers of new adjusters qualifying yearly, the demographic time bomb is ticking.

This is lamentable – not just for the loss adjusting fraternity – but for the industry as a whole. Looking back ten or twelve years, more trust was being delivered to insurance clients by having truly independent adjusters involved in claims. Then they were better paid and were able to give a decent level of customer service. Today they simply do not get paid enough to deliver that kind of service and really advocate for the broker and their clients. There is now a huge gap and brokers are trying to plug it – but most simply do not have the time or the expertise to do that.

Undoubtedly the tremendous cost pressures insurers’ face is a big part of the problem. However, it is also because some insurers simply will not wake up to the fact that their service is poor. There are too many heads in the sand at too many major insurers.

It is ironic in these times of TCF that in the claims world we were probably closer to TCF ten years ago than we are now. I find it extraordinary that we have allowed customer advocacy – previously the backbone of our adjusting profession – to be all but wiped out.

More and more we see ‘Claims Technicians’ arriving on site rather than adjusters. With limited authority and minimal experience this is often a recipe for claims to drag on way longer than they should and a slow claim can spell a slow death for a business.

Surprisingly, despite this service breakdown, there is a rose-tinted view in some corners of the industry of how well we perform with claims. For example, we collectively patted ourselves on the back following the floods of 2007 but in reality the industry was stretched to breaking point. Statistically every day’s delay in getting to the site can add a week to a business interruption claim and some insurers took weeks to get round to visiting clients.

The reality for insurers contending with legacy expense issues and a deeply competitive market may mean their aspirations are reduced to a plain vanilla claims service. No wonder the public perception of our industry is so poor, they have every right to be disappointed if that is as good as it gets.

However, some of the newer, lesser built insurers may be able to strike more of a balance between returning a decent dividend to shareholders and simultaneously delivering a good claims service to policyholders.

Those that provide a price and service balance will soon begin to take market share from the established insurers; in fact, anecdotally, there are indications that large players are already loosing market share to these nimble insurers that can offer a good service.

I hope this development occurs with sufficient pace to preserve loss adjusters who are the custodians of great service and fair claims settlements. I am sure that those of us in insurance, if we are being really honest, would agree that an insurance industry without loss adjusters would be a sad place to be.