Loss leader

Nine months into the job at Davies, is it what you expected? How does it differ from an insurer role, and have you been able to bring your experience of the ‘other side’ to bear on insurer relations?

The business is as expected, and I have been really impressed with the quality of our staff and their determination to drive the business forward – this was really illustrated with the bad weather back in January, when people strived to get out to see customers and get into the office.

The principles are similar between my role at RBS Insurance and this one: look after your customers, have a great delivery team and make sure that the right processes are being followed. Then the shareholders will look after themselves.

But it is insurance, so it’s unpredictable and often driven by the weather !

Given the relatively small field, how do you feel a loss adjuster can stand out from the crowd? How has the profession changed over the past decade?

Firms like ours need to be able to deliver a service that cannot be easily matched by insurers; be it through the level of technical skill, the ability to train and develop people, or deploy them effectively in the field while delivering the right level of indemnity spend.

Having not been in the claims sector 10 years ago, it’s hard for me to comment on how it has changed, but I sense that the sector is more competitive, and greater pressure exists to both deliver the right claims indemnity spend and be able to prove it.

Is the sector ripe for further consolidation? What role might Davies expect to play in this?

Consolidation is inevitable; larger businesses should be more effective as costs are spread over a larger base and, for a business with a field force like we have, there are less ‘road miles’ driven and staff are more effective.

I believe that insurers are looking for a clear and credible alternative to the largest two organisations in the property claims sector, and we firmly intend to fill that space – competition is always healthy.

We will both look at and search out opportunities, but they must have the right fit with us strategically, culturally and customer-wise, with the right financial payback.

What are your plans to develop the company in the short and medium term? What does success look like for you personally?

We plan to grow, both organically with our existing and new customers, together with any acquisitions that make sense. We have done that successfully over recent years and will continue to do so.

Success to me is a number of things: being automatically considered for all relevant tender opportunities; being viewed as market leaders in our chosen sectors; being seen in the round as a clear alternative to the two largest players (by size); being regarded as people who can create and deliver innovative solutions; and being a great place to work where staff want to stay with us and encourage friends or others in the market to join us.

How has the recession affected loss adjusting in general, and Davies in particular?

It has made business more competitive, and we have seen procurement functions grow in importance, although I am not entirely convinced that they and their claims department or senior management colleagues are always seeking the same thing. We have seen the increased need to be able to identify and mitigate customer and supplier fraud.

Do you expect private equity to continue to play a role? And what, if any, are the affects of having private equity backers?

Yes, both for us and others in our sector. Ownership by Lloyds Development Capital has allowed Davies to grow, invest in IT, people and infrastructure. It has also given the business the wisdom and counsel that having a quality chairman and non-executive director bring. They provide real value, support and challenge to us as a business and me as its leader.

It’s nearly six months since the Cumbrian floods. What lessons has the industry learned, and is it ready for the next major event? What do all parties need to do?

Cumbria was nothing like the scale of the 2007 floods, although it is always devastating to see homes and businesses destroyed the way that they were.

The floods showed the importance of co-ordination between adjusters, disaster restoration providers, surveyors and building contractors, at the very early stages when direction on a claim is being set. Our solution is to bring all these parties together as fast as possible.

Insurers and loss adjusters worked closely at the time and have worked closely since to share experiences and to ensure that the next time this happens, the service delivered can be better than the last. I wasn’t in the industry in 2007, but I think that the sharing of experiences after that helped to better prepare all concerned for the flooding seen in Cumbria last year.

Where do you stand on loss assessors – are they a help or a hindrance to the claims process?

On the whole, I don’t think that assessors have much of a role to play in most of the cases that we deal with, and we rarely see them.

Our clients expect us to work hard and to look after the interests of their customers and, in most cases, it’s difficult to see how that is made better by an assessor.

There may be some cases where they can assist, particularly if the customer does not have the time to devote to the claim or is away for long periods.

What would your advice be to the current management of RBSI?

Paul Geddes has built a largely different top team to the one that was there when I left, and it appears a strong one.

It’s certainly not for me to give them advice, but I sense that they have a clarity of purpose while at the same time battling against the challenge of rampant motor claims inflation, so evident in their recent results for last year with the sharp fall away of profit.

I do look back at my time at NIG with a sense of nostalgia, and was somewhat amused to see recently that NIG set out similar ambitions for SME growth that were seen previously in the Carrier, Earle, Bunker, Crawford, Rea and Cornish eras. Let’s hope they achieve it this time! IT

Charles Crawford is chief executive of loss adjuster Davies Group.