The missing link

It’s never been more important for brokers to demonstrate the value of their services to clients. But, for some reason, they sometimes overlook the claims side of things – a client’s biggest hour of need. If you really want to impress policyholders, reassert yourself as their best port of call in this regard.

Biba is so taken with this idea that it has invited Angus Tucker, president of the Chartered Institute of Loss Adjusters (Cila), to speak at its conference on exactly this subject. It’s an area most relevant for medium to large commercial claims, where there can be substantial losses from property damage and business interruption.

“These days, most commercial entities work on fairly tight margins; they don’t have staff sitting around,” says Tucker, who also works as a director at financial and business adviser Grant Thornton. “Following a major disaster, it’s very, very rare that you’ll get an absolute loss of a building or operation, so the rest of the business will still be operating, and management and staff will still have their day jobs.

“They’ll also be occupied trying to recover business from the disaster, protecting their client base in case competitors try to woo them. So they’re already doing two full-time jobs, and then they’ve got to do all the onerous data mining to put the claim together.”

Call the experts

This is where brokers can shine. When a claim occurs, the broker is already the first person a client calls. But they’re not necessarily the best person to help them, Tucker believes. “Brokers can provide a lot of support but they are experts in insurance broking, not insurance claims. These are two very separate disciplines.” In Europe, he adds, loss adjusters are known as “claims experts”.

Insurers typically appoint a loss adjuster to confirm whether there is a valid claim and determine how much it is worth. But the insured remains responsible for putting the claim together, which is often an arduous and complex job. The broker can help by stepping in and appointing a second loss adjuster who works strictly for the client.

“They [the second loss adjuster] can identify and source all the documents – effectively becoming the claims department of the broker’s client,” Tucker says. “The insured is still doing + two days work in one, but this takes the third away. It’s a huge logistical effort, even if there’s no dispute. But the loss adjuster will know how the policy requires the claim to be represented and what’s needed to support it, and they can do it far quicker.”

In some cases, a claim that might take two years to settle could be dealt with in 14 months, he suggests. “Someone working with the insured can identify problems early on, before they become major issues six months down the line. It’s also about managing the client’s expectations. The loss adjuster can identify very early on what the policy covers.”

Meanwhile, the big accountancy firms have long been offering claims preparation services to their audit clients. Then, a few years ago, the big three brokers, Marsh, Aon and Willis, set up dedicated in-house departments to gain some of this territory. Smaller brokers may not have the resources to employ an in-house team, but they could still join forces with a local independent firm to offer the service to clients.

Get in on the act

Neil Greaves is a chartered loss adjuster and UK practice leader for Marsh’s forensic accounting and claims services team (FACS). After 20 years working on major losses for various practices, he joined PricewaterhouseCoopers in 2001 and then in 2005, moved with three colleagues to Marsh to set up the FACS team.

“When one of PwC’s clients has an insurance claim, they would probably tell the audit partner they needed to make a provision in their accounts. At that stage, [the audit partner] could say, ‘PwC has a team to help you prepare that claim’.”

Marsh decided this was something it should offer its clients. “A lot of managing claims is paper-pushing,” Greaves says. “Brokers don’t need to get involved in unnecessary admin or nodding at meetings. We wanted to be involved in the claims process in a way that can actually add value, engaged at the coal face with clients helping to prepare the claim. If they need forensic accountants to pull out numbers to compile a business interruption claim, we’ve got that. If they need building expertise to get a quote for rebuilding their building, we have that too.”

Accountants may have spotted the opportunity first, he says, but claims preparation should be an intrinsic part of the service a broker offers. “If you’ve got an expert risk adviser who arranges your insurance contract for you, it seems to be completely rational to expect that risk adviser to stand side by side with you when you have a major loss, not to send you down the road to PwC or Deloitte or KPMG,” Greaves argues. “It should be a core offering for brokers.”

Added value

The UK takes a different stance on claims preparation services to most of the rest of the world. Here, clients pay a fee for the service when the claim occurs. But elsewhere in Europe, the US, Australia and the Far East, a small amount is added on to the premium when the policy is taken out to pay the costs of a claim.

For Greaves, this makes sense. “If it’s a cost that the client wouldn’t have incurred if the claim hadn’t happened, why shouldn’t it be recoverable? In comparison to multimillion pound loss, it’s negligible. It should always be an option.”

When Greaves pushes the issue with insurers, he finds the reaction mixed – some fear, he concedes, that including the charge within premiums will open the floodgates and lead to extra services on every claim where they’re not needed. “It all comes down to value. On claims of £5,000, frankly we won’t add any value as a broker, and I don’t think we need to get involved if the client is being looked after by a competent loss adjuster.”

On the whole, though, Greaves finds that the working relationship between brokers and adjusters who are working for insurers can be constructive. “I like to think most adjusters on major claims see this as a positive, and would recognise there’s a value in having somebody help the policyholder prepare the claim in a professional way, and a way they can understand, whether that support comes from their accountant or broker,” he remarks. “They may not agree with everything in the claim, but at least they can understand it.”