United front

When Nick Patterson, commercial director of specialist loss adjuster Garwyn, joined the industry nearly a quarter of a century ago, relations between brokers and loss adjusters were “almost non-existent”, he recalls. “Brokers were often seen as an impediment or even an obstacle to getting a claim settled as equably as possible.”

Things have changed. As Patterson says: “The broker/loss adjuster relationship is now of critical importance.

In fact, when Garwyn won last year’s Insurance Times Loss Adjuster of the Year award, it was predominantly in recognition of its work with brokers. In one case, working closely with the broker, the firm came up with a solution to problems with a client’s book, which was being hammered by frequent employer liability claims, rising premiums and a large excess. “The broker was saying to us that there had to be another way and we were able to come up with a direct claimant practice, which in turn led to much reduced premiums,” Patterson says.

Crucial connection

Garwyn’s experience is far from uncommon. As Chartered Institute of Loss Adjusters executive director Malcolm Hyde points out: “The broker relationship is very important. The worst thing that can happen is not getting on with the broker.”

Over the past couple of years, there has been a clear trend towards brokers and loss adjusters working more closely together, agrees Bobby Gracey, business development director at loss adjuster Crawford & Company. “Historically, loss adjusters’ services have been secured by insurers, not brokers. But now it makes much more sense for loss adjusters to be aligned more closely to the needs of brokers. Brokers want a safe pair of hands because this is increasingly an issue of client retention and risk,” he says.

Client expectation is an important factor, particularly in terms of managing situations when a settlement ends up being worth less than the broker’s customer desires.

Lorega Solutions operations director Angus Tucker says: “In days gone by, you just went to the broker to purchase a policy and that was it. But people’s expectations have grown. They expect more in the way of value for money, so they expect far more from their broker than just setting up a private insurance policy. They expect active involvement in claims support,” he says.

When working for a large insurance company, the chances are the loss adjuster will be appointed by a panel, which makes it harder to build a trusted, longer-term relationship. Nevertheless, it can still be helpful for adjusters and brokers to work together.

“It makes life much easier if the broker is there. If there is a sticking point in the claim, it is often much easier for them to iron it out,” loss adjuster Carmichaels director Graham Eades says.

Building the relationship

So, how should this relationship be built and how can loss adjusters enhance a broker’s offering to the market? Tucker believes the first element is simply for both sides to identify and be clear about what their role and involvement will be.

“Depending on how the policy has been set up, the broker may be acting as an agent for the insured or the insurer. The broker will have different duties depending on who their client is. The broker can perform a variety of roles, as can the loss adjuster, so the relationship is going to be dictated by who is wearing which hats,” he says.

Crawford & Company offers a dedicated broker hub – another increasingly popular add-on with loss adjusters. In its case, this is called Brokercare, through which brokers can instruct Crawford directly, access dedicated relationship managers and log into their IT system to see how or at what stage a claim is being handled.

“If the claim is going to be less than expected, we can share that with the broker, who has that trust and relationship with the client and so can explain that bad news to the insured party themselves,” Crawford’s Brokercare account manager, Jason Jones, says.

Gracey agrees with this. “It is about ensuring that there is better communication, better understanding that the right decision has been made, and improving an area that historically has been very difficult.”

This closer relationship is becoming especially important within commercial lines, adds loss adjuster GAB Robins’ sales manager, David Harrington. In May, the firm launched a suite of broker services under the banner EYE Claims, to help intermediaries work more efficiently and enhance the standard of its claims services.

For example, it provides brokers with remote access to their claim files – subject, of course, to the insurer’s approval. Brokers can see photographs taken on site or upload documents straight into the file. Similarly, if a policyholder phones a broker, the broker can then access the information themselves while on the phone. This means there is less delay, and certainly much less to-ing and fro-ing between adjuster, broker and policyholder.

Understanding each other

Adjusters can help too by training a broker’s junior claims handlers – perhaps by taking them out of the office and on site. This means, as Harrington puts it, “they will get the smell of smoke from a fire or see the devastation of flooding”.

Similarly, when there is a nominated account via a broker, in the case particularly of larger risks, the adjuster can familiarise themselves with any risk prior to losses occurring.

“Commercial lines policies in particular rely on expertise and knowledge when handling these claims,” Harrington says. “Bringing that personal relationship between adjuster and broker helps with complicated claims and provides for greater and improved dialogue and faster communication.”

He adds: “Commercial losses require prompt attention, particularly in trying to bring businesses back to trading as quickly as possible to reduce loss of profit and so on. Having an adjuster that the broker trusts means they are more likely to pick up the phone and talk through a particular point in a relaxed, professional manner.”

“Settlement of a claim is a tangible product of all the trust that has been invested by the policyholder in buying the policy in the first place,” loss adjuster Quadra Claims Services Graham director Cranford-Smith agrees. “It is not hard to see why the broker – being the face of the insurer as far as the policyholder is concerned – is a major stakeholder in the claims settlement process. So a loss adjuster who fails to engage the broker in the claims process does so at their peril.”

And in the current fragile economic climate, at a time when business (and relationships) cannot afford to be squandered, anything that helps to smooth the challenges of the claims process – whether for broker, adjuster, insurer or policyholder – must be a good thing, argues Patterson.

“Particularly in a soft market, brokers have a lot of power. It is when a claim occurs that the value of a product is proven,” he says. “Because brokers are so much closer to clients, they are in a much better position to demonstrate that value and show the adjuster the value of the insurance product.” IT

What loss adjusters do

Loss adjusters help insurance companies and policyholders resolve complex or contested insurance claims. Although independent, they normally take their instructions from an insurer and their fees will be paid by the insurance company.

Their role is to act as an independent mediator, to accurately assess claims on site and ascertain the proper liability of the insurer within the terms and conditions of the policy.

To this end, they will investigate the cause of a loss, confirm that the policy conditions and warranties have been observed and make preliminary enquiries into the nature and probable extent of the claim the policyholder will be submitting.

They will also advise the claimant on measures to mitigate the loss or consider whether someone else may have been responsible for the loss. If so, they will obtain statements and physical evidence to use later in negotiations when recovery of insurers’ outlay from a third party or their insurer will be sought. They can also act for the policyholder in a claims advisory capacity, assisting with preparation and negotiation of the claim.

Within commercial lines, claims tend to be more complex and of a larger scale than for domestic claims. They will often involve issues such as business interruption and liability. Where claims are contested, a loss adjuster will often be required to investigate the cause of a loss.

Commercial lines therefore tend to be handled by more experienced loss adjusters although, as the Chartered Insurance Institute argues, the principle remains the same: “Assess a loss and help the policyholder to begin recovery.”

How loss adjusters can work more effectively with brokers

• Be more proactive on communication – particularly around adverse issues regarding a claim or in terms of ironing out misunderstandings and managing expectations.

• Provide more regular client correspondence reports, more involvement in client meetings where appropriate and electronic access.

• Offer quick notification of accidents and claims, as well as the option of an online accident reporting system.

• Set up a dedicated hub, point of contact or relationship manager, or create a dedicated broker unit.

• Take more of a partnership approach, especially once it has been identified what the broker and loss adjuster role will be within the specific claims process.

Case study: the Cumbria floods

It is during catastrophic events such as major floods that the value of an insurance policy is thoroughly tested. This is also the time when the relationship between the broker and loss adjuster comes under the most searching examination.

If customers receive poor service from an adjuster in their hour of need, their perceptions of the broker will inevitably be tainted.

And floods don’t come much bigger than the one that hit Cockermouth, west Cumbria, last November. Over the course of 24 hours, 340mm of rain fell over the region, resulting in floods that reached a depth of six feet in places.

Director of Bluefin’s local office, Philip Jackson, says that it was invaluable to have experienced adjusters on hand in the immediate aftermath of the flood. He namechecks GAB Robbins northern area director Chris Day, who had overseen the adjuster’s post-Hull flood efforts two years earlier. “It was great to have him there because he understood the process,” says Jackson, adding: “Importantly, he was also able to tell us what to expect.”

Since the incident, the Bluefin team has developed close working relationships with the adjusters who converged on the town in the wake of the disaster. Jackson describes relations as “very open and transparent”.

But he cautions that the potential for conflict is always present. As Jackson acknowledges, adjusters have to “walk a difficult tightrope” in order to maintain their professional integrity.

But generally he believes the adjusters working in west Cumbria have demonstrated that their chartered status is deserved. “I have found adjusters to be the best candidates for getting the best out of the policy,” he says.

He also admits that brokers are sometimes happy to leave it to adjusters to deliver what he describes as “unpalatable messages” – when a policy cannot deliver what the customer either hoped or expected.

Jackson believes that the relationships established during recent months will stand his customers in good stead. And these relationships would be even better if firms with large enough potential claims could be assigned a nominated adjuster, he believes.

Although insurers have proved resistant to the idea, he believes that such an arrangement would improve the management of the claims process.

“It gives the adjuster personal knowledge of the business and means that when they arrive they are not starting at first base,” Jackson says.