With the focus on claims management and cost saving, the Loss Adjusting industry has an important role to play. However, the environment is still uncertain regarding fees, qualifications and expertise relating to their function. We asked for some comments from the industry and received the following responses. It is however interesting to note that, whereas we usually receive an overwhelming response to requests for comments on various topics, this topic seems to be quite delicate, as the response was not that great.
Professionalism in Loss Adjusting in South Africa
Ken Cubberley, Cubberley and Associates defines the professional loss adjuster.
The ILA’s attempts, over many years, to uplift the fraternity of Loss Adjusters has been met with varying responses from both junior and senior members. But, the reality remains that
a loss adjuster worthy of the name must have the necessary technical and legal knowledge.
Coupled with this, the adjuster must never forget his role – to identify that an insured event has taken place, and that this event has resulted in a loss .
The adjuster must then quantify the loss sustained, define the reasonable measurement and formally discuss the findings and measurements with the insured. Finally he/she must produce a report to the insurers that is competent and succinct, and embraces formal recommendations. All the aforementioned should be accomplished within a strict service interval.
The adjuster charges a fee at the conclusion of the case. However, this does not necessarily make him a professional but rather a competent and reliable loss adjuster who will automatically develop a market following, from both the insurer and insured.
The industry’s application to adjusters will be dependent on the individual’s dedication to his role as an adjuster: competence, skill, mannerism, and service turnaround.
No doubt, there are a number of claims technicians who feel that they themselves could do ‘a better job’. Admittedly, some claims technicians may be described as professional and have the experience to do a great job. However, there are those who would accept a gratuitous evening out for following a subsequent number of instructions.
What needs to be done to:
- Enhance the view the ‘Industry’ has of loss adjusting?
Each loss adjuster must operate continually to his highest capability.
- Improve current qualifications?
There has always been a reluctance on the part of many adjusters to find the time to study and write exams, while working at the same time; however, adjusters must realise, as mentioned before, that only one who has the required technical knowledge, legal understanding, in addition to the expected good communication skills and timeous delivery of findings, at a reasonable cost, can be called a practitioner. This high standard clearly suggests that a new incumbent should initially work under a mentor before ‘flying the nest’.
Loss adjusting should be based on open/free market principals: one cannot dictate to an insurer whom he should or should not use. Negative experiences of poor performance should be an indicator of which loss adjuster should be used.
- Develop skills?
- Skills Level/Skills Development
Historically the larger adjusting companies have attracted the ‘would be’ junior adjuster. It is very difficult for the smaller independent company to do so, even when the potential employee is ‘niche’. In the longer term, it should be the responsibility of the insurance industry as a whole to address this problem. Currently, there are many experienced adjusters reaching retirement – surely perfect timing.
This should clearly be a matter between principal and adjuster – market-related. One would like to see the end of outsourcing to one company in regard to a Book of Business (though there is nothing wrong with a single corporate account). An Underwriter placing his Book of Business with a single Loss Adjusting Company is similar to a Japanese fishing fleet using seabed vacuum hoses – it removes the competitive nature of the business.
Norman Hornby, Managing Director, Crawford & Company SA, shares his views on issues regarding the industry.
We believe that professionalism in loss adjusting extends well beyond what we offer our clients; a combination of resources, skills and precise data is needed to set a company on good footing with most insurers. We believe that, being a part of one of the most recognised loss adjusting firms in the world, our reputation precedes us. As the African representatives of Crawford and Company we are fortunate to integrate our wealth of global resources and infrastructure with the best of local expertise and region specific knowledge. We cover Africa, south of the Sahara plus the Indian Ocean islands and have access to offices in Tanzania, Uganda and Kenya.
In the type of job we do, we must always be aware of the dynamics of relationships that exist outside of our given tasks. For example, the people who’ve suffered the loss or damage must be addressed with empathy and understanding. Insurers themselves have to be assured that they are dealing with people of integrity, in whom they can trust. In its most basic form, we look at our task from the standpoint that we are dealing with other people’s money and have to deliver a professional service. Our loss adjusters are trained professionals, mostly with academic qualifications and I do believe that certain insurers are not prepared to pay realistic rates for such people. One needs only to look at similarly qualified staff in other professional fields to see the discrepancy. In terms of the people we employ, a minimum qualification would be useful; however, in the large corporate claims area where Crawford tends to operate, technical skills and industrial experience are more important, which is why I would like to reiterate the point about professional people being recompensed in terms of market rates.
Lack of skills is a major problem and it is a challenge to attract and retain suitable young professionals. Insurers must also recognise that developing good people for the future adds cost to any organisation and the smaller loss adjusting companies often cannot afford this. At Crawford and Company we are fortunate enough to have a strong and functional recruitment and mentorship drive. We are on the constant look-out for graduates and other youngsters who show great potential. Our formidable senior staff base is also an advantage; these are the people who are able to nurture, teach and grow the younger recruits who enter our workforce.
Regulation is essential but should not interfere with free market principles. Without due recognition by insurers of the role played by the ILA, it becomes difficult to enforce our Code of Conduct. We think that Service Level Agreements and fees should be negotiated individually and do not believe that the ILA should be involved, particularly in setting fees.
Alan Blem, Associated Loss Adjusters, calls on all Loss Adjusters to raise the standard in the industry.
Professionalism is something which impacts not only Loss Adjusters, but the Insurance Industry as a whole. In a rapidly changing environment, professionalism and accountability are the order of the day, and we all certainly need to lift our game.
Loss adjusters have not done much to change their circumstances over the years and, whilst the ILA is, we believe, on the correct course, many members still refuse to keep abreast of developments, to the detriment of others.
The old adage “You can take a horse to the water but can’t make it drink” comes to mind and, whilst the ILA continues to encourage Continuous Professional Development through the hosting of workshops, seminars and conferences, members who have failed to move with the times have regrettably developed an arrogant approach towards the problem, and believe their services will continue to be utilised whether they embrace professionalism or not.
The loss adjuster has never before been under more pressure to deliver service exceeding his or her Principal’s expectations. Due to the intricate nature of insurance claims and contracts of insurance, advancements made in the field of technology and pressure from the global village, it goes without saying that instructions received are to be undertaken, not only with the necessary care, skill and expediency, but also with foresight that such service is to add value to the Principal’s business, preserve the latter’s good name, ethos and reputation and be totally objective/independent.
This task, naturally, can only be achieved by a loss adjuster subscribing to the highest level of professionalism.
Although we can never be prescriptive and need to recognise that there are suitably skilled individuals who are not members of the Institute of Loss Adjusters who can provide the same or sometimes better service than qualified loss adjusters, the market somehow still needs to be persuaded to support those members of the Institute who do comply with its requirements.
As different types of insurance claims exist that require varying levels of proficiency, the market should also be mindful of whom they appoint to attend to specific types of losses; sometimes the cheaper, not necessarily suitably qualified individual, is chosen.
A minimum loss adjusting qualification such as the NOF 5 qualification currently under construction, does need to be introduced to ensure that any new entrants embarking on a career in loss adjusting fulfil a higher level than many of the current members and, in time, this will hopefully reap rewards.
Although regulation by statute is perhaps what is needed to compel change, experience dictates that this will in all probability result in members (most of whom are nearing the end of their career), leaving prematurely, thereby creating an even greater skills shortage.
The Institute and its members can, however, only blame themselves for this shortage. They need to take responsibility and look to lure more graduates and insurance practitioners into the profession, to ensure that we survive and prosper.