The Chartered Institute of Loss Adjusters dates its origins to a meeting held on December 21, 1940.
As we stand on the threshold of our Diamond Jubilee, it would be interesting to know whether our founders could have predicted the changes of the past 60 years any more accurately than I can predict now what may face future adjusters.
Change is endemic. It affects the macro-economic and the micro-economic environments of the insurance industry and the adjusting profession alike. The pace increases constantly.
I cannot begin to imagine what our world will be like in ten years time, let alone 60 years hence.
The only thing certain about the future is that it will be different. I do, however, believe that the essential qualities of the loss adjuster will be broadly the same. A large part of our work will be based upon the assessment of damage or injury and the liability of insurers under policies.
However, the manner in which that work is undertaken will undoubtedly change soon, and dramatically. Nevertheless, no matter how the insurance is provided, there will still be claims and there will still be a need for claims handling and claims investigation.
I foresee CILA and its members, whose primary business (according to our charter) is, "the investigation, management, quantification, validation and resolution of losses (whether insured or not)" having a continuing and increasing role.
Adjusters have proved themselves adaptable in the past and I expect them to be equally as adaptable in the future.
Taking control
However, adjusters will have to undertake a more pro-active role in the management of losses in order to control the overall claims cost which is, of course, insurers' largest overhead.
The recent emphasis on customer service and efficiency will continue. The customer is king and will remain so. There is little scope for insurers to further expand the coverage offered.
Most policies provide broadly the same cover, and premium costs will remain competitive. Insurers, therefore, will wish to distinguish themselves by the quality of their customer service.
Adjusters are inextricably part of that service. The claim is when the promise made at inception of the policy is delivered. However, that promise must be delivered at an economic cost. The principal challenge facing insurers is how to deliver that service in the most cost-effective manner.
Insurers will only use loss adjusters where the adjusters can add value to the claim process. There are many other service providers actively seeking involvement in the work traditionally undertaken by loss adjusters. Damage management contractors and contents replacement companies now offer a rapid service and purported savings to insurers. Some of these savings are in fact illusory. It is all too easy to replace a damaged carpet and give insurers a 25% discount when a proper investigation would reveal the loss is not covered at all. Chartered loss adjusters are ideally placed to fulfil this role.
Greater efficiency
But how can greater efficiencies be achieved?
The answer has to be by harnessing modern technology, notably the internet. It is estimated that currently there are 12 million users in the UK and 10,000 new users log on daily. In fewer than five years, one person in three will be on-line.
Insurance, which is in any event a virtual product, is ideally suited to internet-based transactions. An IBM study in the US has revealed that the average cost of a face-to-face transaction is US$19. The same transaction via a call centre is US$9 and on the internet it is only 45 cents. Savings of that magnitude have to be of interest to insurers and adjusters. The policyholder submitting his claim to the insurers' web site can be automatically linked to the loss adjuster providing the claims handling service. The adjuster in turn will be able to automatically instruct contractors, suppliers of replacement goods and the like.
Adjusters will also be able to use the internet for connections to on-line databases providing expert information. Internet-based transactions, or e-commerce, will enable insurers and their adjusters to locate service centres away from high-cost cities to lower-cost environments.
Indeed, one of the current difficulties encountered by insurers in developing call centres - the unavailability of suitably qualified staff in the selected area, could be eliminated with staff working from home connected by computer. E-mail is likely to become the norm for business communications. Suitable protocols will undoubtedly be developed enabling adjusters to ask their clients' databases for information necessary to conclude the adjustment. Proposal forms and historical records will be instantly accessible.
E-commerce will simply become commerce.
Harnessing technology
Technological changes will also enable insurers and their adjusters to deploy scarce resources in the most effective manner. Sophisticated intelligence systems are being developed to filter claims so that routine claims can simply be paid leaving only those requiring investigation to be investigated. Fraud investigation tools, notably voice recognition systems capable of identifying when a claimant is lying, are also in development.
Whatever the technological changes and whatever the macro-economic changes, the basic skills and attributes of the loss adjuster will remain the same. Adjusters have been adding value for 60 years and will continue to add value for the future.
However, in addition to traditional loss adjusting, adjusters will be active as claims managers or, in American parlance, third party claims administrators.
It is not beyond the bounds of possibility that a loss adjusting firm could offer to handle all claims, including settlement under policies for an insurer, in return for an annually negotiated fee, effectively eliminating the insurers' traditional claims department. Individual adjusters will be active in insurance companies, insurance brokers, accountancy firms and others. Loss adjusters will increasingly act for the policyholder, with the approval of insurers, who will value the integrity brought to the process.
CILA will seek to expand its membership drawing in all organisations and individuals active in claims handling.
The Institute's newly-formed Society of Claims Technicians is but a first step in this process.
I am in no doubt that whatever the future holds, loss adjusters will adapt and continue to be a vital and valuable part of the claims handling process.
