As claims handling becomes more efficient, loss adjusters are turning to loss assessing. Kathryn McCarthy asks can poacher turn gamekeeper?
Claims management is a complex arena involving assessors, adjusters, brokers, risk managers, surveyors and forensic accountants. At the centre of many larger claims settlements are the assessor and the adjuster, each side negotiating on behalf of their clients.
While great strides have been made to make policy wordings clearer, in the event of a loss it is reasonable to expect a claimant may want some assistance, especially when preparing a large claim.
This is where loss assessors have been operating for many years, acting as independent experts who understand the business of interpreting policies and negotiating a fair settlement.
But loss adjusters are muscling in on the traditional role of loss assessors who, in turn, view this as cynical, in light of adjusters' past attitudes.
Alan Harris is a director of the Harris Claims Group, one of the top three loss assessing firms. He is also the current president of the Institute of Public Loss Assessors (IPLA).
Harris says: "At present, there are a number of loss adjusters looking for additional sources of income and are approaching brokers and other intermediaries to see whether they can now act for the policyholder.
"Over many years, it is the loss adjusters who have steadfastly told policyholders that it is not necessary to appoint a loss assessor as they, the loss adjusters, are impartial and will deal with all aspects for the policyholder. It's interesting now to see some adjusters, who are no longer acting for their provider, seeking to cross the boundary wall."
Loss assessors say they are in the business of claims preparation for the client, whereas loss adjusters adjust the claim on behalf of the insurer. Assessing and adjusting require different skills and many assessors believe adjusters are not equipped to do the job for policyholders. Added to this is the growing acrimony between assessors and adjusters, predicting each other's demise within a decade.
Time to bite the bullet
Malcolm Harvey is managing director of the Loss Recovery Group (LRG), which provides an insurance policy to cover the cost of preparing a claim. The LRG has a panel of 105 chartered loss adjusters and, according to Harvey, most brokers he talks to would prefer a loss adjuster to work on a client's claim, rather than an assessor.
"There are a maximum of 200 assessors around the country and the problem is that there just aren't enough of them to have recognised qualifications in what they do," Harvey says. "They are outside the loop, not recognised by the insurance industry."
Harvey argues if loss assessors are going to be recognised by the insurance industry, they must bite the bullet and join the Chartered Institute of Loss Adjusters (CILA). "CILA has offered loss assessors the chance to join its ranks, but they have stood back from this. They really should operate under one institute."
Harvey predicts there will be a radical change in the next five years to the assessing market. "The adjuster market is contracting as insurance companies reduce their panels. So adjusters are more open to doing the work assessors do. I believe, ultimately, assessors will disappear."
As adjusters begin to make in-roads into loss assessing, the critical problems facing assessors are the lack of recognised professional qualifications and the disunity in the sector, leading to a poor perceived profile in the wider insurance industry.
Chief executive of Balcombe Group, Nicholas Balcombe, says: "The only way to improve the profile of assessors is to build cover for claims preparation fees into a standard commercial policy, so assessors fees can be included.
"We have been lobbying for this change for years, but UK insurers are fighting against it, even though some of the major insurers with overseas operations include this in their overseas policies."
But Balcombe is confident this change will happen. "Eventually, a large US insurer will come over and offer this cover, then others will follow suit. This will clean up the industry because insurers will operate panels of approved assessors for their policyholders."
The contention of assessors is that anyone who has suffered a large loss and is faced with a delegation of professionals from their insurer will benefit from someone to help achieve the maximum benefit from the policy. But what is being argued is whether loss assessors are best placed to do this, or if adjusters can take over this role because of their wider recognition in the industry, professional status and profile.
There are three major assessor firms in the UK - Harris Claims Group, Balcombe Group and Thomson and Bryan - and a number of small operators, making up a divided community. The Institute of Public Loss Assessors (IPLA) only has the support of two of the top three firms, there is no consensus on qualifications and raising the profile of loss assessors is a challenge. But there is agreement that, until there is a common voice for the sector, there is little chance of moving their cause forward.
Balcombe believes if the major assessing firms pulled together through the IPLA, it would lead to a much stronger institute, like in the US. He says: "The National Association of Public Insur-ance Adjusters (NAPIA) is a very strong association. It has rules and regulations for members and includes recognised qualifications. Until others agree to clean up the industry, there is nothing one can do alone. The three must work together."
Thompson and Bryan is the only one of the three large firms of assessors that hasn't joined the IPLA. Managing director Peter Thompson says: "The IPLA's greatest setback is the lack of a recognised qualification - it has no educational value. In its defence, it has tried to get loss adjusters to open up their exam system to assessors in the past."
Thompson says the company has its own in-house regime for promoting professionalism. "The difference between us and other firms is that our employees have to take insurance institute qualifications. Nobody gets promoted in our company without a professional qualification relevant to their role."
On the question of raising the profile of assessors, Thompson doesn't see any quick solution. "There is no easy answer when insurers and brokers don't believe in the value of loss assessors. It will take a very strong-minded candidate to pull loss assessors together."
The future of loss assessors lies in the hands of insurers, as they direct their clients towards whichever is the favoured route for claims settlement. Unless there is unified commitment from assessors to raise their standards and profile, their future looks uncertain and they may be swallowed up by the larger adjusting profession.