New president George Moss says that loss adjusters can fill the audit credibility gap. Elliot Lane reports
The Chartered Institute of Loss Adjusters (Cila) will fight to be included in the new regulatory regime if loss adjusters are excluded from the Treasury's consultation paper.
Cila president George Moss told Insurance Times that there had been some discrepancies relating to the inclusion of loss adjusters in the General Insurance Standards Council (GISC) rulebook that had yet to be "fully resolved".
"We have met GISC, the Financial Services Authority (FSA) and the Treasury and our discussions are going well. I will be canvassing members on how we should respond to the FSA's consultation paper on the Tiner Project and the Treasury's paper when it is published.
"We are still not sure if we will be included in the Treasury's paper. But if we are excluded, we will fight to be included."
Cila welcomes the new regulatory regime, Moss says, provided it is not "overly expensive or cumbersome".
"Any company that is behaving properly has nothing to fear from it," he adds.
Since succeeding former president Gerald Williams in April, Moss has been meeting with the chief executives of all the major loss adjusters. The recent spate of scandals in the financial services industry, such as Independent Insurance, HIH, Enron and now WorldCom, has had a profound effect on the industry.
"It is suddenly very important for companies to act with integrity which was something we were taught in our examinations, but all rather took it for granted.
"It is because people are now more concerned with other people's behaviour and the financial stability of companies. The industry wants to work with people that act properly and show financial prudence."
In a passing comment at the annual meeting, his predecessor said that the Institute should consider inviting loss assessors into the fold. His comment caused a minor storm which drew a tart response from the Institute of Public Loss Assessors (IPLA), claiming the loss adjusting community had treated assessors with "disdain" over the years (30 May, Letters, Insurance Times).
Moss declines to comment directly on the issue. However a Cila Fellow told Insurance Times that the reports gave the impression that it was a done deal.
"The way it has came across is that Cila had let in loss assessors, that if they paid their fee, they could become a fellow without having to go through the examinations, which is not the case at all."
Moss will confirm in an article which will be published in the next edition of the Loss Adjuster to clarify Cila's position. But he says that the council is not looking to change the charter at the moment.
"It is time-consuming and takes up a lot of resources. We need to be relevant and modern, but at the moment it doesn't need to change.
"But I do say: never say never," he admits.
Filling the gap
As auditors' reputations plummet, a major opportunity exists for loss adjusters to fill the credibility gap.
Moss says: "Loss adjusters have multi-disciplined training where they have auditing and accountancy experience. So, if there is an opportunity in the market, why shouldn't they take it? I have no hang-ups about it, provided it doesn't breach the charter."
Insurers talk about partnerships, but the panel system has become an aggressive tendering process with more insurers bringing loss adjusting teams in-house.
Moss says the in-house route does not cut costs; it is in fact financially draining.
"The majority of insurance companies are favouring the outsource route in my experience.
"What I would like to see are the panels lasting for longer periods. The amount of time taken up by the insurer and the loss adjuster in the process is very time-consuming.
"If we are talking about partnerships then I would like to see the panel relationship last longer so we can get away from the tendering process and get on with the delivery."
George Moss in profile
Education: Marlborough College
Career: After leaving school he joined the international claims department of Willis Faber & Dumas. Joined Thomas Howell Selfe & Company in 1976; promoted to regional manager in the Watford office (1988); Thomas Howell merged with Crawford & Company in 1997. Present position: managing director of Crawford's customer relationship management.
Hobbies: Is renowned as a golfer (handicap eight).
Favourite book: My Life and Soft Times, by Henry Longhurst
Favourite televison shows: Current affairs, BBC News