As insurers continue to handle claims based on their balance sheets, rather than the insurance contracts they issue, policyholders are not receiving the treatment they are entitled to. Chris Ray reports

While it would be nice to tell readers of Insurance Times that the level of claims being referred to my company as a result of dissatisfaction on behalf of policyholders and brokers has fallen because insurers and their claims staff have changed their views on the handling of claims submitted by their policyholders, unfortunately this is not the case.

As a result, while I am obviously pleased to still be trading successfully, I am disappointed that the policyholder is still not - in an apparently increasing number of cases - receiving fair treatment or the settlement to which they are entitled under their insurance contract.

Almost every week I read letters or articles in the insurance press written by brokers, loss adjusters and insurance claims staff who are complaining about the claims handling process and the de-skilling of staff: in particular, adjusters and experienced claims personnel. The latest of these was written by Jim Pittman (Letters, 6 April).

Why do insurers appear to be ignoring the advice given and continue to handle claims, apparently, on the basis of the balance sheet rather than contract of insurance they have issued?

More and more qualified loss adjusters are now turning to policyholder representation, or - as insurers prefer to think of it - the "dirty word," assessing.

Pittman correctly points out that there are few, if any, qualified loss adjusters under the age of 35, and it is these younger unqualified adjusters who are now predominantly appointed by insurers to handle claims, hopefully impartially, on their behalf.

Unfortunately, for them at least, they are often negotiating with long-standing qualified adjusters, such as myself, who are appointed by the policyholder to ensure that they receive fair treatment from the insurer to which they have paid their premium.

When I started in the insurance industry some 30 years ago, the loss adjusting profession was highly regarded by insurers and indeed claims staff aspired to becoming loss adjusters.

While I appreciate that insurers have a duty to their shareholders, it appears to me that the constant reduction of fees paid to adjusters and efforts to use technology to handle claims rather than people is not the correct way to maximise profits.

This is certainly the case in the eyes of policyholders who have suffered claims, particularly as an insurance policy is only ever issued to protect such policyholders in the event that they do unfortunately have reason to submit a claim.

It has been pointed out many times in the past that the handling of claims is the 'shop window' of the insurance industry, yet that window seems to be becoming grimier and less transparent.

The majority of claims I handle on behalf of policyholders are as a result of insurers, often against the advice of their appointed loss adjusters, repudiating losses or voiding the policy, due to alleged non-disclosure, or some apparent breach of policy conditions.

Obviously, there are occasions when I have to advise prospective clients and they do not have a valid claim under their policy, but unfortunately there are an alarming number of cases where an incorrect repudiation has been issued, purely due to claims staff having an inadequate understanding of the policy wording or insurance law.

Such decisions often completely ignore ABI guidelines or previous decisions made by the Financial Ombudsman Service.

As I said, they are often also against the advice of the loss adjuster, and in those situations I have to wonder why the insurer has paid for such advice in the first place, if it then ignores it?

It still seems totally ridiculous to me that insurers are quite prepared to pay a fee to their "impartial" representative and in some cases reach the totally incorrect decision regarding a claim. Yet when their policyholder has no option but to appoint a claims professional to act on their behalf, to overturn that incorrect decision they have to meet such costs themselves.

Insurers pay for all other professional advisers such as surveyors, engineers, architects, solicitors and accountants under the terms of their policies, so why not assessors? Why are there still the old dogmas attached to this profession, which is more and more being represented by qualified loss adjusters and which is fully regulated by the FSA?

Perhaps this is the reason why assessors' fee policies are now becoming more popular and brokers are advising their clients to seek professional claims help in more cases.

Client accounts
On the subject of the FSA, my own company is obviously fully authorised and has a client account into which claim payments from insurers are made, in accordance with a mandate signed by each client.

Unfortunately, again I can only surmise as a result of old prejudices, some insurers still refuse to release payments to the client account, although they are more than happy to send cheques to totally unregulated contractors. If members of our own industry cannot trust each other, what hope is there for the policyholder?

I realise that my comments may be unpopular with certain sections of the industry, but I hear the same comments with increasing regularity from many people in insurance, and everything I say is with the genuine hope that the industry I have worked in all my life can be regarded as a fair and professional service to its clients.

If this were the case, I will have talked myself out of a job, but I regret to say that I don't think I will need to consider a new career for some time. IT

' Chris Ray is a director with Pioneer Adjusting