Alan Harris, chartered engineer, believes insurers are moving backwards in their handling of subsidence claims. Customers are suffering as a result.

The recent trend of insurers seeking to take control of subsidence claims is alarming and will lead to policyholders complaining of unfair treatment.

The most worrying development is RSA's recent move to make regional appointments of single firms and contractors for resolving claims – a method foolishly aspired to by other insurers.

In the short term it will reduce consultants' fees, but in the medium and long term it will cost RSA and others who follow very dearly. I have no doubt that the imposition of panel consultants and contractors on claimants will lead to an ever-growing list of disgruntled policyholders who will justifiably consider their rights to a fair settlement compromised by insurers.

The technical claims units and independent panel engineers relate to claims units which largely do not possess sufficient, if any, technical knowledge and independent panel engineers who are anything but independent of their principal employer.

This cannot be an acceptable way to settle subsidence claims. The appointment of single consultant firms owing a massive fee income to the single insurance company must create substantial bias. Consultants so appointed will not be able to ignore the pressure to minimise the cost of claims to their principals. Single contractors will not be able to avoid the temptation to increase the cost of the work to a captive client. Indeed, under the trend of more competitive fee payments, the screw has been turned yet again in this round of appointments, and puts even further pressure on the appointed consultants by ensuring that there are insufficient resources for them to fully investigate the subsidence event in the first place.

In-house control is illogical
The insurers current concept of virtual in-house control of claims settlement is about as illogical as running international rugby matches where the referee and linesmen are selected by only one team and from their own nationality. The disadvantaged team will always be disgruntled even if the appointed officials try to do their best to be fair.

In a game attended by a crowd any bias of officials is open to the public gaze, but, in claims settlement the performance of officials is only seen by the parties involved, unless or until the claimant reverts to court action to enforce the terms of the policy.

Resolution of subsidence claims cannot be assigned to a non-analytical system of repair expenditure control through recognised dealerships, as can be achieved for cars. The assessment and remediation of damage to a home requires more subtle skills. Contrary to industry trends there is no quick fix.

The insurers' methodology has been adopted by the loss adjusting firms. The consequence is that there are a handful of competent engineers remaining to analyse claims and a plethora of inexperienced management-orientated administrators carrying out the claims control process. The result is more disgruntled claimants moving towards the legal process.

The savings being made on proper investigation work not only lead the insurers away from the proper remedial solutions but also assist consultants such as myself in achieving success eventually on the claimants' behalf.

Decline of foreign earnings
Perhaps the point of greatest concern is for the probable decline of foreign earnings from the insurance industry. In the past the industry had a strong home base and a name for reasonably unbiased settlement of claims. From that grew the prospect for an internationally recognised reputation and massive client base. The growth, however, of an attitude that the payment of claims is an unnecessary and irritating nuisance is a disaster in the making for the British-based insurance industry.

Surely it is not beyond the wit of the insurance industry to devise a fair and reasonable way of removing the present bias from claims settlement. Perhaps one route to follow would be to stimulate the professional bodies to devise a method of certifying the appropriate expertise of consultants (simple chartered status cannot be sufficient) in the investigation and resolution of subsidence claims. Under Woolf there will be a new breed of many "single joint experts" which must offer a possible way forward, as long as the experts are not the single nominee of the insurance companies in each case.

Finally – a word of advice to insurers. Satisfied claimants are the product which the industry sells and which produces the turnover and the profit. A system which produces a higher number of dissatisfied customers can only lead to decline for the industry.

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