The past few years have seen a subtle yet crucially important change in the relationship between loss adjusters and insurers. In the past, it was a simple case of a service provider fulfilling a contract. Insurers set out precisely what they wanted, and adjusters delivered – or not – according to their ability.

Now, relationships tend to be much more mature. They have developed, in fact, into partnerships. Instead of the insurer saying “jump” and the adjuster asking “how high?”, both parties now work together to identify what needs to be done to deliver the best possible service to the policyholder. The adjuster is expected to be creative, to share experience and to contribute expertise.

For any partnership to work, there must be give and take on both sides. If adjusters are to contribute fully, they need their insurance company partners to recognise the important role that adjusters play – and that means giving the adjuster the time, space, resources and authority to do the job properly.

This evolution in loss adjusting has reached its peak with the concept of full delegated authority. This is where the adjuster assumes complete day-to-day control with regard to managing the insurer's adjusting requirements – using its initiative to develop a strategy that will meet the prime objective of securing and enhancing the standing of the insurer.

A big responsibility

Delegating authority is a major step for an insurer, and a huge responsibility for an adjuster. The insurer is effectively putting its reputation – its most valuable asset – in the hands of another organisation. For example, the call centre used by its policyholders when they make claims will have the phones answered in its name, even though the service will be run on a day-to-day basis by the loss adjuster.

If the adjuster doesn't perform, the results are likely to be termination of the contract. When it comes to delegated authority, there is no such thing as a small mistake.

But if a delegated authority scenario is to work properly, adjusters need the freedom to develop it fully. In other words, the insurer must trust them to get it right. If they are reluctant to commit to this quality and depth of relationship, then they are perhaps not ready for genuine delegated authority.

Trust has to be earned. So what must the adjuster bring to the party?

It might seem obvious to mention “expertise”, after all, if a loss adjuster doesn't know the business, what is it doing in the business? But as with any discipline, there are degrees of knowledge and different levels of commitment. For example, an adjuster might have particular ability with regard to forensic accounting or covert surveillance or any of a multitude of disciplines.

The insurer, as client, will know what skills it will find particularly attractive. And if the relationship is properly managed, ideas, knowledge and experience will be shared between insurer and adjuster. In other words, the adjuster must be able to rely on the insurer to pool expertise. That means having open lines of communication working in both directions. The concept will founder if the adjuster is not able to talk to its client as and when necessary, and at the appropriate levels of seniority.

Expertise, coupled with experience, facilitates innovation – another important attribute that adjusters can offer. One of the most significant developments in the commercial insurance arena in recent years – specifically, within the employer's liability market – has been the process of rehabilitation. This is where an injured employee is given every possible assistance and encouragement to return to the workplace, rather than languish at home.

Rehabilitation has proved hugely successful because everyone involved benefits: the individual is provided with practical support to help them re-enter the workplace, the employer regains an employee and avoids the expenses and hassle of recruiting and training a replacement, the insurer avoids an expensive claim and is therefore able to control the renewal costs to the policyholder.

Listening to each other

Certain loss adjusters have been at the forefront of the development of successful rehabilitation strategies, which they have been able to pass on to their insurance company partners. If adjusters did not have the energy and expertise to pursue such initiatives, they might never see the light of day. But it is also important that insurers are receptive to such developments. If they have no enthusiasm for the adjuster's suggestions, the partnership will not progress.

By the same token, both insurers and adjusters must be alive to the potential offered by technology – and they must be keen to turn technological developments to the benefit of the relationship. The infrastructure within a call centre would have been a good example several years ago, but it is now so commonplace that fresh innovations must be unearthed to provide a competitive edge.

Communications technology is the area where great strides are being made. At the leading edge, adjusters are taking video cameras to claims scenes and downloading images or footage direct to base via modems accessed with mobile telephones. Voice-to-text recording systems are allowing statements and reports to be verified and signed by witnesses at the scene while memories are vivid and at their most reliable.

Not all adjusters are grasping these advances with the same speed and enthusiasm. Insurers will choose their partners on the basis of their desire to work with leading-edge companies that are able to harness the latest products and facilities, just as adjusters will favour insurance companies that are alert, dynamic and progressive.

An essential characteristic that adjusters must possess, especially in the age of delegated authority, is pro-activity. Their responsibility as participants in a partnership is to look for ways to improve processes and to generate ideas that will facilitate further improvements in the way the relationship works. It is no longer sufficient to sit and wait for instructions; adjusters have to take the initiative and help the partnership make progress. But this can only happen if the insurer is comfortable working in that context.

In any partnership between insurer and adjuster, it is essential that the chemistry is right. This means the all-important human contact that is still the hallmark of successful relationships in the insurance industry. Insurers must be prepared to put senior staff into the field to meet their adjuster counterparts.

The quality of communication between insurer and adjuster will determine how successful the partnership can be in tackling problems and seizing opportunities, wherever and whenever they arise.