Despite being vital to the industry, loss adjusters are struggling. Perhaps a round of consolidation will bring more power to their relationships with insurers
It must be galling at times being a boss of a loss adjusting firm. While some companies in the insurance industry reap big profits from questionable add-on products, loss adjusters – who provide a vital service to policyholders with claims – are struggling in tough market conditions.
Whereas broker consolidators have a huge amount of bargaining power over insurers, the reverse is probably true when it comes to loss adjusters’ relationship with insurers. Loss adjusters are bustling each other out of the way to compete on price and service to insurers.
Meanwhile, if insurers don’t like what they see, for some there is the possibility to take the function in-house. It all adds up to a difficult challenge for loss adjusters; one which Merlin couldn’t survive.
Perhaps what’s needed is a consolidation of the loss adjusting industry. One in which a ‘mega loss adjuster’ will emerge, with the power to bring more of an equilibrium to relationships with insurers. But this isn’t 2005. Investors such as private equity and banks are sitting on their hands as the UK lurches back into recession and financial markets remain volatile.
It looks like loss adjusters have a few chapters left in this unhappy tale, yet.
- There is some good news for Willis at last, a company that seems to be moving on from its 2011 annus horribilis. Although it trailed behind its rivals in the half-year results on organic growth, its profit margin and improvement in profits were the best among its competitors. Willis will always get lumped in with Aon and Marsh when it comes to results comparison, but we should remember that it is a smaller business.
- This success is a testament to chief executive Joe Plumeri, who has beaten the drum loudly for his business. It will be interesting to see what culture the new boss will bring to Willis following Plumeri’s exit next year. Somehow being quiet won’t suit the company.