Adjusting to a new world
Ian Muress discusses how the role of the loss adjuster is evolving rapidly to meet the ever-changing risk environment and expanding client demands.
You have been in the loss adjusting sector for almost 40 years. How does the industry that exists today compare to the one that you joined?
In some ways the industry is significantly different and in others it has hardly changed. If you take the high-end, large-scale complex claims, while we have seen enormous advances in terms of the levels of sophistication surrounding such claims and the technologies employed, our clients are still today buying on value and at its core this remains a skills-based purchase just as it was when I was a loss adjuster handling such claims.
What has driven change in the large claims arena is the constantly expanding risk environment. In response, the generalist loss adjuster of 40 years ago has morphed into the specialist of today. It is about being able to offer teams composed of task-specific professionals specializing in areas such as forensic accounting, or sectors such as oil & gas, cyber or environmental liability. Increasingly, we are segmenting how these large claims specialists position themselves to ensure precise alignment with our clients.
At the other end of the claims spectrum – the high volume, low value claims – the change has been enormous. The world of Amazon, next-day-delivery and self-service capabilities has dramatically altered client expectations. They are extremely sophisticated buyers and are constantly challenging us as a business to deliver services that reflect this process-efficient, technology-reliant, fast-paced environment.
The sector is also having to respond to tough market conditions and lower volumes of work. How difficult are conditions at present?
The market is challenging, but we must embrace these conditions rather than fight them. The reality is that claims volume are significantly down due to a number of factors, ranging from higher deductibles down to the fact that more people today work from home reducing the risk of losses from electrical faults, or leaking pipes. Also, crime levels are at an all-time low. When I was a loss adjuster, an average claim for a domestic break-in was £5k; now most of the items that were being stolen have been replaced by your iPad.
But, as I said, we must embrace this new world. This has taken the form of expanding online capabilities, exploiting new technologies, introducing apps to boost self-service functionality as well as capitalizing on the latest in drone technology and satellite imagery to enhance claims-handling functions.
In a broader sense, we must also acknowledge the expanding scope of claims. Our role as loss adjusters is now much greater than simply “investigate, evaluate, negotiate and settle”. We are increasingly extending our reach along the supply chain to fulfil claims, which is taking us much more into contractor networks or Contractor Connection® as we call it.
So in response, we are capitalizing on new technologies, enhancing our processes, improving efficiency, and expanding our remit to meet changing client needs.
You mentioned the impact of new technologies. How significant are these in advancing the role of the loss adjuster?
If we start at the high-level data, technology is helping us unlock the power of Big Data, enhancing analytical capabilities and supporting our work on predictive analytics. At the coalface, we continue to develop new tools, investing more on this front than any other company in the sector. Adjusters are using the latest in hand-held technology, coupled with aerial and satellite equipment, to enhance the adjusting process and improve our data capture capabilities; while new apps are improving our client interaction. They are also making the most of the latest advances in video-streaming technology.
But it is important to remember that technology will only take you so far. For example, my 28-year-old son would be more than capable of downloading an app in the event of a flood in his flat, following the prompts to describe the claim and uploading footage of the damage via his iPhone. For my 80-yearold mother-in-law, it would be a completely different matter.
We must also continue to recognize the critical role of the on-site loss adjuster. Where people have experienced a life-changing loss, whether a major flood or a devastating fire, what they want is someone knocking on their door, offering them support and advice, and essentially putting an arm around them during their time of need. New technologies play a central role in our ability to do our job, but when all your worldly possessions are floating in five feet of water what most people want is someone to be there with them to help them through it.
Yes, leading-edge technology contributes to increased efficiency and productivity, but technical, hands-on claims handling remains at the heart of what we do.
How challenging is it to get ‘feet on the ground’ in sufficient numbers in the immediate aftermath of an event, particularly given the scale and location of events such as the Tianjin explosion, the Thailand floods, and the Christchurch earthquakes?
Any loss adjuster of scale must be able to quickly move resources around the world, capitalizing on its global network to bolster local teams when events demand. The earthquakes in Christchurch, New Zealand were catastrophic in every sense of the word. The overwhelming size of the event meant that we had to draw in expertise from the U.K. and Australia to help support our teams on the ground. In fact, our adjusters were on site for almost two years dealing with the resulting claims.
We also saw this during the U.K. floods in 2007, when our U.S. colleagues were able to support our U.K. adjusting teams; while more recently members of our U.K. team have been supporting our Australian teams in tackling a series of weather-related losses. And it was the same with the earthquake in Chile, the tsunami in Japan and the floods in Thailand.
This is routine for us. If you look at our Global Technical Services division, their ability to mobilize teams to tackle catastrophic events anywhere in the world at a moment’s notice is central to their ability to deliver claims fulfillment.
The way I often describe our global capabilities is that we are able to join the dots. We are a very cohesive, joined-up organization at both a local and global level. This is viewed as a key advantage by risk managers across the board, from insurance companies through to Fortune® 500 companies. In an increasingly interconnected world, we have to be able to maintain our position as a truly global provider.
This increasing interconnectedness is of course creating the potential for significantly greater losses with global ramifications. What are the implications of this?
Something which we are constantly having to consider is the overly used phrase “What if…?” If we take the recent U.K. floods, while these were significant events they were not on the same scale as those experienced in 2007. But what if they had been? When the Thames flood barriers were originally installed the view was that they would be lowered on average twice a year. Today they are lowered on average four times a month. What if these defenses were to fail and London’s Square Mile were to be flooded? The global economy would be impacted severely.
In fact, this is not so much a “what if” question, but rather a case of when. Records show that events of this nature are on the increase. We should therefore not be surprised if this time next month London is under ten feet of water – we’ve been talking about this as a realistic disaster scenario for the last decade.
As an industry, we can’t sit back and simply hope that we are able to respond when such an event occurs. We have to be primed well in advance. At Crawford, we have a global bench strength of some 8,800 people spanning a range of specialist capabilities, an internal cohesiveness that strengthens our ability to respond, and a wealth of technological capabilities at our disposal. It is this depth and breadth that enables us to say with confidence that when – not if – something like this happens, we will be there.
Looking specifically at Crawford, how is the company seeking to capitalize on market opportunities moving forward?
At the most fundamental level, it is about evolving and enhancing our range of services and capabilities to ensure we can fully capitalize on the market potential we see. That involves leveraging our high-end technical capabilities with increased specialisation and segmentation; and further looking to develop these capabilities as part of a wider shift towards consultancy.
From a claims perspective, we need to create a more open platform to better manage networks in the claims process, as well as taking advantage of the decades of claims data that we have still to fully tap. Opportunities for increased TPA services will arise as a result of the continuing self-insurance trend and we must be able to respond to them. As I mentioned earlier, our reach is also extending further down the supply chain so we must develop more solutions to facilitate this.
Finally, we must recognize the changing demands of our clients, re-tooling our approach to align with ever-rising customer expectation, particularly amongst “Millennials”.
Ian Muress is chief executive officer of International at Crawford