More often than not, a loss adjuster is one of the first people a claimant will meet following a highly traumatic and emotional experience. Whether that’s a house fire, flood, or where they’re being sued for personal injury, it’s the loss adjuster’s job to gather evidence, expert opinions and witness statements, before finally negotiating settlement of the insurance claim.
The multi-faceted profession deals with the human element of the insurance process – often dedicating hours to counselling the policyholder through their loss – as well as the policy itself. It’s a crucial part of the claims process.
Yet, somehow, what it means to actually be a loss adjuster often goes misunderstood and the insurance industry is running the risk of replacing the profession with those less-qualified, or seeing it dissolve altogether.
And for those in the know, that would be a great tragedy, according to John Van Wetering, National Manager from Echelon Loss Adjusting.
“If I’m at a dinner party and somebody asks me what I do and I say, ‘I’m a loss adjuster’, I’m greeted with a blank face. But if I could stand up in front of a group of university students and explain to them what I do, I think they’d find it one of the sexiest career paths to pursue,” he says.
“One day you’re travelling overseas to handle a catastrophe, the next you’re receiving a crash course on how a robot is manufactured. Loss adjusting has it all.”
Van Wetering believes this lack of understanding has led to a shrinking talent pool. With few candidates rising through the ranks, adjusters are often continuing to practise into their 70s, larger firms are sourcing staff from overseas, and the recruitment process can take months.
That special someone?
In uncertain times, one thing in loss adjusting is for certain: when individuals join the industry they need to bring a good dose of passion and empathy with them.
“We’re at the coal face of the insurance process and there’s a detective side to it, as well as a great deal of emotional counselling. Our end goal is for the client to feel valued, to feel heard, and not feel like they’re just a number – and I think that’s the risk we’re running if the loss adjuster profession disappears,” adds Van Wetering.
It’s a notion seconded by Michael Collins from Prominent Loss Adjusting Services, who’s also President of the Australasian Institute of Chartered Loss Adjusters (AICLA).
“Loss adjusters do a lot, and I don’t think that’s really recognised or understood in the market. A classic example is the Victorian bushfires. You’d go to the site and a considerable part of every job would be spent listening to the policyholder’s absolute grief for their family, their community, their houses and their animals. They were literally crying into our shoulder,” he says.
“You can’t just go there and say, ‘Okay, let me get my tape measure out. You go and cry over there while I measure up your verandah’.”
Darren Trott, National Business Development Manager from Crawford & Company, has faced similar circumstances. He explains that some insurers prefer a fixed-rate for low-value claims to drive down costs – effectively leaving the loss adjuster with a set time to perform their role.
“It’s like saying, ‘Look, I’d love to sit down and have a cup of tea and hold your hand through this. But, I’ve actually got to get to the next property, sorry about that.’ The customer can end up feeling like a number,” he says.
When you have the loss adjuster, the insurer and the broker working together as a team, it is far more likely the insured will have a positive experience.
Tightening purse strings
Of course, such services come at a cost and insurers are businesses like any others. In hard economic times, they’re trying to reduce costs in the claims process. Add to that the time it can take for a loss adjuster to assess the claim from start to finish and it makes good business sense to explore other options.
One example is the builder direct model. Traditionally, a loss adjuster would be engaged by an insurer to secure a builder’s quote for damage, review that quote and provide comments and recommendations back to the insurer. But in the past decade, more and more insurers have been leaving the loss adjuster out of the equation.
“In many ways, it’s sensible business practice, but in other ways it’s not. The problem is a lot of builders have no knowledge of insurance, and yet they end up providing comments on policy response,” says Collins.
Builders are now taking it a step further by employing loss adjusters in order to promote themselves as a one-stop-shop.
A similar situation has emerged where some insurers are turning to investigation firms for their legal liability work, rather than using loss adjusters. The model has been gaining traction for some time.
“The rationale can only be based on a cheaper cost scenario, because most insurance investigators have no formal insurance qualifications,” says AICLA’s Michael Collins.
“Some investigation firms are promoting ‘insurance investigations’ as part of their capability, but without that knowledge, they’re unable to carry out a factual investigation relevant to the insurance policy that’s in place.”
Rolling with the punches
In an effort to garner long-term sustainability, loss adjusters are diversifying and segmenting their business, as well as turning to digital solutions to keep ahead of the game.
Trott says while there are a number of challenges facing the profession, risk can generate tremendous opportunities.
“We’ve segmented our business so there’s a very specific focus on the types of claims we deal with, while promoting the specialty skills our people possess to resolve those claims,” says Crawford’s Darren Trott.
“As a result, people who make up our business come from a variety of different backgrounds – they could be chemical engineers, marine specialists or forensic accountants. They don’t necessarily need to have started their career in claims.”
Such a move ultimately opens the profession up to a much broader demographic. Combine that with the introduction of digital technology to the role, and loss adjusters are well positioned to target new, younger recruits.
“The tools we’re adopting to gather information and make the right recommendations are changing too. We have smart buildings that set off an alarm when there’s a water leak, and drones that can provide high resolution video footage, mapping data and thermal imaging of bushfires and chemical spills – giving us access to places we normally couldn’t reach,” explains Trott.
What’s more, gone are the days where a loss adjuster would knock on your front door with a clipboard and pen. Echelon Loss Adjusting has gone paperless and now conducts their site meetings through an iPad app.
“We’ve developed an app that enables us to go out to a site meeting, interview witnesses, gather evidence, insert photographs and data and assemble a report within minutes of finalising the meeting. That process used to take five to six days,” says Echelon’s John van Wetering.
All such developments help to improve efficiency, but educating people through self-promotion is something AICLA’s Michael Collins believes could really see the profession turn a corner.
“What we do need is to be better promoted, because people just see us as an expense in the claims process. They assume that all we do is get quotes and recommend a builder, when in reality that’s a minute portion of our role,” he says.
As President of the AICLA, Collins writes a monthly newsletter to highlight the issues facing loss adjusters, contributes to a number of publications, and is a keen promoter of the industry’s conventions. But, ultimately, he says sustainability comes down to the individual loss adjuster and firm, and what they choose to do.
“Some people have their head in the sand, and others don’t. It’s just like any other profession – it’s up to the people to prepare themselves for change, to keep up to date and remain relevant.”
Trott adds that initiatives such as the new Careers in Insurance campaign, developed by ANZIIF with support from NIBA, are “long overdue and we’re proud to be a supporter”.
What we do need is to be better promoted, because people just see us as an expense in the claims process.
When it comes to preparing for the future, Darren Trott remains optimistic. “When you have the loss adjuster, the insurer and the broker working together as a team, it is far more likely the insured customer will have a positive experience out of a negative.”
John Van Wetering, too, advocates the teamwork approach, adding that “insurers wouldn’t engage loss adjusters if they had all the facts, so obviously something’s missing and it’s our job to find it.”
And that’s exactly what loss adjusters do – they find the missing pieces and bring them all together to make things happen, all the while holding the policyholder’s hand and keeping the lines of communication open with the insurer. Without them, AICLA’s Michael Collins believes the insurance industry faces the prospect of losing that crucial, human touch.
“I just hope that insurers continue to recognise the importance of having loss adjusters involved in the claims process – because in my view, without them, the industry will be exposed and potentially fall apart all together.”