Property SIG Sessions
Question Time from Coventry: round-up
Paul Handy, Chairman of the CILA's Property SIG, was joined by Andy King, managing director at Marsh’s forensic accounting and claims services, Brendan McCarthy, partner at Beachcroft and Paul Reddington, claims manager at Aviva. The panel answered a topical set of questions on the issues affecting loss adjusters in 2009.
1. Does the panel feel that Insurers’ approach to conditions precedent and warranties has hardened as a result of the current financial climate?
Generally the panel felt insurers had not hardened their approach, although they agreed there is now a greater expectation that all policy terms and conditions are properly considered and evidenced during the investigation of the claim.
2. Is there still a role for the general adjuster in today’s specialist driven market place?
The panel responded to this question with a resounding “yes”, arguing that the broad technical knowledge and management skills brought to a claim by the seasoned adjuster are considered key when investigating large/complex property claims. They added that training offered by individual adjusting firms needs to reflect this market requirement, although they recognised that a different level of expertise may be required for the smaller volume claims.
3. What is more important in today’s climate, a quick and early cash settlement or ensuring full reinstatement and/or replacement?
The answer to this question seemed dependent on the individual case and circumstances. A good
general debate was held on the impact of decisions made on various different claim scenarios, including the potential affect on subrogation actions.
4. There is a perception that insurers are now using a reservation of rights more frequently which can have a significant impact on the management of the claim. Can the panel share their views on this?
In their responses, members of the panel made reference to the AIRMIC initiative allowing 90 days to resolve issues prior to the serving of a reservation of rights. The legal and insurer view was very much that the issue can be worked round without it affecting the investigation of the claim, although the adjuster and claims consultant views were somewhat less in favour. However, communication between all parties was agreed to be key in understanding the meaning and intention of any RoR.
5. Historically, the property loss tends to lead the claim as a whole, with the expertise working alongside that lead adjuster. Given the current economic climate is it about time that the BI Claim led the property claim?
After a healthy debate between the panel members, it was agreed that the skill set of the individuals now handling PDBI claims removes the need for concern as all issues are considered with equal measure in mitigating the loss in accordance with the policy cover available. Poor reserving and a lack of consideration of BI issues may be a thing of the past.
6. Has legislation increased the cost of reinstatement and do brokers / policyholders make proper provision for this when arriving at the declared value?
A potential lack of broker knowledge and technical expertise can create a problem along with an increase in legislative requirements. The issue of underinsurance is a live problem which is recognised by Insurers, particularly when it comes to claims within "blanket" property owners’ policies.
7. To what extent does the panel think that the third party loss adjuster should be involved in the adjustment of the first party claim?
The panel referred to the lessons learned from Buncefield. Speakers accepted that the third party adjuster should be involved in the claim process from a knowledge perspective, but not necessarily in the decision making process. From a legal standpoint the more issues that can be resolved early on during the claim lifecycle will significantly reduce issues and costs later down the line.
8. Insurers’ panels increasingly include more disciplines (such as loss mitigation contractors and forensic accountants) on a mandatory basis with the recent introduction by some insurers of project managers / surveyors. Does the panel believe that the adjuster is in danger of becoming a case manager simply co-ordinating the various suppliers and expertise imposed by the Insurer?
The answers to this question were largely covered in Question 2. However, recognition of the specific expertise required on a claim, including the management contractors is a core activity of the appointed adjuster and a skill that is recognised and required by their principals.
Other Property SIG Presentations
Legal Credit Crunch Field Guide to the Life of a Claim
In this presentation Brendan McCarthy and James Deacon of Beachcroft LLP provide a walk through of a typical claim from first notification to final settlement.
Download Powerpoint Presentation (Powerpoint format, 439Kb)
Download Accompanying Notes (PDF format, 286Kb)
Fraud Red Flags
Robin Wintrip looks at property claims fraud in the current financial climate.
Download Powerpoint Presentation (Powerpoint format, 211Kb)
Discover more with Geographic Intelligence
Sarah Adams and Chris Chambers from Ordnance Survey, sponsors of the CILA's Anti-Fraud SIG, look at how mapping data can significantly improve claims evidence for loss adjusters.
Download Powerpoint Presentation (Powerpoint format, 5.84Mb)