In the drive to efficiency, generalists are being called upon to do some very specific adjusting. That may have its downside, writes David Porter of Granite Claims Solutions
As I made my way to another appraisal recently, I gave thought to the rise in the number of files that go sideways. I’m not complaining about the work, but as a student of our business and product, I gave pause for thought.
Allow me to muse; and as I do, I invite you to ponder and form some thoughts of your own. I’m not sure we’ll reach any conclusions in this modest space, but it may lead to a different perspective. I started my examination with demographics from two angles. The first is easy: the consumer has developed high expectations, sometimes sprinkled gingerly with some cynicism. But that seems to me to be more a symptom, or a consequence, of some of our futility in managing those expectations.
More so, I see a workforce that is different. Not better or worse than 25 years ago, just different. One that values life away from the job. One that is prepared to do the work, but is perhaps less likely to be a full-fledged student of insurance. Combined with losses of increasing complexity and a drive to control expense, perhaps we are pushing beyond common sense. Are we asking too much of the general adjuster to handle a loss of a niche level of difficulty? Invariably, mistakes occur but their frequency will increase when we turn to a normally competent professional who isn’t equipped with the skill set required for the loss.
Lawyers don’t step outside their area of expertise and by commoditizing too much of our industry, we lose the ability to satisfy our customers and properly control indemnity simultaneously. The trend to turn to a single provider of service is a natural response to increasing pressure to control costs and to reduce the burden on insurers by making one call to the vendor for all wrinkles.
This leads to delegation of responsibilities, but do we do so blindly to our own detriment? I had an adjuster bring me a niche claim file the other day where the adjustment was handled by a preferred national firm, despite their lack of expertise in the market. The result was wasted indemnity to the tune of $30,000. And the insurer is none the wiser — they don’t know because their own staff aren’t experts in the field.
In this instance, the policy holder hasn’t directly suffered (although we all do through increased premiums). But I see it on first-party losses where the adjuster (who might otherwise be good and clearly means well) is simply over their head. It’s soon too late to rectify the insurer’s view that the claim is inflated and lines in the sand are drawn. It’s a nasty circle. There is insufficient time to learn all there is to know to be able to efficiently handle every file that comes in a world of consolidation. And the time taken to learn is often seen as a hindrance to dealing with files and earning an income.
I applaud the individuals who invest in themselves and the companies (insurers, brokers and adjusting firms alike) that make the commitment. But some of that education is wasted when we don’t get the risks and the losses to the right professionals. Which brings me to the question begged throughout: If we slowed down a bit and handled these losses properly, would we return to a world with fewer appraisals and would the savings justify the cost? Anyone know an actuary?
David Porter is the VP Western Region, Granite Claims Solutions
