We have all seen the accusation too many times - the claims
department is dragging its feet over a legitimate claim. The
policyholder is frustrated, the broker is of little help and the
underwriter appears to be uncaring and intransigent.
Sadly the soft insurance cycle produces this kind of behaviour.
Claims payment is sometimes delayed, either by design or via a murky
sea of administration and bureaucracy.
The role of the loss adjuster in this cycle is little understood.
Our fraternity is often viewed by claimants as the front line of an
underwriter's defence - a defence that is designed not to pay claims.
While loss adjusters do indeed work for underwriters -
the role is positive and aimed at smoothing the claims process.
In 30 years my job has been most satisfying when we've been able
to play a proactive and decisive role in the paying of valid claims.
We have seen many livelihoods and business destroyed by catastrophic
loss, and delays in the receiving of insurance payments often adds to
the sense of loss experienced by claimants.
However when the underwriter, acting on swift and accurate
information from his adjuster can make a swift settlement, the whole
process affirms the continuing integrity of the system. This is the crux
of the insurance offering - the ability to provide powerful economic,
financial and social value in a situation of profound loss.
Unfortunately few consumers or commercial buyers of insurance see
the process like this: they view insurance as a necessary evil and the
underwriter and his loss adjuster as the bad guys. This is still true today
but things are changing.
Interim payments to claimants are becoming more practised in some
markets as insurers are increasingly recognising that nothing beats
a moment in time like when a claim payment cheque is handed to a
policyholder needing urgent funds to keep his customers.
We believe an insurer should be judged on the quality of the service
just like any other part of the financial services sector. Interim payments
are able to make a difference - in particular where there is cover for
time elements; such covers seem to be on the upward trend.
Although there is no industry benchmarking or formal rules on industry
payments, the rule of the thumb can be 50% or higher of what can be
supported or will ultimately be paid. In order for this to happen, the
adjuster has to move with speed to establish there is no information
available to suggest there is anything untoward about the incident
so that underwriters will feel comfortable in releasing
The industry has for understandable reasons not promoted this part of
the business. However, we can see a time when underwriters, acting on
the professional advice of their loss adjuster, will pay interim claims
speedily in cases in which it is needed most or even where there is no
policy endorsement to cater for interim payments.
Once this side of our business is more widely known, the perception
that our industry survives by delay and deny will surely change.
Nehemiah Neo, Insight Loss Adjusters, Managing Director