It’s Not in the Textbook

“A man may be full of technical knowledge and yet cut a very indifferent figure as an adjuster.”

My grandfather, P. Ormond Jones, used these words to open his remarks to the Chartered Institute of Loss Adjusters in London on Mar. 13, 1951. Sixty years later, I was curious: are his comments still applicable today? Surprisingly, yes.

I come to this conclusion while acknowledging my grandfather’s observation is the product of a man who saw Queen Victoria when he was a boy. As a young man, my grandfather visited fire scenes dressed in a velvet collared frock coat and silk top hat.

While my grandfather’s talk covered a range of topics, I will concentrate on several aspects related to the personality of the adjuster.

The Adjuster’s Personality

In his speech, my grandfather said “no degree of technical skill can offset certain…defects (in the adjusters temperament) if they exist. An adjuster is not employed by companies or underwriters to indulge in the luxury of showing resentment if he receives provocation. It is not his business to match retort with retort, and the more he can make himself impervious to the things which irritate him – and sometimes intended to irritate him – the better for all concerned. We are not schoolmasters to rebuke bad manners or teach good ones.”

I admit, as did my grandfather before me, to the humbling experience of living down an ill-advised, but momentarily satisfying remark. As my grandfather said, “our principals are not likely to be much impressed when they get a letter of complaint, however unjustified the claimant may be, if the explanation really is that the insured got no more than he deserved.”

An adjuster’s ‘temperamental defects’ may not be inbred or permanent, but simply the inability to put out of mind the stress of a bad morning, heavy traffic or missed lunch. A claim that starts well tends to end well, or as well as can be expected. The cultivation of an equitable professional demeanour is as essential now as it was then.

The Adjuster’s Responsibility

My grandfather believed adjusters should accept full responsibility for making their own decisions. As he put it in his speech: “The adjuster should always take to the full the responsibilities which fairly devolve upon him, and not attempt to pass them on to the (instructing) office. I hold it to be the unmistakable duty of the adjuster to indicate what in his opinion is the proper line (of enquiry) to pursue. It seems to be both weak and unjustifiable merely to recite the difficulties and ask for instructions. Surely an underwriter is entitled to something better than that. The adjuster must not presume to dictate the decision, but the onus is upon him to advise.”

Unless the adjuster’s retainer specifically excludes comments on coverage or procedure, there is now, as there was then, a responsibility to offer an opinion, all the while being cautious not to paint one’s principals into a corner.  Adjusters often court failure when they are unwilling to think critically or creatively, and when they do not trawl through all the permutations and possibilities to arrive at an informed opinion.

On Compromise

All adjusters have faced or will at some time face the dilemma of whether or not to compromise or stand firm. “A wise compromise may often be justified, but it should not be the compromise of weakness,” my grandfather said. “The test of a wise compromise, in my judgment, is that if the adjuster can say to his own conscience that if he were underwriting with his own money and that money were at stake, he would compromise on the terms available, then he should compromise. But if the answer is in the negative, it is weakness approaching cowardice for him to give way.”

I can’t think of a better test.

On setting the Reserve

Few things cause even the most experienced adjuster more anxiety than deciding a reasonable figure on which to return the loss or set the reserve, my grandfather observed. “With many losses, the adjuster has the necessary material on which to form a reasonably reliable judgment…but on others it is not easy. If the loss is serious, at least you know the policy cannot pay more. But I regard it as an act of weakness to return a total loss when you do not believe it is a total, but are merely playing for safety. Certainly be pessimistic and avoid wishful thinking, but make no further concessions to weakness, for weakness I think it is.”

Obviously little has changed since my grandfather said this. The challenge remains of reasonably forecasting what sum may eventually be paid when, literally, the smoke has not cleared. Sometimes it’s necessary to say fixing a reliable reserve is premature. Too frequently adjusters rush to judgment or carelessly throw out a figure that has to be significantly revised later, to the embarrassment of the adjuster and to the detriment of all involved.  Reporting

My grandfather stressed the importance of the adjuster’s role as a communicator. “An adjuster who can’t report is like an architect who can’t draw,” he said. “Long experience has led me to the conclusion that it is generally more difficult to train a young man in what I would call the art of reporting than to give him at least a working knowledge of the more essential rules of practical adjustment.”

One essential component of a good report is that it should be self-explanatory, my grandfather said. “If it fails in that, I do not hesitate to call it a thoroughly bad report,” he said. “Can anything be more exasperating…than to get an adjuster’s report that has to be read not once or twice, but several times in order to be sure precisely what the writer means? It would infuriate me to be compelled to take up a pencil and put down figures in order to ascertain what was the adjustment.”

If it is necessary to refer to documents, my grandfather added, they “should be so clearly identified that they can be turned up at once without a search through a mass of other papers.”

An adjuster is in the communication business. He or she collects, analyzes and reports information. Despite great changes in communications technology – my grandfather did not live long enough to see the commercial introduction of the fax machine, let alone e-mail or text messages – nothing has changed. A good report covering all the issues in a concise, factual and balanced way with organized attachments is rare and, unfortunately, often undervalued.

The contemporary mantra of “faster, cheaper, better” can backfire if the report is an ill-thought-out data dump that is hastily digested and triggers thoughtless action. Obviously the preference would be for a carefully contemplated, concise and well-argued piece of prose to provide the basis for well-considered decisions and actions.

Hasty reports can lead to lack of vision, confusion, a need for clarification and perhaps backtracking. This is not an efficient or effective way of doing business.

As any adjuster can tell you, rattling off a rambling, verbose three-page report is easy. It’s far more difficult, intellectually challenging and time-consuming to condense it to one page of well-written text.

Ironically, the adjuster who does produce that concise, well-thought-out and well-written report runs the risk of criticism for spending what on the face of it appears to be a disproportionate amount of time on a short piece of prose.

I will leave it to grandfather to have the last words on reports: “Frame your report as though you had to meet a fair but possibly critical reader. Do not, on any account, omit to mention facts that, if known, would dispose of the reader’s doubts. The knowledge in your own mind is useful to you, but possibly to no one else in the world, so far as its informative qualities are concerned.”

Were my grandfather able to speak to a similar audience today, I suspect that h is original remarks would stand the test of time.