Making a Name for Adjusters

Like a team of surgeons straight out of “ER”, claims adjusters find themselves on the frontlines of the insurance industry, answering the “code red” with instruments ready to resuscitate the industry’s flagging public image. At no time in recent memory has consumer confidence been at such a low. But, as Ontario Insurance Adjusters Association (OIAA) president Spencer Bailey notes, claims professionals are ready to “revive the patient” and show the true value of insurance to policyholders.

When it comes to the industry’s tarnished image – the result largely of auto insurance rate increases – Bailey says, “adjusters are actually going to have the most important role in improving that image”.

But meeting rising customer demands is nothing new for claims professionals, he adds. “As adjusters, we’ve always been on the frontline of the industry’s image. We’ve always been in front of a consumer that’s anxious – they want to know what’s going to happen, they want payment right away.”

WELCOME MAT

Bailey himself has been helping policyholders face losses for almost 15 years. It was “all in the genes”, as he followed his father, W. Douglas Bailey, into the adjusting profession after graduating from Mohawk College’s insurance program in 1990. His first job was with the former Morden & Helwig (which later became Cunningham Lindsey) at its Mississauga office. He stayed with Cunningham Lindsey until mid-2003 when he made the move to Shumka Craig & Moore Adjusters Canada Ltd. to open their Barrie office. Most recently he took over as manager of SCM’s Burlington office.

Bailey also followed in his father’s footsteps in becoming involved with the OIAA, as a delegate from Windsor in 1997. The elder Bailey had served as OIAA president in 1977. The son has risen quickly through the ranks of the OIAA’s executive and has taken on a variety of challenges, including revamping the association website and helping to create the job fair which was so successful at the Claims 2004 trade show.

Bailey reports that the job fair, which saw the OIAA foot the bill for college students in insurance-related courses to come to the annual trade show and meet with industry professionals to learn more about a career in claims, will be repeated at Claims 2005 in February. “There is a shortage of skilled adjusters,” he acknowledges, and the OIAA, as well as the Insurance Institute of Canada (IIC) are focusing many resources on trying to attract young people into the business. Bailey says colleges such as Mohawk and Fanshawe are seeing the results in their insurance-specific course enrolment.

NEW EXPECTATIONS

This new talent is all the more critical in the current environment where consumers are reticent about the industry, but also with competition increasing amongst carriers, a scenario which should prompt insurers to invest in claims excellence, Bailey asserts. “As much as insurers are trying to cut claims costs, [public] image isn’t something you can measure on a balance sheet,” he says. “With more mergers & acquisitions, competition will really come down to claims handling.”

He points to the Financial Services Commission of Ontario (FSCO) claims survey which shows, even in the wake of rate increases and other public unrest over insurance, claims satisfaction remains very high. The most recent survey, issued in October, showed 85% of claimants surveyed were satisfied with service levels. Respondents were particularly satisfied with the timeliness and the level of helpfulness offered during the claims process, but high marks were also given for claim handlers’ expertise and fairness.

Claims are key to showing consumers the value of insurance, Bailey asserts. “That’s when they see what the product is they’ve purchased. Satisfaction surveys show we’re on the frontline of helping [improve] that image [with consumers].”

Adjusters will have even greater hoops to jump through in meeting the expectations of consumers, both in personal and commercial lines, in the future. Although claims frequency has dropped in recent years, Bailey predicts this trend may reverse if rates begin to decline – the fear of a rate increase which could be holding policyholders back from filing a claim may lessen with the onset of soft market pricing. Even if frequency does not rise, adjusters will still have their hands full with the ongoing process of auto reform, which began over two years ago and has continued right up to the recent announcement that Ontario’s designated assessment centers will be eliminated in 2005. Added to this are the rise of “chronic pain” claims being filed, and an expected upswing in tort generally, Bailey notes.

The other “hot topic” in 2004, new federal privacy legislation, also continues to challenge adjusters. While the privacy commission has not registered any complaints against claims handlers that he is aware of, he says the legislation’s constraints on disclosure of information have changed the way business is done. Information sharing between different groups is “non-existent” in many cases, he comments, and in situations where adjusters used to be able to “just call up and get information”, such as police reports, these lines of open communication have all but disappeared. This means adjusters must get out to claims sites very quickly to get consent forms signed by parties involved to the claim, Bailey explains. He hopes that early signals from the federal Privacy Commission bear out – if the intention in using information is to wrap up a claim as quickly and fairly as possible, then it is unlikely anyone will face fines, he says. The association helped members become fully aware of the new legislation and its requirements, he adds, and will tackle “privacy: one year later” at its upcoming trade show.

INDEPENDENT ANALYSIS

With an eye to 2005, Bailey says the OIAA’s membership will face new issues with the expectation of growing consolidation within insurance company ranks. The recent purchase of Allianz Canada by ING is perceived by analysts as a forerunner of mergers and acquisitions to come in 2005. M&A is “probably the number one issue” facing adjusters – for independents, this means a shrinking pool of clients; for staff adjusters, this means dealing with all of the turmoil of merging operations. Clients will accept nothing less than 24/7 service, 365 days a year, with full technological capabilities to track and manage claims down to the minute, Bailey comments, so both staff and independent adjusters will need to stay on their toes to meet rising expectations in an increasingly shrinking industry.

And there is a growing need for more “generalist” skills amongst adjusters in the current environment, he adds. With the drop in claims frequency, adjusters must be able to adapt to different circumstances. “Skill sets are changing again,” he says, and the intense specialization seen over the past several years is giving way to more generalization.

Independents such as Bailey have adapted to the downturn in frequency and diminishing pool of insurer clients, turning their attention to corporations whose risk management departments took on high self-insured retentions as an antidote to hard market pricing, and seeking claims business on a more direct basis with these clients.

ANSWERING THE CALL

Even with lower frequency, Bailey says it has come as a relief not to hear of widespread layoffs. The association feared a decline in membership would follow the downturn in claims, but membership has actually grown over the past three to four years, and now stands at about 1,900 strong. It also now includes some risk managers who handle claims.

Bailey plans to highlight the organization and its members to a greater degree during the remainder of his term as president. He has already seen the impact of work done on the website, as well as the association’s magazine, and the trade show continues to grow. Fortifying these forums for marketing the association w ill lead right into the 75th anniversary celebration, which will run for the entire year beginning in July, he explains.

The OIAA will also be doing even more to help its members face the challenges of the current market. “We entered this year thinking it was time to sharpen old skills and learn new skills,” he says of the need for the OIAA to respond to adjusters who formerly specialized only in such areas as bodily injury/accident benefits or physical damage auto claims, moving into more general adjusting to accommodate the downturn in claims activity.

Despite the hurdles adjusters have and continue to face as a result of an insurance market in transition, Bailey stresses that his membership has proven its value to the industry and policyholders alike. “We’ve responded,” he says confidently.