One of the biggest threats to claims adjusters in America is the increasingly litigious landscape that has come from measures like litigation funding, argued William (Liam) Richards (pictured), CEO of Arete Adjusting.
“Claims costs are at the top of all insurance lines at the moment, everyone’s trying to cut down on legal expenses, and even TPA costs, wherever they can,” he said.
“That’s a very competitive space right now and trying to compete with the major players in the field is going to be a challenge.”
Arete Adjusting is a startup that recently launched operations in North America, fixing its sight on the marine and logistics insurance market.
“Being a startup, we don’t have that foundation that our competitors may have,” Richards said.
“But we’re a new player that is reacting to the current needs of North America and finding solutions to solve very specific problems.”
Aside from social inflation and the general push towards mending its fiscal implications, the CEO is also concerned about the dearth of talent the industry is experiencing, especially for more niche operations like Arete.
“There’s only so many claims’ adjusters, underwriters, even surveyors in this space who know what they need to do,” he said.
“What that means is we’re going to have to train a new generation, not just Arete, but the entire industry of insurance professionals who want to find the space attractive, and more importantly, want to stay in it.”
In an interview with Insurance Business, Richards spoke about why North America was a prime market to expand into for marine and logistics insurance claims and what intelligent adjusting means.
The main reason behind Richards’ decision to enter North America was because the market was calling for change.
“Our team has worked with a lot of underwriters, brokers and insureds who are in the logistics and marine space, and they’re currently not happy,” he said.
“They’re not happy with the claim service and also the claims data that comes out with their risks.”
For insureds specifically, there is a general lack of understanding about the limitations of insurance and claims and how that impacts their business in the event of a loss.
“They feel that they’ve been left hanging out to dry when it comes to managing their claims. They’re a little bit hesitant or might not have the right kind of expertise,” Richards said.
“Especially in the marine and logistics space - it is quite difficult to find knowledgeable claims people, as there doesn’t really seem to be a lot of resources available to the insured when handling that claim.”
Additionally, brokers can also benefit from increased claims clarity when trying to deliver elevated customer service during a loss event.
“Even brokers can be confused on how to best help the insured based on the loss ratios and the claims data that comes out between insurance and claimants,” Richards said.
“If you speak to brokers, I’m sure they’ll say that claims data is definitely an area that needs improvement.”
For Richards, getting the claims experience precise for marine and logistics is the first step.
“However, we will eventually want to move into the cyber liability and workers’ comp spaces,” he said.
Richards boldly stated that for claims adjustors to better serve their clientele, they need to focus on intelligent adjusting.
“It’s more than just accurate or quick analysis of a loss event, finding a resolution and communicating effectively with parties,” he said.
“Instead, it’s about getting ahead of the situation — being proactive rather than reactive.”
What that means to Richards is using claims insight to better forecast and impact how carriers, brokers and underwriters decide to take on a client.
“By looking at the data that we have on claims and the systems that you use, you should be able to better isolate these kinds of trends and then offer insights during the application process to avoid taking on a risky client,” he said.
The CEO pointed specifically to the rampant motor carrier fraud in the US and how many insurance professionals did not have specific policy wordings that may help pinpoint bad faith actors, especially since they are purchasing legitimate motor carrier companies to engage in fraudulent activity.
“Most of the underwriters we have worked with haven’t asked a motor carrier owner if there’s been a change in ownership in the last year, because that can be an indicator of a fraudster at work. It is certainly prudent to ask with these rising trends,” he said.
“Making sure that these underwriters have claims data that is effectively communicated to them and they’re able to digest within a couple of minutes is extremely important so they can do their job better.”
