Outsourcing of claims functions is occurring at an increasing rate. One insurance claims expert told me that most insurers are not investing in the expertise of younger adjusters but simply outsourcing the details of property insurance adjustment to outside vendors. These outside vendors are neither licensed as insurance adjusters under the control of insurance regulators nor are they trained to appreciate the ethical obligations property insurance adjusters have to the public and especially the insurance customer.
A recent article by McKinsey and Company noted how insurance companies can increase profit by adopting an increased use of outside vendors that future adjusters working from home will manage, rather than do these jobs themselves:
Large insurers have already built some remote-working models and will continue to use them as they navigate the crisis, aiming to move 30 percent of their workforce to this model for the long term. These same companies are also developing methods to support effective remote-workforce performance management, such as dashboards, virtual team rooms, and remote team huddles. Insurers are also identifying the roles and skills needed in the future-state organization, including an outsourcing model of the future. In doing so, they are working to determine how to fill skill gaps through reskilling or strategic external hiring, and reimagining the talent management journey—for instance, how to recruit, onboard, train, and develop the adjusters of the future.
An example of this outsourcing is with Jon Held who has built an amazingly large and deep business helping the insurance industry:
Jonathon C. Held has been with J.S. Held since 1977, and has been President and CEO since 1985. During that period he has overseen the growth of the firm from a small regional two man consulting company into an internationally respected organization with global reach.
Jon has consulted on many of the largest and most complex catastrophic insurance claims in history, including the 1993 and 2001 terrorist attacks on the World Trade Center in NY, the litigation between Firestone Bridgestone and its insurers for damages sustained to the Harbel Rubber plantation during the Liberian Civil War, the AOL Time Warner Center fire in NY, The Amtrak Superstorm Sandy litigation, and many of the world’s most visible claims. He is widely considered the expert of choice in large complex ‘bet the farm’ cases.
With an unparalleled reputation in the dispute resolution arena, Jon has been a panelist in hundreds of claims and was the party appointed appraiser in the four largest claims ever to be resolved in the appraisal process. Throughout his career, he has testified in numerous courts across the United States and has considerable experience as an arbitrator and umpire.
I thought Jon Held was just an amazing advocate for the insurance industry in appraisals and for views regarding construction costs. His firm can now be a one-stop shop to determine the pricing of virtually any type of property insurance claim about which an adjuster will eventually have to make a decision.
We see the same types of outsourcing with numerous other companies, like Ladder Assist. Ladder Assist’s website indicates:
Seek Now was founded in 2012 as Ladder Now when a dream team of professionals made it their mission to provide insurance carriers with a high/steep roof inspection service that was high quality, reliable and unfailingly on-time, thus solving a painful problem in the industry.
Today, our ownership and Board of Directors are made up of a diverse group of professionals with experience in:
• Top 5 Insurance Carrier Operations
• Architectural Engineering
• Enterprise Software Development and Implementation
• National Catastrophe Claims Services
• Top 5 Forensic Engineering/Fire Investigation Services
We find the most talented people, give them access to industry-leading technology and systems and empower them to be their best. In fact, cultivating talent is our founding principle. We commit to our people, which ensures that every Seek Now member shares team pride and takes ownership of each task and claim. That’s why we’re able to provide superior service — because Seek Now team members truly care and want to be the best for themselves and the team.
But we don’t stop there. To us, superior service also means creative innovation, and we were proud to introduce the first “smart routing” dispatch software system to the industry. Through a direct license with Microsoft Bing Maps and the use of a top international software provider, Seek Now is the first company to offer insurance adjusters direct control of our calendar. Because of our advanced technology, the adjuster has the power to call and schedule an insured appointment while viewing our resources and calendar in real-time. Access to our calendar eliminates double bookings and other complications, which means our customers can provide better service for the people they insure.
And by the way – our on-time arrival ratio was greater than 98% on nearly 150,000 claims in 2018. To us, the customer satisfaction that comes with that ratio is both a reward and a motivator. We love making our customers happy. That’s why we always arrive 10 minutes early (but not in front of the loss!).
Our proven methods, commitment to excellence and diverse team of professionals are what set Seek Now apart. We were the market leader in 2019, and we are truly the next generation in Complete Claim Inspection Solutions.
To some, this advertising of services sounds more like an unlicensed independent adjustment firm.
I expect that other outsourcing firms servicing the needs of the insurance claims industry will adopt the models of JS Held and Ladder Assist. Whether insurance regulators take notice or even care about this claims operation change is another topic. However, when you buy insurance from Liberty Mutual or any other company, you certainly did not envision having to deal with claim surrogates rather than the company that sold the insurance contract.
Thought For The Day
Reforms are needed to stem the tide of outsourcing good jobs to other nations and to educate and train American workers to meet the challenges of the 21st-century world economy.
—Martin Luther King III