Managing the Adjustment of a Major
Catastrophe Loss
Thursday 14th May 2015
Your Presenters...
Gary Brown
Anthony “Nino”
Scariano
Jim Podesva
President/Chief
Operating Officer
Senior Executive
General Adjuster
Senior Executive
General Adjuster/
Vice President
2
SCENARIO
Imagine a large multinational company that
makes many things –
especially BEER. They
sustain wide area damage to
many of their facilities when
a hurricane hits the Eastern
Seaboard of the United
States damaging
manufacturing, real estate,
and all manner of
property....
INITIAL MEASURES
What are the
things that need
to happen as
soon as the loss
notice comes
in...
INITIAL MEASURES
Who will be the Loss
Adjuster? Is there a
designated adjuster
or adjusting firm in
the policy? Will the
market appoint the
adjuster, or even a
co-adjuster? Can
the broker appoint
an adjuster?
INITIAL MEASURES
• First contact with insured, broker, and or
claim perpetration firm;
• Determine locations and severity;
• Advise on mitigation aspects;
• Do you need to look at ALL locations;
• Obtain copies of the policy and identify
variances;
• Provide preliminary advise to the market
and seek confirmation and instruction on
claim management strategy;
Planning
On a loss of this magnitude,
the Loss Adjuster will: (1)
manage the investigation of
the claim to develop the
information needed to
measure the loss under the
policy; (2) provide clear
communication to the insured
and the insurers documenting
the adjustment process; (3)
assist the insurers in
developing settlement
strategies...
SELECTION/MANAGEMENT OF EXPERTS
• How to determine if experts are
needed?
• When do you engage the expert?
• How to reach agreement when
specific insurers have a “favorite.”
• How will the adjuster manage the
experts activity
• Budgets – Fee funds
• Communications with the
insured
• Communications with the
insurers
• The over-zealous and underzealous expert
STEERING COMMITTEES
• Deciding if you need one?
• Who will be on the steering committee?
• What will their responsibilities be...
• Approval of fees?
• Approve correspondence with insured?
• Make decisions on quantum and
coverage?
MARKET MEETINGS
• When do you need to
have a market meeting;
• Can you accomplish the
goal with a conference
call or a “dial-in
meeting;”
• Location for the market
meeting when your
insurers are on different
continents
• “Preview” key issues
MARKET MEETINGS
When it looks like
the market might
“split”...
MEASURING THE PROPERTY DAMAGE
•
•
•
•
•
•
The adjusters and experts responsibilities;
Clearly define the experts assignment;
Determine the most critical locations;
Completing the inspections of the loss locations;
Completing an active measurement of the loss;
Its all about the SCOPE;
MEASURING THE PROPERTY DAMAGE
•
•
•
•
•
When to use a clerk of the works;
Identifying issues and obtaining resolution ASAP;
Managing and documenting the results;
Review and management of expectations
Partial agreements and partial payments.
MEASURING THE TIME ELEMENT LOSS
• The adjusters and experts responsibilities;
• Clearly define the experts assignment;
• Challenges when working with the insured’s claim
preparer;
• Completing and active measurement of the loss;
• Determining Critical Path – Use of Extraordinary
expense coverage
MEASURING THE TIME ELEMENT LOSS
• Issues with multi-locations interdependencies and
make-up;
• Managing and documenting the results;
• Partial agreements and partial payments.
SPECIAL CIRCUMSTANCES
• Captives and captive managers -• Who is the adjuster working for?
• Do you need a separate adjuster if you are a
reinsurer?
• What are the licensing requirements?
• Claim preparation firms—
• Who determines if their fees are reasonable?
• What to do when they seem to go beyond the
scope of a claim preparer?
SPECIAL CIRCUMSTANCES
• Losses in countries outside the U.S.A.
• Local policies, rules, regulations
• Payments in other countries.
WORKING WITH COUNSEL
In many cases, the insurers will
engage counsel to review coverage
issues that might occur, there will
be more than one firm, and on
occasion there are multiple
attorneys from a single firm.
In subrogation matters, you can
have instances when there are
multiple firms because of
agreements between carriers and
law firms.
SETTLEMENT STRATEGIES
• The routine adjustment when the insured agrees
with the adjusters and experts calculations;
• Isolate the areas of disagreement
• Bifurcate coverage issues from quantum issues
• Using the broker’s relationship with the insured
• Sometimes brokers try to “divide and concur...”;
• When to have a meeting with the insurers and the
insured
It comes down to...
• Plan and Execute
• Communicate
• Managing Expectations
WHAT TO DO WHEN ALL ELSE FAILS