Institute of Loss Adjusters of South Africa
Prepared as a Study Guide for the Institute of Loss Adjusters of Southern Africa
First Edition by Brian Wright ACII FILA 1994
2022
There are many publications providing information on how to write technical reports, on the correct usage of the English language, and how to deal with just about every conceivable issue and eventually likely to be encountered when preparing various types of reports. Information on the preparation of reports by loss adjusters in the insurance claims environment is, however, woefully lacking.
The new arrival to the loss adjusting fraternity is often expected to learn the skill of report writing by a process of osmosis. A combination of mentorship, the study of past report (invariably considered as masterpieces by the mentor) and a humiliating period of having one’s reports corrected and grammatically torn to pieces, eventually sees some form of style and structuring emerging. Often the trainee does not know, for quite some time, why a report is to be structured in a particular manner, what should and should not be said and finally, how the information gleaned through investigation andnegotiationshould bepresented. Depending on how traumaticthe “apprenticeship phase”of the report writer has been, many intelligent and talented loss adjusters develop a healthy dislike for possibly the most important stage of the claims handling process, the report. Bad habits acquired during the trainee’s formative years become ingrained and are often compounded due to sheer pressure and performance criteria.
There are many different styles and methods of report presentation in current day use. The suggestions contained in this manual are best described as a combination of formats and styles taken from various insurance markets. It is not intended to prescribe or attempt to enforce a particular stye by which reports should be written. Rather it is hoped that this book will provide aspirant adjusters with a benchmark to develop from and, more importantly, and educational medium to speed up the trainees “process of osmosis” referred to earlier. Furthermore, no attempt is being made to teach investigative adjusting or language skills.
One assumption has been made and that is that the reader of this manual has a genuine desire to improve his or her report writing skills and is prepared to “go that extra mile” which separates the professional from the mediocre and incompetent.
CHAPTER 1 - INTRODUCTION TO REPORT WRITING
Insurers’
The Claims Handling Process
CLAIMS--------------------
Status Reports------------------------------------------------------------------------------------------------------------------------------
CHAPTER 2 - THE STRUCTURE OF A REPORT
Overview of the Report
Content of Reports------------------------------------------------------------------------------------------------------------------------
Process
The Claims Section of The Report-----------------------------------------------------------------------------------------------------
The Intention of Interim Reports------------------------------------------------------------------------------------------------------
Photographs
Sample Status Report
CHAPTER 4 - FINAL REPORTS
The Structure of Final Reports
To be aware of the current day claims environment.
To determine what Insurers’ and Underwriters’ needs are.
To consider the claims handling process.
To be aware of report distribution and privileged document procedures
Whatthecomputerwillneverreplace,isoriginalthoughtandtheabilitytoconveyseemingly vastamountsofinformationinawell-structured,coherentreportwiththenuancesofthe casebeingeffectivelypresented.
Notwithstandingthis,theworld-widedemandforefficientservice,greaterstandardsof education,specialisation,andfinally,theneedtoperformeffectively,willincreasethe pressureonlossadjusters.
Competitiveedgeisgainedbyvastdifferencesintechnicalskillsbetweenonadjustingoffice andtheother.Entrylevelstotheprofessiondemandahighleveloftechnicalskillasabasic requirement.Theedgeoncompetitorsisearnedbysmallbutregularincrementalgainsin areassuchasinnovation,effectivenessandmostimportant,efficiencyandskillinthe communicationprocess Insurers’NeedsandTheClaimsEnvironment ToformulateanintelligentappraisalofInsurers’andUnderwriters’needsasitconcernsinput fromLossAdjusters,onemustconsiderthepressureInsurers’managementandtheirclaims teamsaresubjecttodaily:-
Figure1.1
Insurerspromisesandofcoursethebottom-lineresultdriveseverybody.Inshort, UnderwritersandInsurerswhoemploylossadjusterssimplydonothavethetimeand financialleewaytotreateveryclaimasaminisagaorinvestigativemasterpiece.
NotwithstandingthepressurebroughttobearinInsurersandUnderwriters,theinvestigation andadjustmentofclaimstakestime.Claimshandlingisaprocesswhichcannotbecompleted
in a matter of a day or two. Despite modern day communication facilities, it is against the clock that the loss adjuster ultimately pits himself and the only method by which theadjuster can buy time is effective communication with those involved in the process.
It is in this area of effective communication that the loss adjuster often falls short. How often does the adjuster or claims handler sit back and think along the following lines:
How can I make my principals’ life easier?
Is my report the most efficient way of communicating?
Is my report padded, too long, or simple enough?
The key to effective communication is determining what your customer really needs. Often adjusters have their own comfortable style of reporting and proceed regardless of whether it is what the Insurer or Underwriters really wants.
So, what does the Insurer or Underwriter really want from their loss adjuster in the reporting and communication process? It’s very simple really:
Claims personnel greatly value the adjuster who reports promptly, advises them of all developments timeously and prevents them from being “on the back foot” when dealing with queries from Insureds and their brokers or assessors.
Busy claims personnel should be provided with report that facilitate efficient identification and marrying of the report to their records. Furthermore, a wellstructured and titled report makes for easy reference and handling.
Reports that contain short complete sentences and paragraphs invariably flow well. Furthermore, the possibility of ambiguity arising in the content of the report is reduced. Simple everyday usage of English (slang, profanity and jargon excluded) enhances the quality of the communication.
The writer of the report must know what result should be achieved, provide the requisite information to reach such a result and above all, never leave readers of the report in apposition where they do not understand the purpose of the report or are unable to make a decision.
Correct estimating and efficient recording of interim payments, outstanding reserves and any possible salvage or recovery is a vital function in the reporting context.
Oftentrainees,andindeedrelativelyexperiencedadjusters,donotunderstandtheprocess ofhandlingclaims.Someoverworkclaimswhichshouldbesettledquicklyandefficiently,and othersunderworkclaimswhichrequirealotmoreinput.Itisinthisareathatthe effectivenessoftheadjusterisevident.
Itisnotefficient,andcertainlynotcosteffective,toprovideaprincipalwiththreereports, fourlettersandholdfivetelephoneconversationswiththeclaimhandlertodispensewitha small,simpleclaim.Ontheotherhand,anInsurerisquitelikelytohavesomedifficultyin settlingamulti-millionrandclaimifonlyprovidedwithone5-pagereport.Achievingthe correctbalanceofprovidingone’sprincipalwiththerightamountofinformationtosettlethe claimonhand,shouldbeeveryadjuster’sobjective.
Anattemptismadehereundertodetailtheclaimhandlingandcommunicationsequencefor differentsizesorcategoriesofclaims.Recognitionmustbegiventothefactthatnotevery claimproceedsaccordingtoplan;therearealwaysexceptions.
InsurersandUnderwritersrequirefastandcost-effectiveclaimhandling.Simplystated,a claiminthiscategorycannotwithstandhoursuponhoursofinput.Theprocesslooks somethinglikethis:-
handlingclaimsanddisoftenencounteredinawholesalelossadjustingenvironment,iegroup schemesetc
SomeInsurers,however,prefertobeactivelyinvolvedinthemanagementoftheirclaims. TheprocessoutlinedinFigure1.3requiresadditionalinputwhichhastheeffectofmaking thesettlementoftheclaimlessefficientbutgivesInsurerstheassurancethatthematteris beinghandledcorrectly.
Itwouldbenaïvetoexpecteachandeveryclaimtofollowthesamepatternwithoutproblems occurring.Ifdifficultiesareencountered,thesoundadjusteranticipateswhattheseproblems mightbeandconsultswiththeInsurer,obtainingtheirviewsandinstructionsbeforehand.
Whilstefficiencyandcosteffectivenessarefactorswhichmustalwaysbeborneinmind,itis acceptedthattheclaimshandlingprocesstakestimeandthataneedexistsforreferralsback totheInsurerforpossibleguidanceandinstruction.Inthisscenario,theprocesswilloften takethefollowingcourse:
Somecasestaketimetofinalise,particularlyliabilityclaims.Thereareoftenperiodsof monthspassingwithoutmuchactivityonafiletakingplace.Inthesecircumstancesitisoften advisabletosubmitaregularStatusReport.Thisreportistwo-orthree-pagedocument commentingonthestatusoftheclaim,i.e.,shouldtherebeanincreaseordecreasein estimatesortheneedtomakeinterimpaymentsetc.
AstheInsurerispayingfortheservicesprovidedbytheadjuster,thefileanditscontents,
distributethereportastheyfit.Thegeneralrulesrelatingtodistributionofanadjustors reportaresummarisedhereunder:-
….Reports from loss adjusters and assessors are a tricky category of documents for the purposes of assessing privilege. By their nature they are often multi-purpose and created at a time when a dispute is possible, but not certain.
Where the dominant purpose of the document is to enable the insurer to make a decision on whether or not to accept the claim, it will not be protected by privilege.
Documents have been treated as privileged:
1. In the context of a fire claim, after insurers received advice that arson was reasonably suspected and engaged counsel.2
2. Afterthe insurerhadmade atentativedecision to decline the claim and advised the insured of its likely decision.3
Practicallyspeaking,having reportsaddressed toasolicitordoesnotnecessarily assist,4 but where the advice in question has clearly been sought to enable the insurer’s solicitor to draft or defend proceedings, it is more likely to be protected by privilege. This can be done in the form of instructions sent to the loss adjuster or expert, which should be clear about the purpose and the content of the advice being sought. Where advice is being sought for more than one purpose, it may be useful to prepare separate reports.
Where the insurer communicates through an investigator with its lawyer, the communications may also be subject to legal professional privilege. This is a communication forthepurpose of obtaining legaladvice. However,this only applies where the insurer has appointed the investigator as their agent rather than as an independent contractor.5
.
Therefore, a loss adjusters report is only privileged if confirmed by the Insurer’s attorney.
In order to create further privilege for legal purposes, loss adjusters should ensure that their expert reports, photographs and any other supporting information is contained in an Annexuretothereportand clearlylabelled. Whencompilingthereport,eachsupportingitem should be referenced rather than included in the report.