46 0 What is the impact of global pandemic for loss adjusters more than a year on?
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Jun 2021

What is the impact of global pandemic for loss adjusters more than a year on?

Brought to you by:  Sedgwick

The COVID-19 pandemic is still very much alive today and has reached every corner of the globe, more than 16 months since the first outbreak

  Mr James Ong
Sedgwick Asia chief executive officer

 

The knock-on effects of the latest outbreaks and mutated variants of the virus have a far-reaching impact on the global efforts to contain and eradicate the virus. Across Asia many countries, including Malaysia, Thailand, Cambodia, Indonesia, Japan, Singapore and India are faced with their third and fourth wave of infections which in many ways are even more serious than the initial outbreaks in early 2020. Many countries have imposed further lockdowns to contain the raging spread of the virus.

This pandemic has no doubt changed the way we live, work and play, but how, specifically, is it affecting the world of loss adjusting?

Working from home

At the start of the first coronavirus outbreak in early 2020, loss adjusters, like their colleagues in the insurance industry, had little choice but to quickly adapt to work-from-home (WFH) and tele-commuting to ensure business continuity. This was necessitated due to the various lockdowns imposed by governments across Asia. The WFH model had not been without its own challenges but the loss adjusting industry proved to be resilient and acted quickly to adapt different models to serve the needs of their customers.

Eighteen months on, the WFH model has evolved from its initial stage to become a hybrid. There is a now a firm belief amongst claims management businesses that WFH models will become a permanent feature of the way the industry works post-pandemic.

At Sedgwick, we firmly believe that a hybrid WFH model which enables our loss adjusters to deliver the best services to our clients is the way forward. An office which combines ‘smart’ features, socially distanced and safe working spaces, coupled with WFH arrangements is the future of loss adjusting.

The ‘smart’ offices which have evolved have features that allow communal and open ‘hot desk’ working options for those who come into the offices and these working spaces, can be pre-booked through mobile smart apps. Smart office spaces allow for safe social interactions with colleagues and clients that are often missing in a pure WFH model. Loss adjusters therefore have the option to come into the smart offices as and when the need arises for work, meetings or social interactions in a safe environment. The evolution of this change has no doubt driven productivity, contained office rental costs and provides a means to ensure continuity of the industry in the future. The traditional offices of the past are fast becoming irrelevant in the future.

Focusing on the actual experience of our own teams who have been on a WFH arrangement for the last 15 months, the initial feedback at the start of the pandemic was that WFH was disruptive both to their own productivity as well as difficulty in connecting and interacting with fellow colleagues. Many found the shift at the beginning to be a painful and cumbersome process. Some of the factors cited by our colleagues were a lack of adequate work spaces in their own homes, having family and children in the same environment and IT connectivity issues. Being separated from work colleagues and not being able to have a chat, or lunch together and not being able to have personal interactions took a toll on many of our colleagues in the initial stages of WFH.

More than a year later on, the experience has changed for the majority of our teams. They have settled in to a WFH experience which has become the new norm, not only for our industry but across all sectors of the economy. WFH suddenly felt natural as they watched their peers and colleagues across the insurance market as well as the claimants all sharing the same experience. The benefits of a hybrid WFH models was obvious, less commuting time to the office, ease of using video/audio conferencing to connect with clients and claimants who were also no longer in their offices, and producing reports in the comfort of their home have become the new normal. Interactions with colleagues have also improved; sometimes enhanced through the adaptation of various technologies and coupled with the ability to meet in a socially distanced setting occasionally in the office or elsewhere with the gradual easing of lockdowns and the relaxation of social rules and protocols.

The feedback from most of our teams are that they find themselves working harder than they were before the pandemic. This has inevitably driven up productivity and this has helped companies survive the pandemic. Many loss adjusters have concluded that a hybrid WFH model is here to stay and have adapted well to it. This is the silver lining behind the dark pandemic cloud.  

Innovation and digitalisation

Currently the level of innovation and digitalisation in the industry has moved up a gear driven by the fact that most international and regional borders continue to be closed directly impacting the way loss adjusters traditionally deal with losses.

Many major and complex losses have occurred over the last 16 months, but site visits from the two traditional regional centres of Singapore and Hong Kong were not possible due to border closures and strict local lockdown rules, quarantine measures and COVID-19 testing protocols. We noticed that many losses were adjusted and finalised without any site attendance. At Sedgwick we leveraged on our well-connected network of offices across Asia. Loss adjusters from the country or area where the loss occurred stepped up and applied their skill sets to carry out site visits, where possible, and for larger more complex losses, they often acted as the main attending loss adjuster supported by technical specialists based in Singapore.

This new way of working proved to be well accepted by international insurers and reinsurers. The success of this collaboration was mainly driven by the availability of digital tools including digital remote video surveys and digital claims management systems. The loss adjusting industry has innovated to survive and thrive in the pandemic.

The pandemic has also drawn a line between traditional loss adjusting and new emerging claims services. Many insurers are looking to adapt digital technologies to enhance their own service offerings to clients, leverage on technology and manage claims servicing costs. Many insurers are looking to loss adjusters to partner with them in the digital space to deliver fully digitalised end to end claims solutions. The pandemic has certainly accelerated this process.

Role of specialists – forensic accounting

Given the exposure of the insurance industry to the COVID-19 losses in light of the Financial Services Authority court cases in the UK, loss adjusters with expert forensic accounting teams have seen a big increase in the need for their skills.

Forensic accountancy expertise is particularly relevant for the investigation and quantification of COVID-19 related business interruption losses. The forensic accounting team within a claims management organisation also plays a significant role in the adjustment of major and complex losses. Their skill set not only involves quantification of business interruption losses but extends to the quantification of complex financial losses, stock losses and a range of complex fiduciary losses.

Pre-pandemic, our forensic accounting services division colleagues could travel to the loss locations and meet and interact personally with the intermediaries and claimants, however the pandemic has made this impossible. Through the adaptation of new technology, video conferencing, digital remote video surveys and digital collaboration tools, our team were able to add value to major and complex losses working in unison with our country network and major and complex loss specialist. Post pandemic, it appears that this model would work well and has been accepted by many major insurers and reinsurers.

Looking forward

No one knows or can predict when the pandemic will eventually end and allow us to return to a sense of normal activities. Many experts predict that international travel will not return to normal until the end of 2022. There is glimmer of hope with the COVID-19 vaccines now administered to millions of people worldwide.

One thing however is certain. The loss adjusting industry has changed and these changes are here to stay: Hybrid WFH models will be a permanent feature of our operations now and into the future. All things digital in loss adjusting such as digital claims management, digital remote site visits, digital video conferencing are today’s technology. The technology for the future is fast evolving. Sedgwick is already showcasing some of these in our digital offerings such automation, artificial intelligence, robotics, big data analytics, image recognition and processing and end to end claims solutions.

Loss adjusters who are innovative and apply these future digital claims technologies take themselves to the next level and will thrive in the post pandemic world.

James Ong, Chief Executive Officer – Asia
EMAIL james.ong@sedgwick.com

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