Insurance industry lacks loss adjusters

Insurance firms are bemoaning the absence of sufficient licenced independent loss adjusters in the country, which has the tendency to push up the cost of claims.

Currently, most insurance companies have turned to the services of foreign loss adjusters to handle claims for them, especially in large-claim cases.

A loss adjuster is an insurance professional whose area of expertise is to investigate, negotiate and help to settle claims, especially the complex or contentious claims on behalf of insurance companies, and also help policyholders restore their property to full working order.

The Director of the Ghana Insurance College, Justice Ofori, explained to the B&FT in an interview that the absence of loss adjusters impacts negatively on the cost of handling claims in the country.

“I wouldn’t say the absence of loss adjusters is killing the industry, but I would say it is injuring the industry. This is because claims are the largest expenditure of every insurance company and most of the time we fail to recognise that for every insurance company, their biggest expenditure is claims.

“So if we are not doing the right thing, we would be causing harm to the industry. Apart from the property industry, there are some claims you probably don’t have to pay but you end up paying because you didn’t have good expertise.

“Sometimes, too, insurance firms lose customers because the person in-house who handled the claims didn’t do it well, which leads to a dissatisfied clients -- and that client will leave and insure with another firm.

“So it helps in both ways: the insurer and the insured will benefit if we have qualified, licenced loss adjusters in the market,” he said.

At present, there are only two loss adjusters in the market who have qualified to act as independent adjusters as a result of their experience in the market. However, the head of the Ghana Insurance College is the only licenced independent loss adjuster in the country.

As a result, large disaster claims relating to especially fire -- including the Melcolm and Tema Oil Refinery blazes -- had to be outsourced to foreign entities to investigate, negotiate and settle the claims.

This, Mr. Ofori explained, increases the expenditure of insurers unnecessarily.

“Insurance companies pay for claims that should not have paid, which can be very expensive. If this person is working for an independent adjusting firm, at least the responsibility can be shifted to the independent adjusting firm because they are independent and are acting on their own. So if they work on behalf on an insurance company and something goes wrong, the insurance company can now fall on them for reinvestment for recovery.

“Since we don’t have qualified loss adjusters in the market, a lot of things will not be done well. It also leads to an increase in the cost of handling claims.

“Sometimes, things that can be handled locally they have to bring somebody from outside to investigate and handle the claims on behalf of the insurance company, which can be very expensive.

“At the end of the day, if there was somebody locally it would have been cheaper,” added Mr. Ofori.

The Managing Director of NSIA Insurance, Linda Osei-Akoto said the absence of qualified adjusters is a bad omen for the industry.

She said the need for loss adjusters and inspectors have become even more critical for the industry in view of compulsory fire insurance policy implementation in the country.

Mrs. Osei-Akoto explained that fire insurance is a serious business for the insurers, which requires the services of qualified adjusters and inspectors to aid underwriters in assessing risks before a property is insured.

This, Mr. Ofori agreed with: “An independent loss adjuster is an expert in an insurance area; and fire is a very complex policy because if you make mistake, it might result in an unhappy customer whose rights might not be well recognised.

“But pre-inspection is not the priority of the adjuster. It is the priority and responsibility of the underwriter, because he will make the decision whether to insure a business or not.

“But the adjuster helps the underwater in many ways, especially when there is a claim because it is the report of the loss adjuster that will inform the claim payment.

“So I do agree that adjusters can do a better pre-inspection and risk assessment than underwriters,” noted Mr. Ofori.