WORKING TOGETHER:

the Crawford Difference

MIĘDZYNARODOWE

DOŚWIADCZENIA W LIKWIDACJI

DUŻYCH SZKÓD OGNIOWYCH International Loss Adjusting Experience

on Large Fire Losses

Fire and professional risk assessment

Symposium in Poznan on 28. April 2010

Walter Bartholomes

Regional Manager

CEE& EURASIA

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ROSZCZENIA – KIEDYŚ, DZIŚ, W

PRZYSZŁOŚCI Claims Past, Present and Future

2000 BC

Babylon

600 BC

India

400 BC

Greece

2000 AD 0 1667AD

London

Widespread

Personal

Products

Centralisation Restoration

Service

Expectation

Fire Insurance

Regulation

Call Center

Offshore

Managed

Supply Chain

Shipping loan

protection

Compensation

Culture

„e“ channels

MAŁA LICZBA,

NIESKOMPLIKOWANE,

NIEWYRAFINOWANE

From a low volume,

bespoke „cottage industry“

DUŻA LICZBA, BARDZO

SKOMPLIKOWANE, PROCES

„UPRZEMYSŁOWIONY”

To a high volume, high complexity

„industrialised“ process

Early Health /

Life cover

600 AD

Rome

New Risks

Not to scale!

Source Accenture – The Future Claims Professional

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KIM JEST LIKWIDATOR?

What is a Loss Adjuster?

• Definition of term „anglo-american

• „junior / senior / general, etc.“

• In USA: only for certain States

• Individuals with training and title

• Examinations in the UK and USA

• UK – FUEDI / CILA -training

• Europe: no training other than with insurers

• USA: Training internally/externally

• e.g: Crawford University

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WYZWANIA DLA LIKWIDATORA

The Challenge for the Loss Adjuster

OGRANICZENIA

KOSZTÓW

ROSZCZEŃ

Cost of Claims

Containment

• Understanding the value levers in Claims, and applying them to front line business decision making

• Achieving 21st century levels of productivity while maintaining customer service and containing claims cost

• Serving demanding customers, with high service expectations, across a wide range of complex products

• Balancing customer service and empathy with the need to protect insurer‘s interests

KONTROLA

WYDATKÓW

Expense

Control

OBSŁUGA

KLIENTA

Customer

Service

SKOMPLIKOWANE ZADANIE ZNALEZIENIA RÓWNOWAGI – BARDZO

WYMAGAJĄCY ZAWÓD

A complex balancing act – and a highly demanding career

Within a high

volume, high

complexity

environment

Source – Accenture for Faculty of Claims

WORKING TOGETHER: the Crawford Difference 5

PO CO NAM LIKWIDATOR?

Why Loss Adjusters ?

• International insurers often do not have a large claims department

• Require loss adjusters in international markets where their clients are located

• Re-insurers: Loss Control Clause vs. Claims Cooperation Clause

• Domestic insurers often do not have claims services abroad (WARTA,PZU,etc.)

Corporates, Captives do not have their own loss adjusters

• Re-insurers often do not trust the local markets

11/12/05 Buncefield Oil-

Terminal

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PUNKT WIDZENIA LIKWIDATORA

Loss Adjuster`s views

• (pre) defined tasks of claim handling teams (ZDEFINIOWANE ZADANIA DLA ZESPOŁÓW LIKWIDACYJNYCH)

• Domestic versus International assignment (ZADANIA LOKALNE I MIĘDZYNARODOWE)

• Neutrality – but “he who pays the piper” ... (NEUTRALNOŚĆ ALE „KTO PŁACI”…)

• Communication and reserving politics (STRATEGIE KOMUNIKACYJNE I RESERWOWE)

• High Domestic „marketing attitudes“ with low share in losses (DUŻY NACISK NA MARKETING LOKALNY Z MAŁYM UDZIAŁEM W SZKODACH)

• Initial measures and crisis management (ŚRODKI WSTĘPNE I ZARZĄDZANIE KRYZYSOWE)

• Insured´s intent for replacement options not to rebuild at same place or in different way (NIECHĘĆ UBEZPIECZONEGO DO ODBUDOWY W TYM SAMYM MIEJSCU)

• Underestimation of BI loss potential by Insured–mutual emergency planning and common meetings (NIEDOSZACOWANIE STRAT WYNIKAJĄCYCH Z PRZESTOJU W DZIAŁALNOŚCI PONIESIONYCH PRZEZ UBEZPIECZONEGO – DWUSTRONNE PLANOWANIE KRYZYSOWEG I WSPÓLNE SPOTKANIA)

WORKING TOGETHER: the Crawford Difference 7

POTENCJALNE OBSZARY KONFLIKTU

Potential for Conflict

deliberate under-insurance (because of

premium) CELOWE NIEDOUBEZPIECZENIE (Z

POWODU SKŁADKI)

policy wording (local – master policy) SFORMUŁOWANIA W POLISIE (POLISA GŁÓWNA

- LOKALNA)

replacement value assessment (PRZENIESIENIE OCENY WARTOŚCI)

local jurisprudence (LOKALNA POLITYKA SĄDOWA)

insurance agreements with Master

DIC/DIL (UGODA UBEZPIECZENIOWA)

Decision on future business at same

location ! (KONTUNUACJA DZIAŁALNOŚCI

BIZNESOWEJ W TYM SAMYM MIEJSCU)

Re-insurers: Loss Control Clause vs.

Claims Cooperation Clause (REASEKURACJA)

Goodyear tyre plant Germany

FABRYKA OPON Goodyear

NIEMCY

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KILKA PRZYKŁADÓW SYTUACJI KONFLIKTOWYCH

Some examples of conflicts

1. German chemical company has an alleged fire loss in a plant near Shanghai

Local Chinese fronting insurers

German insurers as leading co-insurers and master

Question: Would you trust a local loss adjuster and pay after 6-12 months on the basis of a

report?

Or consult an internal loss adjuster, who has experienced adjusters in China and can

maintain direct communication on site in China and Germany between client and insurers?

Following a technical-engineering review in Germany, it emerges that it was not a fire

incident and that engineering losses are not covered.

2. Fire incident at a Russian pharmaceutical company near Moscow (US$ 85 million)

Assigning of Crawford locally and internationally in order to gain the trust of their worldwide

clients in the correct settlement of the claim.

3. Fire incident on a molasses tank in Venezuela when civil war broke out

• CAT-claims in earthquake and tsunami regions

WORKING TOGETHER: the Crawford Difference 9

PRZYKŁAD

Case Study

• Video on large loss about FILM VIDEO

• Fire loss in Germany of Multinational

Corporative DUŻA SZKODA OGNIOWA W

MIĘDZYNARODOWEJ KORPORACJI Z BAZĄ

W NIEMCZECH

• (ca. 5 min.)

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Countries in

which Crawford

have offices

Global:

• 670 offices (440+ N. America)

• Presence in 65 countries

DZIAŁALNOŚĆ OGÓLNOŚWIATOWA

Global Presence

Europe/S-Africa:

• 123 offices in 27 countries

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SZKODA OGNIOWA – POŻAR MAGAZYNU

CHEMIKALIÓW W POZNANIU

Fire loss at Still plant in Posnan 2. August 2008

International clients require assistance from qualified crisis

management in loss incidents

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DUŻA SZKODA – ELEKTROWNIA WODNA

NA SYBERII

Large loss at Hydro Plant in Siberia 2009

• Crawford employed by international Re-Insurers on US$ 1.26 billion

property loss – 78 workers killed

• 13% of all electricity to Russian Federation lost (86% of Siberia)

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ZMNIEJSZANIE SZKÓD WYNIKAJACYCH Z

PRZERWY W DZIAŁALNOŚCI

Loss Mitigation on Business Interruption

Important to cool the

gas and infrastructure

piping by fire brigades

Titan-Chlorid

production (BaSx line)

Risk of

explosion

WORKING TOGETHER: the Crawford Difference 14

SZKODA OGNIOWA W ELEKTROWNI

ATOMOWEJ

Fire Loss at Nuclear Power Station

• Power outage in and around

Hamburg

• Green Party forced

governmental investigations

• 2 years stillstand as no

permission to re-start

• 3 days after re-start new and

similiar loss of same type

• Further 1 year total stillstand

• Loss of business/income

enormous

• No BI insurance

WORKING TOGETHER: the Crawford Difference 15

DOKŁADNE OKREŚLENIE SZKODY

Loss Reserve

Speed of estimate vs. Accuracy of estimate SZYBKOŚĆ OCENY VS DOKŁADNOŚĆ OCENY

• The market does itself no favours in rushing to be the first to post estimates that are clearly unsustainable.

• How to balance the current thirst for immediate information against the professional judgement of the situation by experienced loss adjusters.

• No single factor in the claims process gives the market more cause for concern that a reserve that is continually changed.

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Projected Calculation vs. Actual Calculation – what is the BI-

Loss when economy is affected like in a finacial crisis

Actual

Sales

WYSOKOŚĆ

SPRZEDAŻY

Date o

f loss

DA

TA

SZ

KO

DY

Covered Loss?

SZKODA POKRYTA?

Economy

GOSPODARKA

Actual Sales

WYSOKOŚĆ

SPRZEDAŻY

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PRZEŁAMYWANIE BARIER

Tearing Down Barriers

Pre Event

PRZED Post Event

PO

Incident management

Business continuity

Claims Management

ZARZĄDZANIE

KRYZYSEM

CIĄGŁOŚĆ BIZNESU

ZARZĄDZANIE

SZKODĄ

Joined up thinking

MYŚLENIE ZINTEGROWANE

Guard against irrational decision

taking STRAŻNIK RACJONALNEGO

MYŚLENIA

A process of continuous evolution

PROCES CIAGŁEGO ROZWOJU

Risk profiling

Programme design

OKREŚLENIE

RYZYKA

OPRACOWANIE

PROGRAMU

WORKING TOGETHER: the Crawford Difference 18

Business

recovery

ODBUDOWA BIZNESU

Crisis

Management

ZARZĄDZANIE KRYZYSEM

Emergency

Response

DZIAŁANIE RATUNKOWE

Immediate pre

Planning

SZYBKIE PLANOWANIE

Disaster

recovery planning

PLANOWANIE ODBUDOWY

PO KATASTROFIE

PLANOWANIE/ĆWICZENIE/ŚWIADOMOŚĆ – CYKL

NAUKI

Planning/Training/Awareness – the cycle of learning

Frequent

Testing

CZĘSTE TESTY

WORKING TOGETHER: the Crawford Difference 19

PIERWSZE MYŚLI – ODCZUCIA RZECZYWISTOŚĆ

First Consideration – Perception and Reality

“Irrespective of the reality of a situation, people only react to what they perceive to be the case”

“50% of all companies that sustain a major loss, close within a year“

Source:Keane

“Companies without a contingency plan, sustain up to 94% greater losses than companies with such a plan”

Source: Disaster Recovery Journal

Source: Oxford Metrica

WORKING TOGETHER: the Crawford Difference 20

UWAGI KOŃCOWE

Closing Thoughts

•“if an organisation is perceived as competent in

preventing chaos in a crisis, it demonstrably leads

to an actual increase in share value.” • Knight & Pretty - Templeton College

• “Organisations do not learn from the past…

individuals learn but they leave the organisation

taking their knowledge with them.”

•Trevor Kletz - Lessons from Disaster