“The Challenge of the proposed new timescales for Adjusters and other practical concerns or opportunities that arise.” Simon Burley ACII FCILA Director, Camford Sutton & Associates 1

Agenda What do Adjusters do under the current regime? What are the main changes in the new regime that will impact Adjusters? What do Adjusters need to change? What impact will the changes have on claims handling generally? Key messages 2

Warning: There are known knowns; there are things we know that we know There are known unknowns; that is to say there are things that we know we know we don’t know But there are also unknown unknowns: there are things we do not know we don’t know United States Secretary of Defense, Donald Rumsfeld 3

What do Adjusters currently do? Investigate & Report on PL & EL? Cradle to Grave claims investigation and claims handling Site visit followed by desktop claims handling Or Desktop handling from start to finish Specific tasks 4

We are concerned with EL & PL claims under £25k in England & Wales 1 day to acknowledge receipt of Claims Notification Form (CNF) 30 days to reach a decision on liability on an EL case. 40 days to reach a decision on liability on an PL case. Removal from Portal of claims where contributory negligence is argued New rules for Part 36 offers QOWCS 5

Why does it matter? If Defendants can meet all the deadlines and not dispute liability then claimant costs will be limited to the new fixed scale. Various analysis suggest that Claimant Solicitors Costs will reduce by between 25% and 50%. By volume 90% of UK EL and PL claims fall within the < £25k bracket. There is significant savings to be made if we get it right. 6

What do Adjusters do well and what do they find challenging in the current regime? The good: Experienced eyes and ears on site. Experience to review available evidence and see the way forward. Direct communication with policyholder and ability to “sell” the liability decision. Form an overview of risk i.e. approach to H&S generally. Opportunity to build or protect the Insurers brand. The not so good: Rushed and/or poorly organised visits. Sometimes challenged by the 90 day protocol investigation periods. Need to “consider” evidence before committing thoughts to paper. Use of “tactical” denials – often as a consequence of being removed from the final impact of such decisions. 7

Strategy for the future? For all claims handlers and adjusters: To work closely with the Insured/Self Insured to comply with the new processes and shorter timescales whilst ensuring that only valid claims are compensated “Simples” 8

What is key in the new world? 1.Cultural change Need for speed Seeking solutions not complications 2.Prioritisation of first appointment Initial data review Triage Diary management Use of historical records 9

What is key in the new world? (2) 3.Use of initial visit Well organised – witnesses and documents Willingness to spend longer on site Gathering of witness evidence Gathering electronic documents Explaining position to policyholder 4.Speed of reporting Triage – different models for different decisions Report from site Back office support Changed reporting formats 10

What is key in the new world? (3) 5.Consideration of liability arguments and use of contributory negligence Understanding your principals’ end game The end of the use of “tactical” denials What is a valid “contrib” argument? 6.Claims Handling post visit Use of the Portal Ability to handle Stage 2 and respond to claimant offers to settle Tactics around Part 36 offers made by claimant QOWCS & Part 20 proceedings 11

Other issues to consider? 1.Awareness of the “floodgates” argument 2.What can be done pre loss a)Policyholder awareness b)Pre loss reviews of documentation c)Establishing good internal investigation procedures d)Agreeing good procedures for central collection of information 3.Reserving a)Different rules for different losses b)Different considerations for different liability decisions 4.Conduct during claims handling a)Likely to be a key consideration if the claim litigates 12

Other issues to consider? (2) 5.Number of claims? a)In general? b)For Adjusters? 6.Claimant solicitor tactics? a)No Success Fee might change approach? b)Farming for “payers” instead of speculative claims? c)Lifecycle 7.It is a human process – not an IT process a)Triage and decision making is critical. 13

Other issues to consider? (3) 8.Adjusters doing more desktop investigation? 9.Notification of losses by policyholder a)EL ELTO b)PL? Importance of notification of “incidents” Policyholder understanding of process Does policyholder advertise his PL Insurer? 14

Key Messages? 1.Adjusters can deliver an added value service Having the right eyes and ears on site can make a difference They can enhance brand and operational delivery by providing pre loss services 2.Talk to your Adjusters about exactly what you need Review at an early stage to see how the theory is working 3.Be alive to some of the old failings of the adjusters and the need for cultural change – are your Adjusters fit for purpose? 15

Questions 16