Thursday 14th May 2015 Managing the Adjustment of a Major Catastrophe Loss

C r09.pptx Page 3 Your Presenters... Anthony “Nino” Scariano Senior Executive General Adjuster 2 Gary Brown President/Chief Operating Officer Jim Podesva Senior Executive General Adjuster/ Vice President

SCENARIO Imagine a large multi- national company that makes many things – especially BEER. They sustain wide area damage to many of their facilities when a hurricane hits the Eastern Seaboard of the United States damaging manufacturing, real estate, and all manner of property....

INITIAL MEASURES What are the things that need to happen as soon as the loss notice comes in...

INITIAL MEASURES Who will be the Loss Adjuster? Is there a designated adjuster or adjusting firm in the policy? Will the market appoint the adjuster, or even a co-adjuster? Can the broker appoint an adjuster?

INITIAL MEASURES First contact with insured, broker, and or claim perpetration firm; Determine locations and severity; Advise on mitigation aspects; Do you need to look at ALL locations; Obtain copies of the policy and identify variances; Provide preliminary advise to the market and seek confirmation and instruction on claim management strategy;

Planning On a loss of this magnitude, the Loss Adjuster will: (1) manage the investigation of the claim to develop the information needed to measure the loss under the policy; (2) provide clear communication to the insured and the insurers documenting the adjustment process; (3) assist the insurers in developing settlement strategies...

SELECTION/MANAGEMENT OF EXPERTS How to determine if experts are needed? When do you engage the expert? How to reach agreement when specific insurers have a “favorite.” How will the adjuster manage the experts activity Budgets – Fee funds Communications with the insured Communications with the insurers The over-zealous and under- zealous expert

STEERING COMMITTEES Deciding if you need one? Who will be on the steering committee? What will their responsibilities be... Approval of fees? Approve correspondence with insured? Make decisions on quantum and coverage?

MARKET MEETINGS When do you need to have a market meeting; Can you accomplish the goal with a conference call or a “dial-in meeting;” Location for the market meeting when your insurers are on different continents “Preview” key issues

MARKET MEETINGS When it looks like the market might “split”...

MEASURING THE PROPERTY DAMAGE The adjusters and experts responsibilities; Clearly define the experts assignment; Determine the most critical locations; Completing the inspections of the loss locations; Completing an active measurement of the loss; Its all about the SCOPE;

MEASURING THE PROPERTY DAMAGE When to use a clerk of the works; Identifying issues and obtaining resolution ASAP; Managing and documenting the results; Review and management of expectations Partial agreements and partial payments.

MEASURING THE TIME ELEMENT LOSS The adjusters and experts responsibilities; Clearly define the experts assignment; Challenges when working with the insured’s claim preparer; Completing and active measurement of the loss; Determining Critical Path – Use of Extraordinary expense coverage

MEASURING THE TIME ELEMENT LOSS Issues with multi-locations interdependencies and make-up; Managing and documenting the results; Partial agreements and partial payments.

SPECIAL CIRCUMSTANCES Captives and captive managers -- Who is the adjuster working for? Do you need a separate adjuster if you are a reinsurer? What are the licensing requirements? Claim preparation firms— Who determines if their fees are reasonable? What to do when they seem to go beyond the scope of a claim preparer?

SPECIAL CIRCUMSTANCES Losses in countries outside the U.S.A. Local policies, rules, regulations Payments in other countries.

WORKING WITH COUNSEL In many cases, the insurers will engage counsel to review coverage issues that might occur, there will be more than one firm, and on occasion there are multiple attorneys from a single firm. In subrogation matters, you can have instances when there are multiple firms because of agreements between carriers and law firms.

SETTLEMENT STRATEGIES The routine adjustment when the insured agrees with the adjusters and experts calculations; Isolate the areas of disagreement Bifurcate coverage issues from quantum issues Using the broker’s relationship with the insured Sometimes brokers try to “divide and concur...”; When to have a meeting with the insurers and the insured

It comes down to... Plan and Execute Communicate Managing Expectations

WHAT TO DO WHEN ALL ELSE FAILS