No Substitute for Experience

While trends of volume adjusting, national contracts, telephone claims handling and contractor outsourcing come and go, one thing always stays the same: the need for an experienced adjuster who can gather evidence, interpret policy wordings and determine the appropriate level of coverage.

That business model is the essence of Bannatyne and Company General Insurance Adjusters, a Hamilton, Ontario-based owner operated adjusting firm that has been in business for 34 years. With five skilled adjusters on staff, representing more than 100 years of combined experience, the company has found a quality-driven niche in the small to medium sized insurer marketplace. The adjusting team includes Bob Phipps, John Powell, Peter Walker, Karen Sunter and Alyson Harper. Bannatyne also has five dedicated administrative support staff, including one employee who has been with the firm since its start-up.

“There really is no substitute for experience,” says Bob Phipps, president of Bannatyne & Company. “We are fortunate in that we all have our areas of specialty, but we can handle a wide variety of claims.”

Phipps, who joined Bannatyne & Company in 1989, is recognized as one of the industry’s leading adjusters on large property and liability losses. He has been involved with the Hamilton Chapter of the Ontario Insurance Adjusters Association (OIAA) for decades, serving as a past president. Phipps also is an instructor with the Insurance Institute of Ontario.

Joining Bannatyne & Company the same year, by coincidence, was John Powell, vice president of the firm. With more than 20 years of experience and a specialization in accident benefit claims (as well as property and liability risks), he echoes Phipps’ comments about the flexibility of the organization.

“There is not any type of claim we don’t deal with,” Powell says. “We have been working with several smaller to mid-size insurers, a large municipality and we are also a Lloyds-approved adjuster in Canada.”

The company was formed in 1979, when Ross Bannatyne, who had been in the insurance industry since the 1960s, decided to start his own independent adjusting firm.

“To Ross’s credit, he built up a lot of good relationships,” Phipps says. “It is always difficult to start up your own operation. People may admire the success, but they often don’t see what it takes to get to that point.”

Bannatyne’s “hands-on” approach to adjusting continued with his successors. “We have the flexibility and latitude to tailor our services,” Phipps notes. “We can say to a client, ‘tell us what you need’ and we can deliver that. It has worked for us.”

Phipps says this strategy is diametrically opposed to the national contracts for flat fee adjusting that have become more prevalent in the Canadian marketplace. “Unlike some of the larger national firms that have a set procedure, we can be flexible,” he observes. “Obviously, we cannot compete on the level of flat rate contracts. That is not our business model.”

The flip side of this coin for smaller adjusters is the need to build mutually beneficial relationships, Powell notes. “There is a huge trust factor here,” he explains. “First, the client agrees to let us handle the claim and we take on that responsibility. And second, we promise to deliver what they tell us they need, not what we think they need – there is a big difference. It is based on mutual respect.”

Phipps says that the firm receives positive feedback from its roster of insurers, clients and Lloyd’s coverholders. “We have a good working relationship with our small to medium-sized clients,” he comments. “And when we have worked for larger insurers, they tell us they like our service, but their hands are often tied with national contracts.”

The changing dynamics of the insurance company-adjuster relationship have not left Bannatyne & Company unscathed. Phipps observes that he has seen first-hand the impact of mergers and acquisitions, personnel changes in claims managers and new strategic directions for some insurers.

“We have had situations where we have worked with a company for many years and then there is a change in the claims manager and a decision to bring claims in-house or to use another firm, ” Phipps says. “Similarly, we have had calls from companies we have never worked for. That’s just the way business is in this industry. It typically has nothing to do with your firm.”

One way to differentiate as a boutique-adjusting firm is to pursue a consistent method of quality control and standard procedure, according to Powell. “We have control over the product that leaves the office,” he notes. “We provide expert reporting and we respond to companies’ request for more information. Things get double and triple checked; it is how we have stayed in business and dealt with the competition. There is a strong sense of quality assurance here.”

That quality assurance model came into play in one of Bannatyne & Company’s largest loss experiences – the infamous Hagersville tire fire of 1990. The fire at the Straza tire dump, which held a total of 14 million tires, broke out in February of that year on the Norfolk-Haldimand boundary line. It took firefighters from 23 stations in Haldimand, Norfolk and other counties to fight the blaze for nearly a month.

Even though the fire was extinguished 23 years ago, Phipps and Powell say the lingering effects continue to this day. Several firefighters who were exposed to toxic chemicals at the scene have come down with aggressive cancers, according to an article in the Brantford Expositor. At least 10 firefighters have been diagnosed with the rare cancers, with the Worker’s Safety Insurance Board (WSIB) giving special priority to these compensation claims.

Bannatyne & Company was involved in inspecting and investigating the effects of the fire on the site and at neighbouring properties. The region recently has made efforts to buy out some of the surrounding properties, according to Phipps.

On the more day-to-day side of business, Phipps has seen a number of trends in the market, including a lot fewer small claims for homeowner insurance policies due to higher deductibles. “These used to be the bread and butter for smaller adjusters, so things like burnt carpets or damaged counter tops, these don’t happen anymore,” he notes. “That is not just for independent adjusters, but for the industry as a whole. It doesn’t make sense to pay these smaller claims.”

Powell also observes that Bannatyne & Company has seen a “huge spike” in water damage losses. “That trend has clearly been taking place across the country, but we have seen it here in Hamilton, as well,” he says. “In some cases, insurers will go in and settle the claim quickly, pay out the maximum limit and get a contractor to do the work directly.”

Phipps says he is disturbed by the amount of direct contractor work in the market, with the independent adjuster, in come cases, bypassed completely. “An insurance examiner will review some photos and go directly to the contractor,” he comments. “We believe there is no substitute for an experienced adjuster collecting information directly at the scene of the loss. We are the eyes and ears of the client and we can go far beyond just looking at a photo behind a desk.”

The frequent challenges facing the small regional adjuster, such as heightened competition from national companies, evolving insurer strategies and contractor outsourcing, have always been there, according to Phipps. And likely always will be.

“There has always been pressure on the independent adjusting firm to survive,” he concludes. “I think today the demands on the individual adjuster are greater – you have to respond quicker, you have to keep up with technology, you have to be flexible when it comes to changes in the market. In the end, you have to look at your business model and whether it is competitive. That, and your level of experience.”