Forensic investigations form part and parcel of many insurance claims in the Asia-Pac region. Whether a loss is complex, costly, or if there are expected to be questions down the line around causation and liability, insurers and their loss adjusting partners will request that forensic capture of evidence is undertaken.

Yet,  the robustness of an investigation  often remains  untested until years down the line if and when a loss makes its way to court. At this stage, evidence collection, due process and chain of custody will all come under the spotlight. Even in a simple fire claim, cases can fall over in court if they were not investigated properly.

So how big an issue is this?

A case may ultimately rise or fall on the reliability and admissibility of the forensic evidence. While court represents the ultimate test of the evidence, the majority of disputes will settle in mediation. Without proper evidence collection and consideration, there are more issues in dispute and all parties are in a weaker position from which to negotiate settlement. It is more likely that settlement will be unfavourable or will need to be resolved in court.

What are the key considerations when it comes to undertaking a forensic investigation within the context of an insurance loss?

The key consideration for the forensic investigator is to faithfully bring the scene to the court. In this regard, the approach to evidence collection must be systematic, thorough, and complete. While the primary instruction of the insurer is typically to determine the cause of the loss for the purpose of indemnity, the forensic investigator is to identify all the likely issues that could be raised in a legal dispute, and actively seek to resolve these through evidence identification and collection at the scene.

This requires a working knowledge of insurance policies, exclusions, conditions or endorsements that may apply, as well as any factors that may have contributed to the loss and  extent of damage, all of which ultimately may impact indemnity, recovery, as well as apportionment of blame in a legal dispute.

Consider a commercial kitchen fire caused by a flare up while cooking that spread through the duct and into the building, impacting on multiple tenancies. Once the cause is established, a forensic investigation should capture the fire suppression equipment, maintenance records, evidence as to whether the duct was cleaned effectively, whether the design of the duct was compliant, if modifications the fit out of the building have led to subsequent non-compliance, and evidence of adequate fire separation between tenancies.

Where do cases tend to fall down?

Most cases fall down due to the introduction of doubt that comes from incomplete evidence capture.

Poor evidence capture is often a by-product of expectation or confirmation bias, a phenomenon where an investigator unconsciously fits the interpretation of the evidence into their pre-conceived expectations, allowing it to influence investigative decisions.

Without robust examination methodology to systematically capture the scene, it is often the case that the introduction of bias leads to the collection of evidence which supports the preferred opinion, and contradictory evidence is either not looked for, dismissed, or explained away, leaving holes in the evidence capture.

A forensic investigation should be ‘evidence-led’, meaning it should have an emphasis on the objective presentation of all evidence from which conclusions are then drawn. Where evidence capture is poor, the opposite is usually seen, with explanations for how the cause can explain the evidence, conclusions presented followed by the features that support it, and opinion that is not linked to specific observations. Such evidence may present as extremely convincing to the lay person, until another expert reviews the evidence and exposes the holes.

How can claims professionals ensure cracks don’t appear in their case?

International standards for forensic sciences state that “scene examination is the first step of the forensic science processes, and the treatment of an incident scene predetermines the quality and quantity of information available for the investigation and ultimately the information available as evidence in court.” Ensuring that a comprehensive scene examination by a forensic expert is undertaken at the outset will lead to the best outcomes. In this regard, the principle of ‘go early’ and ‘go hard’ should be remembered.

Objective review of observations and opinions throughout the investigation provides protection against unconscious bias and identifies any weaknesses in the evidence that  can easily be addressed. If the first challenge occurs years down the line when questions are raised by another party, the original scene is often long since gone, and these question remain unanswered. A robust peer review program will give greater certainty that the opinion will stand up to scrutiny.

Peter Jeffrey, Principal Consultant, Halliwell

Halliwell offers comprehensive forensic technical investigation and loss consulting services across the globe, including engineering, forensic investigation and construction consulting. Wholly-owned by global claims services provider McLarens, Halliwell operates as distinct legal entity with its own operating system, business model, and governance, offering independent but complementary services to the insurance and related markets.

The post Evidence-led forensic investigations stand the test of time appeared first on InsuranceAsia News.

Forensic investigations form part and parcel of many insurance claims in the Asia-Pac region. Whether a loss is complex, costly, or if there are expected to be questions down the line around causation and liability, insurers and their loss adjusting partners will request that forensic capture of evidence is undertaken.

Yet,  the robustness of an investigation  often remains  untested until years down the line if and when a loss makes its way to court. At this stage, evidence collection, due process and chain of custody will all come under the spotlight. Even in a simple fire claim, cases can fall over in court if they were not investigated properly.

So how big an issue is this?

A case may ultimately rise or fall on the reliability and admissibility of the forensic evidence. While court represents the ultimate test of the evidence, the majority of disputes will settle in mediation. Without proper evidence collection and consideration, there are more issues in dispute and all parties are in a weaker position from which to negotiate settlement. It is more likely that settlement will be unfavourable or will need to be resolved in court.

What are the key considerations when it comes to undertaking a forensic investigation within the context of an insurance loss?

The key consideration for the forensic investigator is to faithfully bring the scene to the court. In this regard, the approach to evidence collection must be systematic, thorough, and complete. While the primary instruction of the insurer is typically to determine the cause of the loss for the purpose of indemnity, the forensic investigator is to identify all the likely issues that could be raised in a legal dispute, and actively seek to resolve these through evidence identification and collection at the scene.

This requires a working knowledge of insurance policies, exclusions, conditions or endorsements that may apply, as well as any factors that may have contributed to the loss and  extent of damage, all of which ultimately may impact indemnity, recovery, as well as apportionment of blame in a legal dispute.

Consider a commercial kitchen fire caused by a flare up while cooking that spread through the duct and into the building, impacting on multiple tenancies. Once the cause is established, a forensic investigation should capture the fire suppression equipment, maintenance records, evidence as to whether the duct was cleaned effectively, whether the design of the duct was compliant, if modifications the fit out of the building have led to subsequent non-compliance, and evidence of adequate fire separation between tenancies.

Where do cases tend to fall down?

Most cases fall down due to the introduction of doubt that comes from incomplete evidence capture.

Poor evidence capture is often a by-product of expectation or confirmation bias, a phenomenon where an investigator unconsciously fits the interpretation of the evidence into their pre-conceived expectations, allowing it to influence investigative decisions.

Without robust examination methodology to systematically capture the scene, it is often the case that the introduction of bias leads to the collection of evidence which supports the preferred opinion, and contradictory evidence is either not looked for, dismissed, or explained away, leaving holes in the evidence capture.

A forensic investigation should be ‘evidence-led’, meaning it should have an emphasis on the objective presentation of all evidence from which conclusions are then drawn. Where evidence capture is poor, the opposite is usually seen, with explanations for how the cause can explain the evidence, conclusions presented followed by the features that support it, and opinion that is not linked to specific observations. Such evidence may present as extremely convincing to the lay person, until another expert reviews the evidence and exposes the holes.

How can claims professionals ensure cracks don’t appear in their case?

International standards for forensic sciences state that “scene examination is the first step of the forensic science processes, and the treatment of an incident scene predetermines the quality and quantity of information available for the investigation and ultimately the information available as evidence in court.” Ensuring that a comprehensive scene examination by a forensic expert is undertaken at the outset will lead to the best outcomes. In this regard, the principle of ‘go early’ and ‘go hard’ should be remembered.

Objective review of observations and opinions throughout the investigation provides protection against unconscious bias and identifies any weaknesses in the evidence that  can easily be addressed. If the first challenge occurs years down the line when questions are raised by another party, the original scene is often long since gone, and these question remain unanswered. A robust peer review program will give greater certainty that the opinion will stand up to scrutiny.

Peter Jeffrey, Principal Consultant, Halliwell

Halliwell offers comprehensive forensic technical investigation and loss consulting services across the globe, including engineering, forensic investigation and construction consulting. Wholly-owned by global claims services provider McLarens, Halliwell operates as distinct legal entity with its own operating system, business model, and governance, offering independent but complementary services to the insurance and related markets.

The post Evidence-led forensic investigations stand the test of time appeared first on InsuranceAsia News.

The post McLarens promotes Tina Sheehan to southern regional manager for New Zealand appeared first on InsuranceAsia News.

The post McLarens promotes Andrew Brooke to managing director New Zealand appeared first on InsuranceAsia News.

The post McLarens launches forensic accounting in Malaysia with Sedgwick hire appeared first on InsuranceAsia News.

The post McLarens hires Eugene Goh from Sedgwick as technical director in Singapore appeared first on InsuranceAsia News.

The post McLarens prepares for larger Asia losses appeared first on InsuranceAsia News.

According to the International Air Transport Association (IATA) international traffic climbed 68.9% in March 2023 compared with March 2022. Whilst all markets saw notable growth, these stats were largely led by “a near-tripling of demand for Asia Pacific carriers as China’s re-opening took hold.” The IATA stats pointed to a 283.1% increase in traffic for Asia Pacific airlines, with capacity rising 161.5% and the load factor increasing 26.8 percentage points to 84.5%, the second highest among the regions.

As such it’s business as usual for aviation hull insurers in the region, who are turning their attentions towards claims’ costs. Whilst the underlying safety of the aviation industry has improved markedly over the last 20 or so years, with major losses having become rarer, it is the annual cost of the attritional claims that is now the predominant focus.

New generation aircraft
During the Covid pandemic, airlines accelerated the retirement of older aircraft, inevitably favouring the newer more fuel-efficient types. This has been further reinforced with the return of higher oil prices and the global economic downturn. This trend shows no sign of abating.

Airbus, for example is forecasting that the region will need over 17,600 new aircraft by 2040. The manufacturer expects the “retirement of older aircraft to accelerate, demand progressively more driven by replacement, supporting the industry’s decarbonisation objectives.”

Various issues are at play here. The technology is such that conventional structural repair methods, which are more straightforward and readily available, are no longer applicable to aircraft such as the B787 and A350. In almost all but the most minor damage events, the manufacturer’s support will be required.

These aircraft types have been in service long enough now for us to see that the level of cost increase is in the order of four to six times that which had been experienced on the previous generation of aircraft.

Moreover, with the latest generation of aircraft, the manufacturers have been less inclined to invest in repairs and it is now often the case that components are repaired through the replacement of sub-assemblies, as opposed to the more cost-effective option of repairing those sub-assemblies.

New engine options
The same is true for engine damage caused by Foreign Object Debris (FOD), which accounts for almost half the attritional claims experienced on the global airliner fleet. In some events, the damage will be able to be repaired “on-wing”, in the remaining cases the engine will need to be submitted to a shop which can result in costs running to millions of dollars.

The design of the latest engines offers many of the advantages, one of which is an improvement in FOD resilience. The downside is that the repair of these engines will be concentrated with the manufacturers’ shops and the design is such that high-cost parts will inevitably be scrapped as opposed to being repaired. Experience is low at this stage however we are already seeing examples of the cost of repairing these engines being high.

Risk management
The overall safety record has shown steady improvement although more can clearly be done to reduce the avoidable claim events. The human interface and operational environment will always create scenarios that combine to cause losses, particularly as the industry recovers and resources become stretched.

For aviation insurers, risk mitigation is a primary consideration and, where appropriate, they may take a more active approach to assessing an insured’s risk profile by using specialist organisations to review their operation and make recommendations to reduce risk.

These assessments are almost always beneficial, particularly if they are followed up on.

This article was written by Andy Pickford, Asia Regional Director at McLarens Aviation. Pickford is based in Singapore. 

The post “Whilst the underlying safety of the aviation industry has improved markedly over the last 20 or so years, it is the annual cost of the attritional claims that is now the predominant focus.” appeared first on InsuranceAsia News.

Loss adjusting has changed significantly over the last century. From the early years of the 20^th Century where adjusters typically focussed on fires, commercial building losses and war related damage, the stereotype of loss adjusters as an army of grey suits in wellies, brandishing clipboards as they tour disaster sites, became entrenched.

Nowadays, many loss adjusting businesses, offer much more than traditional property and casualty adjusting. From forensic accounting and investigation, and financial lines expertise, to building and construction services, adjusting businesses have expanded in line with the services that insurers and their clients require.

As businesses have become more global, so too have their insurance needs. Consistency of service, technical delivery and data quality are key elements of a global claims service, and international adjusting firms have built their models around these requirements.

The Asia market is a great example. Local customs, practices and jurisdictional requirements must all be respected and observed but the same standard of service is expected, irrespective of where a loss occurs.  Strong relationships are required wherever the insurance buyer and insuring market are based.

Consolidation
Consolidation has gone hand in hand with this. The need to grow has always been primarily about meeting client demands. Having a global network allows firms meet the regulatory requirements of the industry and of their clients; to be a size where they can operate in all the global markets required; and to plug any holes that they might have on an industry or specialties basis.

Despite this global growth and consolidation, for many years, loss adjusting has been viewed as one of the more traditional areas of the insurance market: a profession in need of modernisation and disruption.

Yet, today, loss adjusting is on a journey of reinvention, using data and technology to improve the speed and quality of client response, allowing for better reserving and loss estimation, reducing indemnity spend and offering quicker resolution of claims.

Loss adjusters have been shifting to an ever more digital model (accelerated by the Covid-19 pandemic). We operate globally on remote claims systems, where everyone is connected and where we can work effectively as a virtual office. We have extended our digital capabilities to policyholders, with the ability to stream real-time, geo-tagged and tamper resistant image evidence from anywhere in the world. That ability to assess and manage claims remotely has been enhanced considerably by the use of drones, satellite imagery and other technology.

Looking forward, we will undoubtedly see greater use of technology, including artificial intelligence in data collection and analytics.

At lower values, this will enable more claims to be managed on a desktop or automated basis and we will see a greater focus on lifecycle reduction.

The key will be in finding the right balance and ensuring that those claims that require the attendance of an adjuster due to size, complexity or a particular nuance, do find their way to a suitable expert.

Whilst technology will no doubt transform many aspects of work, it won’t deliver the empathy or innovative loss mitigation solutions that quality adjusters bring to such situations, particularly in the complex, commercial and specialty segments of the market. Even after 90 years in business, people are still our key asset.

This brings me to my final point, around workplace culture. With the battle for talent continuing to heat up, the adjuster of tomorrow is looking for an employer with a social conscience, embracing diversity, and promoting ethical and sustainable business. These factors will become increasingly paramount in the age of Loss Adjusting 2.0.

This article was written by Chris Panes, McLarens chief operating officer, Europe, the Middle East and Asia Pacific.

The post Loss adjusting 2.0 – what does the future hold for this venerable profession? appeared first on InsuranceAsia News.

The post McLarens promotes BI adjuster in New Zealand appeared first on InsuranceAsia News.