Calgary policyholders should demand Canadian Adjusters

I will preface the information below by saying that all opinions are my own, and are no reflection on my employer, a wholly and proudly Canadian-owned insurance brokerage.

Happy Canada Day

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Edited July 2, 2020 at 9:30am for a correction: SGI has reached out to me, and I am pleased to say that the information about SGI originally obtained for this post was incorrect. They have confirmed that: “SGI does not use CRU in Alberta at all. We use local repair companies to perform inspections from our vendor management agreement. In Sask & MB where SGI does use CRU for inspections, we have arranged to use only Canadian inspectors, and not their USA partners. SGI also no longer owns the Insurance Corporation of PEI.  It was sold in 2014″ (emphasis theirs). Well done, SGI, and thanks for clarifying.

Late yesterday afternoon while sitting in my office, I came across an article from Global News, which found that there was a parking lot at a hotel in Calgary’s northeast that was full of trucks with licence plates from “states like Texas, Florida, Oklahoma, Mississippi, Utah and South Carolina”. The article went on to say that the plates belong to adjusters working for CRU Group, or “Catastrophe Loss Adjusters”, and they were there to respond to the hail claims on behalf of insurers in Canada; CRU themselves is a Canadian company based in Toronto.

I posted the Global piece on LinkedIn, which you can see below, and noted some of the misgivings I have about this situation. I think it’s terrible, for a bunch of reasons. My misgivings have grown, due to conversations before, after, and within the LinkedIn post.

(Please ignore the weirdness here – I have to post the same code twice, in order for it to (only) work properly the second time. I’m working on the bug fix.)

I’ve also confirmed through a couple of sources the likely insurers involved, and it’s shocking to me: TD Meloche Monnex (and their various subsidiary companies), and SGI. A chartered bank, and a provincially-owned insurer. This might be the most shameful piece of all.

So, on Canada Day and with a full pot of coffee, I thought I would expand on the general thoughts that I, and others, have had about this issue. However, I want to make one thing clear: this is absolutely not about a lack of capacity amongst Canadian firms, or a lack of available qualified technical staff at insurers and independent adjusting firms.

Historical perspectives of CAT Adjusters

As long as there have been catastrophes (CATs), or at least as long as I can remember them being of any importance, there have been catastrophe (or CAT) adjusters. (And please, let us expunge the word “Kitten”, used to describe a smaller localized event, from the insurance lexicon, as it is just wrong). At one of my first insurance jobs, I was calling up semi-retired adjusters to see if they wanted to go down to the US to help with Hurricane Andrew which hit Florida in 1992, a month before I went to Crawford and Company’s training class in Atlanta, GA.

There is a certain element of property adjuster that defines themselves as a CAT adjuster – they’re a storm chaser – and they are damned proud of it in many cases. When I was researching a drone, specifically to use because I hate (hate!) roofs, I went to some of the independent adjuster discussion forums on the internet – which are nearly 100% frequented by American adjusters. In the CAT adjuster forums, the question had naturally come up – use the technology, there is software that can measure the roof from the air, leverage new tech. Who doesn’t want a 4K video and still camera that is in the sky and can fly low down to within a couple of feet of the shingles and get amazingly clear photos of hail impacts, right?

These were CAT adjusters. You were nothing, a complete amateur, unless you came equipped with three different ladders, tie-off ropes (which according to many of them are for “sissies” and aren’t used, but keep the workers comp inspectors happy if they see them in the truck), etc. etc. These were real men, who talked about how they would inspect 14 to 20 properties in a day, and get maybe 3 or 4 hours sleep because they were writing their estimates in the bar until it closed. These are the CAT adjusters, and they’re proud of it. And by day 3 I wouldn’t want them at my house.

Now, that’s not to paint them all with the same brush, and I’ve written reports during a CAT while having a beer too. The point was that these are guys who pride themselves on chasing storms, on working (primarily) the hurricane period. These adjusters play a valuable role – especially the ones I was reading on the forum, who were professionals, and showed up ready to work. I’m sure that is who has been brought in; they’ve stayed on a rotation. However, it has to be remembered that these adjusters are independent contractors. They fly under a banner of a specific company because provincial licensing requires it, but they are independent individuals. They are freelancers. And once their assignment pile dries up, they are off to the next catastrophe, usually back to the US. And please, while they are here in Canada, don’t let a major catastrophe hit the US, as they will fly south like a flock of geese chasing a richer payday in a richer currency (and will get both).

The last time I know of (more below) that American adjusters were brought in to Canada was as a response to the Fort McMurray fires in May 2016. I know that this firm has brought them in after, as I’ve dealt with some that were acting as examiners within the last two years. This isn’t irregular, and the reverse is also true – I have many friends that have responded to claims for hurricanes, tornadoes and wildfires in the US, the Caribbean, and Australia. For some, storm chasing is literally a way of life, and how they earn their living. Some of these adjusters are true professionals who have chosen this career, and again, I’m sure that was who was tapped to come up. But things are different this time around, than they were in 2016.

Adjusting as a profession in late 2019 and 2020 – volume, flooding, and a pandemic

I was an independent adjuster from 1992 to 2010, and again from 2016-2018, and you might be able to tell that I’m very proud of this stage in my career. I only worked for national independent adjusting firms, some small and some very large, as both an adjuster and a manager. I handled claims, I managed people and accounts, and I oversaw responses to catastrophe losses. Forgive me if I feel that I have a unique, and now outside, seat to review the industry and what is going on, but I have had family, many friends and hundreds of colleagues in the adjusting world, and I do wear it on my sleeve as a noble profession.

Part of my current role is daily interaction with adjusters pretty much nationally, both as they work on claims for our clients, and just in general. I still feel that it’s better, when time allows, to pick up the phone and build the rapport with folks, so call me old school. However, that also lets me keep tabs on how the industry is doing – busy, slow, steady – which is also helpful for my job. I need to know who I can call on when something is truly on fire, and I need to get someone out there.

2019 was a pretty dismal year as far as business went for many independent adjusters. Remember, IAs aren’t just specialist or boutique firms that deal with complex liability or massive property claims. They also serve as an overflow for some insurers, or an integral part of some others’ claims departments, in both cases handling routine and regular claims. The difficulty is that the whims or directions of the insurers can change very quickly. Following the 80/20 rule, 80% of an insurer’s claims are going to be homogeneous, run-of-the mill style work – residential property, mostly, consisting of losses to single family houses, strata/condo losses, and small business claims. Everything from a bike stolen from the building’s bike lock-up to robberies to broken windows caused by protests. This is the stuff that pays the rent and keeps the lights on for many firms.

In late 2018 and through 2019, because of a hardening insurance market and pressure to reduce costs as insurers reduced capacity (among many other complex financial reasons), insurers started to bring as much claims handling as possible “in house”. The hired and trained adjusters, they started to deploy their own group of road staff, and ultimately reduced the need for outside resources like independent adjusters. They still had contracts with them, but those contracts never guarantee volume, only rates – so, independents would still be called when the claims were complex, or subscribed against multiple insurers, or for other reasons.

Towards the end of 2019, there were business decisions that had to be made, and unfortunately that necessitated some layoffs. I was a manager, and had lived through those mornings of the long knives, and they are never decisions taken quickly or lightly, and are always filled with angst. These are real people that you see in the halls every day, and you know their kids’ names. They’re your friends, really. It’s hard – and it’s sad when the industry as a whole has to succumb to that sort of pressure.

The hard market continued into 2020 (and still continues…), and the volume continued to be quite stagnant. None of the adjusters I was talking to were too busy, barring some who were alone in a marketplace or had a niche business. Everyone was feeling the pinch. Globally, the layoffs continued, including at firms that have a Canadian presence. It had been a bad nine or so months in the independent adjusting space. And then the COVID-19 lock down hit.

If you talk to any of the insurers, claims volume during the lock down dropped significantly, as most people are working from home and catch leaking pipes and such very quickly during this period. While there was an initial rush of business-related claims due to COVID-19, these tapered off within a month, and due to the political sensitivity (or straightforward policy interpretation), these were mostly dealt with by in-house adjusters at the insurer level. This second dip in volume created an unfortunate and necessary second round of layoffs in some circles.

I mentioned above that I know many people in the industry. You always hear rumours about numbers, but I’ve tried to double and triple source my information. I’m pretty confident in saying that since the fall of last year, there have been about 200 independent adjusters that have been either permanently laid off or furloughed in Canada. Again, many of these are friends, colleagues, or acquaintances, but all of them are in what I feel is a good, honest, noble profession.

Then, around the end of April, there was flooding in Fort McMurray due to a massive ice jam on the Athabasca River. This flooding has been independently estimated to have caused over $255,000,000 in damage. It is important to note that this was confirmed by the Insurance Bureau of Canada (IBC), because the IBC is the one who (with the support of their member insurers) officially “declares” a catastrophe. This puts many different wheels in motion – including the wheels of how the adjusting firms respond. This also means that adjusting firms bringing help up from the US can provide those American resources a letter confirming that their help is needed. That’s how it is supposed to work, anyway.

And now, during this great lull – something that hadn’t been seen since a similar one in 2009 and 2010 when I was an IA in Toronto – the massive Calgary hail storm happened on June 13. Multiple sources, including the Institute for Catastrophic Loss Reduction (ICLR), an independent insurance CAT think-tank, have pegged the total damage for auto and property claims at $1 billion. And, to my knowledge, the IBC has still not declared this a catastrophe.

Foreign Workers

To my knowledge – and I know many folks that organized the response, and many folks that were part of the response – there weren’t any American adjusters in Fort McMurray this time. There certainly were during the fires in 2016. However it seems that my assumption was wrong (I never asked the question), as CRU Group issued a press release stating that:

“We deployed Residential, Commercial and Auto Adjusters, and are quickly reporting and quantifying the extent of damages. Everyone we’ve sent participated in the 2016 wildfire response giving us a comfort level in logistics and understanding the people of Ft. Mac”

Kyle Winston, President of CRU GROUP, in a press release carried by Canadian Underwriter

The key is that they sent people that participated in the 2016 wildfire. They are American adjusters that were brought in to respond, and have kept up their credentials. There were perhaps a few still in Alberta, cleaning some things up from the flooding claims, but the rest were brought in once the hail hit Calgary.

I read an interesting blog article this morning while doing some research, with a great idea (that we will come back to), on a site called Here is how they describe the catastrophe adjusting (specialist) firms:

Essentially, the cat claims company is going to roll into town and write estimates as fast as possible, usually leaving a mess in their path. Some adjusters at these catastrophe companies will never be heard from again, while others will be too busy to deal with any after-the-fact issues with the file. The cat company might leave (or be under contract to leave) one person who deals with cleanup, or worse yet, they will send these messy time consuming files to a local firm. This is the only business in the world that gets away with this type of mentality.

Uncredited author,

This sounds really familiar to me, and even my firm had to manage when people returned to their home branches and left files in disarray. It happens, everyone is busy, and some things slip. The insurers expect it, and you take it as a learning opportunity. Except in this case, these adjusters aren’t employees. You can’t use the teaching moments on them, because they’re already working for someone else on another storm loss. So, the mess is left to be cleaned by a local firm, or in house adjusters, or one or two skeleton staff that have been left behind.

The first question: how did they get in?

That’s a very interesting question. First, adjusters are essential workers. So, they have a fairly watered-down web page from the federal government that they can rely on. However, they don’t have the IBC letter confirming the event is a catastrophe. While they should be required to have a letter for CBSA, it seems they don’t need one, as IBC never issued one. So, shame on the IBC.

Next, how are they getting across the border anyway? Who knows. Perhaps it’s the essential worker piece. Perhaps it’s the well-known Alaska loophole which has already plagued Alberta prior to the hail storm. Perhaps they don’t get asked once they claim to be an essential worker. Either way, the border shouldn’t be letting them in.

As to the Alberta Insurance Council – the only thing regulating independent adjusters in the province – they only are responsible for licensing. If theses individuals hold an Alberta adjusting licence in good standing, then the AIC isn’t going to get involved with them coming in to work.

The next question: did they self-isolate?

I’ll answer this question with my belief: no, they did not self-isolate. Admittedly, this is only opinion and not proof, however I have calculated this in a scientific manner. Using a very sophisticated tool called a calendar, I put my finger on a specific square – Saturday, June 13, 2020. I then took information received from two reliable sources who I will not name, and confirmed that there were instructions provided to these American adjusters to be in Calgary and present for a meeting on the following Tuesday, June 16, 2020. Now let me see… carry the three… that’s 4 days. Irrespective of that, the Global article was published on June 29, which is a scant 16 days post-hail storm. I just don’t buy that they have self isolated, and they were out “in the wild” in Calgary working within that week, for sure.

Here’s how I know that. CAT adjusters are paid on a daily rate. If they are present in the area, they get their daily rate; they get it for the day(s) they are travelling to the affected area too. Let’s be generous, and say the insurance companies have now moved that daily rate up a bit, and it’s now $1,000 per day for some easy math. There is not a single CAT firm that will pay $14,000 for an adjuster to self-isolate, in a hotel, where they will have to interact with hotel and restaurant staff, before that adjuster can start working and earning the company revenue. So, let’s just assume that self-isolation to protect Canadian citizens didn’t happen.

Now we can review where these folks are from. According to the Global news article I linked to above, they are from: Texas, Florida, Oklahoma, Mississippi, Utah and South Carolina (based on the licence plates they could see). I was wondering what the COVID-19 situation looked like, although with Texas, Florida, and South Carolina there is no need, considering how they’ve been in the news. However, to provide a full picture, here’s what that looks like (all data from 1point3acres):

So, they have come from areas that are having huge spikes right now like Texas and Florida, and aren’t self-isolating. They probably aren’t using masks, or are only doing so under duress or order from their employer. Essentially, I really don’t trust that aspect of things, and I’m not on the far-out-there ledge of COVID-19 fear to begin with.

So they’ve crossed into Canada on what I can assume is a pretext; they haven’t self-isolated and are putting Canadian citizens (who have suffered a loss already) at risk; and they’re essentially taking good paying jobs away from skilled workers in Canada. How this hasn’t already become a media story, I don’t know.

What should be done?

To start with, I think the insurers bear a huge responsibility here. If any form of regulation comes out of this, they have themselves to blame for these two incidents. And to be clear with my thoughts, I think this sort of behaviour should be regulated.

When adjusters go to the US, they don’t need a letter saying something has been declared a catastrophe. They need a letter from an employer that confirms that there are no capable American citizens that are available to take that job. In the protectionist minded vein that America is currently enamoured with, this is the least we could do to prevent American adjusters coming up here for temp work when we have Canadian adjusters ready and willing to work. Both Federal and Provincial governments should agree to enforcing that.

The insurers and the IBC should pledge to hire Canadian adjusters, before considering foreign support. This includes for one-off, fly-in large losses when occasionally get handled by international adjusters from the US or the UK. If you write business in Canada for Canadian policyholders, this is kind of the least you could do. This is especially true in this case, with TD Insurance (a chartered bank) and SGI (a provincially-owned insurer that also owns the Insurance Corporation of PEI) being the ones hiring foreign adjusters. Also, IBC should stop taking the position that they only represent member companies when the interests of those member companies are tied up with independent adjusters. Work with CIAA. Commit to a formal working relationship with them, even if it’s just part of a crisis and catastrophe response plan. Don’t pretend that they aren’t part of the insurance industry, as they are, and they’re integral.

Next, the Insurance Brokers’ Association of Canada (IBAC) should stand behind the independent adjusters. It’s the IBAC’s clients who are interacting with these adjusters, who are getting a far higher risk than they should be expected to bear. IBAC and CIAA should present a united front to the insurers, who are swayed by the former organization, and have far too much power over the members of the latter group.

Finally, the IBC should work with CIAA when a large storm or catastrophe event occurs. The CIAA has managed catastrophe claims as an intake and distribution hub in the past, and can do so, ensuring that member firms bring in the right capacity, and that claims volume is dealt with, managed, and audited appropriately. I was a proud member of that organization for years, and I know that the capability of putting competitiveness aside to spread the workload amongst member firms is not only there, it’s something that the group is eager to prove outside Atlantic Canada, where it’s worked well.

We need to be proud of our home-grown industry. We need to support the adjusters in the marketplace that are in that market week-in and week-out. They help us when they’re too busy. We can help them when they aren’t but should be – cant we?

Imagine if, instead of hiring these foreign workers, we re-hired the 200 furloughed Canadian adjusters? That, of course, after everyone that was still working had filled their book and couldn’t take any more. I have spoken to many people, and even today there is a tremendous capacity with local firms in Calgary to take in claims. These people are already working, and have families to feed. Let them work to their capacity. Then let’s bring some of that fuloughed talent back!

If you happen to be a Calgarian that was affected by the hail storm, I’m sorry, and I hope you and your family are all well. There is something you can do, though – if an adjuster comes knocking on your door with an American drawl, please call your insurer and ask for someone else. Do your part.

Happy Canada Day

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Insurance is my profession, and one of my passions. Motorcyclist, runner, skier, photography newbie. Nerdy tech geek, craft beer enthusiast. Thoughts are my own. Snark is omni-present.

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