A “benign” claims environment has led to challenges for the loss adjusting sector, according to the CEO of Charles Taylor, which has released its half year results.
The company, which provides support services to the insurance industry internationally, revealed a 36.1% increase in revenues for the first six months of 2017, which it said underlined “solid business growth.” Adjusted profit before tax increased at a slower rate, growing by 1.2%, which the firm said was due to an ongoing programme of investment in the Group. Interim dividends also increased by 5.0% to 3.31p per share.
But while the business had a “steady start” to the year, group CEO David Marock said that the current claims environment in both the UK and further ashore has hit competitors hard.
“One of the biggest challenges for us has been within the claims environment… Up until pretty recently, it has continued to be a fairly benign claims environment, and that always makes it tougher in terms of our adjusting business,” Marock explained.
“Fortunately, we’ve still had a good steady flow of work, and certainly relative to a number of our competitors who I think have had a much tougher time,” he went on to say.
However, the nature of the claims environment means it is unlikely to stay static for long.
“I think as we’ve seen in the last couple of weeks, with the onset of hurricanes and such like, the claims environment can change at any time… I think that could easily turn, and time will tell,” the CEO noted.
The company has been making significant investment in the insurtech space, which Marock described as an area in which the business has high optimism for long-term prospects.
“It’s unquestionable that there is quite an urgent need within insurers and brokers to embrace the new technological revolution,” he said. “It’s not an easy thing to change, and I think our challenge at the moment is helping those clients, whether it be brokers or insurers, ready themselves for that change. It does take time, it does take effort, but I think the prize for them is pretty sizeable.”
Following its recent acquisitions, which have included Criterion Adjusters and Metro Risk Management, Marock said that Charles Taylor’s appetite for acquisitions is likely to continue, particularly in the UK.
“Our strategy has always been heavily organic but supported by acquisitions as well… We’ve always been willing to look at more creative approaches and solutions rather than just pure acquisitions, though we have done those too,” he said.
“In terms of going forward, I would anticipate we would continue to do those and, in reality, a fair proportion of acquisitions have been in the UK, and I can’t see why that would change.”
Despite an unsteady world climate, the business is expecting the rest of the year to be steady in terms of financial results.
“In the wider world it’s pretty uncertain, on everything from Brexit to what’s going on in North Korea, but I think day-to-day our business is pretty much in our hands, and the challenges are really about us driving forward our initiatives and leading them to success,” Marock concluded.