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January 22, 2010

Alan FitzGerald’s speech as President of Insurance Institute of Cork at their Annual Dinner.

SPEECH 87th ANNUAL DINNER 22nd January 2010 Insurance Institute of Cork

Deputy Lord Mayor.
President of the Insurance Institute of Ireland, Adrienne O’Sullivan.
Fellow Presidents of Dublin, Galway, Limerick and Sligo.
Distinguished Past Presidents of the Insurance Institute of Ireland.
Distinguished Past Presidents of the Insurance Institute of Cork.
Members, Guests, Ladies & Gentlemen.

It is a great honour for me to stand before you and address the 87th Annual Dinner of the Insurance Institute of Cork. However, as I do so I think,
why put your head above the parapet and leave yourself exposed so to speak.

I am honoured to be the President of the Insurance Institute of Cork but when first faced with the prospect, my mind went back to 1974 when as a 12 year old, soccer and “Life on Mars” by David Bowie were the only things that interested me. However, I did notice my father Ray appearing as President of the Insurance Institute of Cork on the Evening Echo and Cork Examiner accompanied by the likes of Peter Barry and Jack Lynch.

I recall my sister June, who is now a successful Artist, handwriting place names for the Annual Dinner and drawing the dinner plan.

So I suppose it is in my blood and I am proud of the tradition and indeed the huge contribution given by Ray to the Insurance Institute of Cork and at national level. Ray is here tonight and when it comes to Institute matters, he has a special dedication,
and indeed,

But those were different days
and the stories are legend. An appointment in the country became an all night session and a stroll down the South Mall meant you knew every second person and indeed every second person was involved in insurance.

As stated in Stanley’s introduction I am a Chartered Loss Adjuster but I act for both Insurers and members of the public which in today’s market is rather unusual. An Adjuster usually acts for the insurance company and an Assessor acts for the Policyholder. However my attitude is that you do a good job for whoever pays you as long as you act in a proper and professional manner.

On November 20th our business was put in the shop window with the widespread flooding in Cork City and County areas. Insurance companies to their great credit acted quickly and interim payments on balance were sanctioned immediately. However, it is worth remembering that certain Insurers refuse to sanction interim payments at all. Loss Adjusters seconded personnel from other offices but the number of claims was overwhelming. Further, the advent of burst pipe claims in December resulted in unprecedented pressure on Loss Adjusters. Insurers therefore cannot expect or indeed demand the same level of service and standards. Big delays in processing and settling claims are already being experienced which calls for flexibility on the part of Insurers and the removal of arbitrary retentions would be a good start.

Assessors acting for the public have a huge role in guiding clients and helping them through this traumatic period. Every Loss Adjuster will tell you that they could not provide this service themselves and Adjusters will admit that they welcome the involvement of Assessors on the basis it takes the heat off them. Within a week of the floods the Irish Times had a notice warning members of the public that to engage a non-regulated Assessor was a criminal offence.
As it stands a large number of Assessors are not authorised by the Financial Regulator and this notice was the first evidence I saw of the Regulator taking an active role in this area notwithstanding the fact that the Insurance Mediation Directive has been in place for at least three years.

Let’s hope the incumbent in the Financial Regulator’s office doesn’t adopt the approach of his predecessor when it came to banking matters.

Insurers have bemoaned the existence of Assessors for some time. However in my view if they want to control Assessors, they can do so by paying their fee. This practice is widespread in other countries as clearly the move away from impartiality by Loss Adjusters has left consumers exposed. Ironically the majority of the experienced and qualified Assessors are former Loss Adjusters driven from loss adjusting by low fees and the move to a process and audit driven approach.

The loss adjusting profession has changed beyond recognition in the last 10 years and this is primarily due to the implementation by Insurers of the loss adjusting panel system. This effectively means that Insurers not only control what Loss Adjusters do but how they do it. The dreaded audit has Loss Adjusters hamstrung. The reduced number of Loss Adjusting Firms means they cannot cope with the volume of claims a major weather event brings despite the best efforts of their staff.

And how did this happen?
Well, Adjusters have themselves to blame by handing control of fees to insurance companies which effectively removed the Adjusters independence and indeed impartiality.

When it comes to insuring a commercial or domestic property, my advice to any Policyholder is to always arrange insurance through a Broker. This is clearly necessary to ensure adequate and appropriate cover but

also in the context of claims settlement as in my opinion the approach by certain Insurers is in total contrast to those who operate through Brokers. For example,

refusing to deal with a burst pipe claim which happens in January 10 because of unoccupancy due to flooding in November 09 is no way to enhance ones reputation or

indeed is it helpful suggesting that claims not submitted within the 30 day Policy stipulation will not be considered.

The refusal by certain Insurers to engage qualified insurance professionals has in my opinion, serious consequences for the Policyholder unless he has a Loss Adjuster or Loss Assessor representing him. An insurance company should not base their decision to repudiate a claim on an inspection carried out by a builder or tradesman. Such a decision should only be made if a qualified Loss Adjuster or Insurance Practitioner is involved. Is this not the very reason for the existence of CPD?

I perceive an adversarial approach by certain Insurers which clearly for property claims is short sighted as I recall the words of John Levis, who is my Guest tonight and with whom I worked in Hibernian, “the only good claim is the settled claim”.

The Insurance Institute of Cork has had a very busy year and we ran a number of lectures including a presentation by Richard Hanson-James, Loss Adjuster, on the issue of retentions this is where Insurers hold back part of the settlement pending completion of works. Mr. Hanson-James, a Chartered Loss Adjuster and legal expert, working in the U.K., suggested that the unusual policy in this country of holding of arbitrary amounts for retentions was outside of the insurance contract and had no legal basis.

I agree with him.

Surely this is something for the Financial Regulator to look at?

Our lecture series included a joint lecture with LIA on “Dispute Resolution” as applicable to “Life & General” Policies but unusually given the subject matter this was accredited on the general side only. Numbers were slightly down for the Annual Charities Lunch, notwithstanding this, it was a very successful day and we raised over €5,000 for insurance charities. The Insurance Institute of Cork has also made a donation to the St. Vincent de Paul Flood Victim Fund. We have also made a donation to the Haiti Earthquake Fund.

In my capacity as President, I was delighted to attend RSA’s opening of their refurbished premises at 1 South Mall where indeed I started my career and their commitment to Cork was widely welcomed by Brokers. I attended Standard Life’s celebration of 175 years in Ireland. I also attended the ARIS Annual Christmas Lunch and they go from strength to strength.

I would like to thank the Insurance Institute of Cork Council members for their help and support during the year and I wish my Deputy, Finbarr Moloney, every success. Finbarr also oversaw the running of The Insurance Institute Exams and over a thousand students sat the exams in Cork last year. This was almost a 100% increase on the year before.

Our Annual Dinner continues to be the highlight of the social calendar and a huge amount of effort goes into organising this event and I would like to sincerely thank my Dinner Secretary, Rosaleen McKeown for her huge effort in organising this event and indeed for her input into the Charities Lunch. Her organisational ability knows no bounds.

A special thanks to Mary Scannell, our Vice President, for her advice and help throughout the year. Thanks also to our Treasurer, Susan Stanley and Sports & Social Officer, Rory O’Sullivan for their work during the year. Thank you also to Tom Nolan and Paddy Wallace for all their help.

Thank you also to our Toastmaster and my friend, Stanley Knott. This is the first time he has carried out this role at our Dinner and I think he has done a tremendous job.

I would like to thank the management and staff at Morans Silversprings who gave us every assistance in continuing to make this a special occasion.

I would also like to thank our Speakers George Lee and Alan Cleary. Alan is outstanding in his field as an After Dinner Speaker – let’s hope he performs to the same level indoors! George, good luck in your future role as Minister for Finance.

On a personal note I would like to thank my wife, Gillian and our children, Barry, Ray, Niall and Anna for their support during the year.

Ladies & Gentlemen, one of my final duties tonight is to propose a toast and I am taking an unusual step in that the President normally toasts the City of Cork but I feel compelled to thank my father, Ray, for introducing me to a business which is varied and challenging and I would like to acknowledge the qualities he represents,

integrity, honesty and loyalty.

Ladies & Gentlemen, I would therefore ask you to charge your glasses and be upstanding and join me in a toast to

Ray FitzGerald.

I thank you and hope you enjoy the rest of your evening.

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