Loss reporting

Transcending the Tweet: Loss reporting in the digital age

David Cox, Chief Executive Officer at MatthewsDaniel, the leading London-based international loss adjusting and marine warranty surveying firm, discusses the significant impact of the modern era of communications on the perception of losses and the need to retain professional objectivity despite the ‘noise’

The loss of a ship; the ringing of the Lutine Bell; the Lloyd’s waiter, a trusted scribe, entering it in the Loss Book. A centuries’ old tradition of committing to record, and thereby to fact. The Lutine Bell, recovered from the wreck of HMS Lutine in 1858, came to be used to announce news of an overdue ship to those in the Lloyd’s market. It was simply struck once when a ship was known to have been lost, and twice for news of a safe arrival.

What place does the Lutine Bell, a most basic form of communication, have in the modern world, at a time when shipping and insurance are increasingly reliant on technology, and data from ships can be transmitted across the world in a matter of moments, quickly becoming common knowledge and therefore construed as fact?

Knowledge itself is power. Knowledge, and the sharing of knowledge, has been at the centre of insurance since its earliest inception. Lloyd’s of London arose alongside the desire to share knowledge; to exchange ideas; and ultimately to trade.

But trade can breed sharp practice. A selective omission, a partial truth, or perhaps an outright lie are all inherent dangers of trade, of getting the best deal possible.

The consequent desire to establish the true condition or ‘class’ of vessels to be insured led to the creation of thus-named classification societies. Such names as Bureau Veritas; Veritas, the Roman goddess of truth.

OBJECTIVE INFORMATION

Truth? What renders something true is a definition too long and philosophical to discuss here, so we should perhaps allow ourselves to consider truth as being only that which may be established objectively. Objective information facilitates trade leaving the subjective elements to be weighed-up subjectively by the parties.

Objectivity requires independence and impartiality. This is the

Knowledge itself is power. Knowledge, and the sharing of knowledge, has been at the centre of insurance since its earliest inception. Lloyd’s of London arose alongside the desire to share knowledge; to exchange ideas; and ultimately to trade.

premise of the surveyor, the party sent to gather knowledge. Translated and transcribed truthfully, this, in turn allows trust. Trust that the knowledge shared is objective fact, true to the greatest extent possible.

Throughout the history of the insurance market, insurers have relied upon surveyors to provide knowledge; trusted information to be acted upon. Be it detail of a casualty in a far-flung place, or the details of repairs being undertaken in a major port, surveyors have been tasked to report accurately to insurers, typically in writing.

Whilst these reports have been shared in a variety of forms, they have always consisted of established, considered and objective information; a document destined to become record long after the casualty has passed and repairs are completed. By their very nature they have to be prepared with care and take time. Timely is not immediate, and thus should not be confused or clouded with the sensational. The report is not meant to be a news story.

Most losses are not newsworthy and are only of interest to a few parties. However, large or unusual losses do attract attention from observers, interested and disinterested alike. Groundings attract the attention of the concerned parties and the general public; and pollution attracts publicity and the scrutiny of all, some with particular agendas, political or otherwise. These losses make headlines, in the trade and the national press.

TRIED AND TESTED

Commentary on such losses arrives unsolicited in email inboxes, in LinkedIn feeds and Twitter tweets and retweets. They reach underwriters, actuaries and chief executives directly. They circumvent the claims practitioners. They circumvent the surveyor. They circumvent the tried and tested practice.

Is this a problem? Do these stories circumvent the truth?

The very reason the claim has ended up being reported via such platforms is that there is something of interest. It is only natural that the interesting is focused upon, perhaps exaggerated, and that the mundane and prosaic are overlooked.

At a simple level this may mean confusion, as inaccurate or incomplete information enters the chain at different points. This leaves the surveyor to defend their own work, the timeliness of their reporting, and claims practitioners having to smooth internal tensions.

At another more complex level, it may result in a lessening of trust between the market and their client. Is the client withholding information, is the insurance market sharing information it shouldn’t? It is perhaps no coincidence that the increase of non-disclosure agreements in recent years has been alongside the rise of fast, easily accessible and digestible news feeds.

How can it be managed? Surveyors can do more to ensure the delivery of their knowledge is timely and convenient. It will, however, always be the case that considered reporting is a slower vehicle than gossip.

Trusted and accurate reporting, in good faith, is the very foundation of Lloyd’s, and of insurance more broadly. A tradition of truth, transcending the tweet.

“Throughout the history of the insurance market, insurers

have relied upon surveyors to provide knowledge; trusted

information to be acted upon. Be it detail of a casualty in a

far-flung place, or the details of repairs being undertaken in

a major port, surveyors have been tasked to report accurately to insurers, typically in writing.’’

David Cox, MatthewsDaniel