Secrets to mastering large catastrophe losses

Thomas McGuire is the founder and lead facilitator of Large Loss Mastery, a series of training courses that seeks to arm professional loss adjusters and restoration and remediation specialists with the knowledge and tools they need to handle any large-scale commercial loss event. His 30 years of industry experience in large loss mitigation and restoration, following everything from natural disasters to terrorist attacks, have given him unique insights into these often complex and daunting large loss events.

How would you define a “Large Loss”?

A “large loss” is not solely defined by a dollar value. It could be as low as $10,000 or as high as $6 million. It is more useful to consider the complexity of the project and the technical challenges that it poses.

Typically, a large loss will require a high degree of specialist knowledge and experience. It will test your resourcefulness and agility, and require you to leverage a wide range of skills. You will need to liaise with professionals from different disciplines, and work to synchronize the output from numerous different areas of expertise to deliver the best outcome. In addition, a large property damage loss is also more likely to attract a third-party audit, which brings its own distinct set of challenges.

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What changes have you seen in this market during your 30-year career?

There has been a massive increase in the number of companies working in this area. When I started out, there were only a handful of players handling large-scale commercial losses at a national level. Nowadays, there are hundreds of such companies on the national stage. Looking at a regional and localized level, you can find thousands of companies dealing with these types of loss events.

Unfortunately, this growth has led to an increasing gap in experience, knowledge and understanding between loss adjusters, risk managers, and remediation and restoration specialists. As the gap widens, and there is less appreciation of the role and skills of each specialty, we lose the opportunity to learn from each other and develop the best practice policies which could transform our industry.

For example, adjusters often wonder how restoration companies come up with their cost estimates. Are they just numbers plucked from thin air? Is there a standard formula, and if so, what assumptions are made within the model? By understanding the techniques and tools used by restorers and consultants to accurately estimate projects and create effective damage assessments, adjusters can develop the understanding they need to put together highly efficient critical plans and customer communications. This knowledge bridges the gap between the two disciplines and helps cement a mutually beneficial relationship founded on professional respect and open communication.

What are the greatest challenges for professionals looking to improve their skills in this area?

It is important for professionals to recognize where their strengths lie and where their knowledge is strongest. However, it is even more important to appreciate where there are gaps in their understanding. In other words, know what you know and more importantly, know what you don’t know.

One of the biggest risks in the wake of a large loss event is over-promising and under-delivering. The only way to guard against this is by having a realistic appreciation of your own capabilities and a proactive approach to improving the breadth and depth of your skill set.

When you are faced with a large loss, it is easy to be overwhelmed by the scale of the challenge, rather than approach the loss event in a pragmatic manner. This is best achieved by breaking the problem down into parts and dissecting it, assessing the damage, estimating costs, discerning the scope of work, and applying customer priorities and the critical path plan needed for remediation. The scale of the loss itself should not change the manner in which you approach it.

How do you go about achieving large loss mastery?

To achieve mastery over these complex losses you need to develop a fuller understanding of every aspect of adjustment, remediation and resolution. In order to compose a solid proposal that will fit with any size project, you need to start at the beginning with an effective damage assessment. This is arguably the most critical element and considered the foundation of the project, which can help avoid many potential obstacles.

Then it pays to evaluate each stage of the process. This will most likely include project planning, time and materials contracts, critical path thinking, critical path creation and management, vital document recovery, job cost management, project documentation, and customer and third-party communication. Essentially, you are looking to become an expert in every area by absorbing the key competencies from numerous disciplines.

Of course, learning to manage a loss event in theory is only part of the puzzle. One of the best ways to link theory to practice is through case studies. By assessing and evaluating the procedures and protocols applied following a historical loss event, you can inoculate yourself against some of the more obvious pitfalls and prepare yourself to act successfully and decisively as events unfold around you.

If you could offer one piece of advice to anyone preparing for a career in large loss management, what would it be?

It is hard to overstate the value of learning from the established best practices of other professionals. Working through scenarios with experts in different but associated disciplines allows you to share knowledge and insight, and gain both a broader and more nuanced understanding of adjustment, remediation and resolution. Always understand and embrace your strengths and weaknesses, and never stop growing your knowledge base, which further expands your capabilities and capacity.

Jeff Moore is executive vice president at American Technologies, Inc., and has over 20 years of experience in contents restoration, environmental remediation (asbestos and mold) and construction related to fire, water and insurance-related damage. ATI is the nation’s largest family-owned restoration contractor with about 1,400 employees in 20 offices. More information on McGuire’s courses is available at Large Loss Mastery.