Subjectivity of claims numbers 12 November 2015 Presented by: Joe - - PowerPoint PPT Presentation

STRICTLY CONFIDENTIAL

Subjectivity of claims numbers

12 November 2015 Presented by: Joe Aldous – Director

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Overview

1 The role of forensic accountants 2 Examples of things going well (and not so well) 3 Ways to help things go well

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The role of forensic accountants

1

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Where we fit in the process

Lawyer

Insurer

Co-Insurer Forensic Scientist

Loss Adjuster

Forensic Accountant Reclamation Quantity surveyor Industry Expert Co-insurer Engineer

2 4 3 10 8 5 6 11 9 7

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Forensic Accountants – common misconceptions

 Acting on behalf of Insurers to reduce the numbers  “Us” verses “Them” approach  Out to find mistakes  Over complicate matters / delay the process  Excessive and unnecessary document requests

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Forensic Accountants – the reality

Facilitate the loss adjustment process

 Working with the Insured to get to the right number  Able to simplify complex loss scenarios to Insurers

Recognise the commercial considerations

 Commercial relationship between Insured & Insurer  Preparation of loss scenarios to assist Insurers in negotiations  Assist the Insurer’s recovery from Co- and Re-Insurers

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The challenge

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Quantum -v- Advocacy

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Quantum -v- Advocacy

Civil Procedure Rules - Part 35 35.3: Experts – overriding duty to the court (1) It is the duty of experts to help the court on matters within their expertise. (2) This duty overrides any obligation to the person from whom experts have received instructions or by whom they are paid.

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Quantum

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Examples

2

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Aluminium smelter

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We didn’t agree on everything

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Rubber o-ring manufacturer

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Issue: Cause & Effect

300,000 350,000 400,000 450,000 500,000 550,000 600,000 650,000 700,000 750,000 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03

SALES

Actual sales Budget sales Date of incident

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Cement manufacturer

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Issue: Clinker

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STOCK OF CLINKER CLINKER PRODUCTION CEMENT PRODUCTION Daily Operational Capacity Daily Operational Capacity = 8,000 Tonnes = 12,000 Tonnes Spare cement capacity per day = 4,000 Tonnes

Issue: Clinker

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CCGT power station

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Issue: Flow of information

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Helping things to go well

3

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Document request lists

 Concise  Relevant  Prioritised  Explain why each item is needed  Work with information prepared

in normal course of business wherever possible

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Understand the Insured’s business

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Joint models

 Agree joint model to use (logic,

accuracy, arithmetic etc)

 Debate the underlying

assumptions

 Agree the value of differences in

• pinion/assumptions

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Narrow areas of disagreement

 Fact -v- opinion  Fact – agree what information is

required to conclude the issue

 Opinion – try and agree the

value of differences

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Good communication

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Avoid surprises

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