‘People are being investigated by regulators – it is a very dynamic space’

When commercial claims expert Chay Wilkinson (pictured) moved from Sydney to Singapore in mid-2013, he knew that he was entering a quick-paced and challenging environment. But the sheer intensity of competition was what made the strongest immediate impression on the young Australian.

“The strength of the local markets is what has impressed me the most,” he told StrategicRISK from his office off Raffles Place.

“There are good insurance products and local specialists here and the market doesn’t necessarily need external capacity to sustain itself; it’s growing along with the amount of commerce in the region.

“Saying that, the amount of growth out there is certainly the reason that offshore insurers such as Lloyd’s have come in.”

Wilkinson works for commercial claims services company DCS Global. When then managing director of the firm’s Asia Pacific’s operations Jon Sitwell accepted a new position in London as head of international claims services late last year, Wilkinson was named as regional director. Now he oversees its commercial claims resolution activities across the region, which includes lines of business such as professional liability, general liability, property, directors’ and officers’ (D&O), and contractors’ all risks.

“The majority of adjusters in the region only operate in relation to general liability and pure property losses,” Wilkinson said. “But areas in which we also have real expertise are D&O, professional indemnity and other financial lines.”

Pointy-end penetration

Uncomplicated products have high penetration in the region, while relatively complicated products “are still a bit of a challenge for some insurers and brokers”, Wilkinson pointed out.

“That reflects the fact that there are relatively low claims volumes in terms of financial lines products,” he said.

“Having said that, at the very pointy end of the complicated products in D&O, there is quite good penetration based on the fact that a lot of companies on the Hong Kong and Singapore stock exchanges that are present in Asia and working across several jurisdictions.

“The local regulators are quite firm and their activity levels compared to other jurisdictions are quite high; you’re getting frequent notifications where people are being investigated by regulators – it is a very dynamic space.”

Potential exposure

Wilkinson said it was the “very personal nature” of D&O coverage that made it particularly interesting to the c-suite. “If you are sitting on a board of a company where you don’t necessarily have a lot to do with the day-to-day operations but you certainly have strategic or board level knowledge of the company, you have potential exposure to prosecution,” he said.

“There is a very rigorous and onerous requirement on directors to know an awful lot of what’s happening below them in a company, which is why there’s good penetration for D&O products.”

Wilkinson said DCS Global was also starting to “move across other classes”, such as property and medical malpractice.

“I think we want to stay as a fairly niche boutique operation,” he said. “We’re never going to have a large warehouse of people on helplines, and a majority of our clients are looking for specialised claims management for complicated products and complicated claims.”

DCS Global’s clients were usually looking for more expert claims management as opposed to “just desktopping it”, Wilkinson added.

“So, actually looking at the commercial realities of working with the insurance brokers and coming up with a commercial solution,” he said. “Trying to keep costs down and have competent local people running claims without having to ‘farm’ it out to a law firm.”

Offshore a turn-off

Feedback from local brokers indicates that one of the biggest issues in the region is the distinction between handling claims onshore and offshore. Wilkinson: “There seems to be a fairly consistent message that offshore claims handling is a real deterrent, so insurers that are writing business in the region have to come up with solutions for that. That can be placing their own people locally, increasing the amount of legal instructions, or using a service such as ours.”

DCS Global is now, as Wilkinson puts it, “getting through an awareness phase” for its entry in the region.

“We serviced clients in Asia from Sydney and Brisbane for several years, and since July last year we’ve been able to service them from Singapore,” he explained.

“We thought it was an appropriate time to come over here in terms of client interest, and now we are raising awareness of what a third-party claims administrator does, which is very different from a lawyer or an adjuster.”