Cleanfax, September 2019

As restorers this juncture presents a couple of options The first would be to reactively accept the conditions evolve with the industry recalibrate and refocus our efforts toward adaptation to these trends Many of us have been doing this for years with less than satisfying results The second option is to take a more proactive approach This entails identifying the issues and their root causes building a strategy to address the issues and then uniting as an industry to speak to the issues and drive positive change As you may surmise I am firmly in favor of the latter approach The purpose of this article is to build a case for proactive advocacy for the best interests of restoration companies This wont be an easy task Hard work will be required and the engagement of RIA contractor members will be critical to our success I hope to detail a vision for a path that we can all embrace for the good of our businesses and the strength and sustainability of the property repair industry What is the problem In an article I wrote for the Restoration Industry Associations RIA C R journal Contractors Its Time to Take a Stand from November December 2018 I describe a situation in which an insurance carrier refuses any payment on a water mitigation claim due to a technicality in document upload It is not my intent to relitigate that argument but rather to expand on some of the issues that restoration contractors face That articles thesis poses a somewhat grim outlook for the restoration industry however I continue to see challenges emerge that reinforce this position The thesis is this If restoration companies are unwilling to unite advocate for sustainable claims practices and take a proactive approach with insurance carrier claims policies then the restoration industry as we know it will cease to exist within a decade The claims policies I refer to go much deeper than the specific policies that a carrier dictates to issue payment The issues we face are many and they all impact the entire claims process that a property restoration company must navigate in the course of their day to day operations What follows are some examples of the challenges and threats we face Realistically each of these areas of concern is not only necessary but essential in the claims environment However there are some key questions that each restorer and the industry at large should be examining if we are going be able to operate our businesses sustainably These questions are not rhetorical they are not intended to be presented with sarcasm or bias This isnt a time for conspiracy theories but we would be exceptionally naive if we were to think that the largest fiduciaries in the world who incidentally are the repositories of the largest quantities of data in the world were looking out for any interest other than their own and that of their shareholders Example 1 Pricing scoping platforms Im not going to beat around the bush Xactware and its parent Verisk are massive companies Xactwares main platform Xactimate is an incredible estimating and scoping tool and when used as such it can benefit the restorer in many ways In fact Xactimate was developed by contractors several decades ago But how much do you know about Verisk Here are details for your consideration Verisk is a publicly traded company with a market capitalization at the time of this writing of a little more than 19 billion Verisk reports 21 billion in revenue per year and their adjusted net earnings in 2017 were 630 million That is a 29 net margin income Keep this number in mind when you are defending a 10 and 10 overhead and profit argument Before they went public Verisk Analytics Inc was owned primarily by American International Group AIG Travelers Insurance and The Hartford When Verisk went public in 2009 it was the largest initial public offering IPO since Visa had gone public a year earlier in 2008 These insurance carriers were able to divest their ownership after the IPO Verisks stock ownership is now largely diversified between mutual funds insurance companies exchange traded funds and individual investors What is Verisks mission Their website proclaims Verisk provides data analytic insights to customers in insurance energy and specialized markets and financial services to help them make better faster and more focused decisions that minimize risk and maximize value While the published pricing methodology of Xactimate suggests a unique and scientific approach many contractors myself included have experienced long term stagnation of pricing all while the experience in the marketplace is the opposite with labor rates increasing rapidly This reality should prompt restorers to grapple with the Discuss the future of restoration and this article at the Technical Fire Restoration Summit co located with ISSA Show North America November 18 21 in Las Vegas Navigate to show issa com SEP 2019 cleanfax com 17