This piece originally appeared in the February 2022 edition of DS News magazine, online now.
During our recent visit to DIMONT’s headquarters in Dallas, the scene inside looked like that found in countless other offices around the country during the past two years: amidst a sea of desks, a handful of heads could be seen above the cubicle walls. As with so many companies working to navigate the challenging waters of an ongoing pandemic, the majority of DIMONT’s office staff was working remotely. But as we spoke with CEO Steven McCaffrey and President Laura MacIntyre, one of the topics they were most eager to discuss involved a different kind of remote work: namely, the expanded capacity for on-site, “boots on the ground” adjusters that DIMONT can now offer clients, due to the recent acquisition by the Bensalem, Pennsylvania-based company Metro Public Adjustment Inc. (MPA).
First announced in August 2021, the partnership between DIMONT and MPA brings together “one of the largest providers of specialty insurance claims and loan administration services to the residential mortgage industry” and “one of the largest public adjusting companies in the United States.” That announcement included leadership changes within DIMONT itself: MacIntyre, formerly CEO, became the company’s President, while McCaffrey, previously President of MPA, took over the role of DIMONT’s CEO.
Between MacIntyre and McCaffrey, the two bring decades of industry experience to the table. McCaffrey founded MPA in 1993, and led that company for nearly 30 years prior to the merger. MacIntyre previously served in leadership roles for companies such as DocMagic and ServiceLink, as well as serving as one of Black Knight’s COOs for nearly 18 years.
With mergers and acquisitions regularly reshaping the face of the industry amid ongoing challenges stemming from the pandemic and its related economic ripples, DS News asked McCaffrey and MacIntyre what led to the acquisition, how it has fundamentally changed and strengthened both companies, and what DIMONT is excited to bring to the table for its clients in 2022.
The Power of Partnership
When discussing what the union of DIMONT and MPA brought to each entity, one phrase that kept coming up during our interviews was one I’ve already mentioned: “boots on the ground.”
As MacIntyre explained, hazard claim companies have traditionally been limited to only adjusting claims online. “We did not have the ability to adjust claims in person,” she said. “Metro has been around for 25-plus years. They are the leading public adjusting firm in the industry. They bring the boots on the ground adjusting, which is critical, especially in high-dollar claims and complex peril losses.”
Estimating that the partnership between DIMONT and MPA has increased DIMONT’s “boots on the ground” capacity nearly tenfold, McCaffrey said that the company is now better positioned than ever before to tackle the headwinds that 2022 may bring: shifting volumes, a continued strain imposed by the health crisis, and an overall need to be able to scale strategically and navigate those headwinds successfully.
“We’re able to scale up and to scale down because of the way we’ve structured,” McCaffrey said, adding a note that DIMONT is a “debt-free company” that “has the financial strain to be able to handle all the needs of the servicing and hazard claim community.” Chief among those needs is the ability to service and adjust claims on-site. “No other hazard claims company does that,” McCaffrey said.
MacIntyre also noted the strain that labor and resource costs have put on many industry organizations over the past two years, and how the merger between DIMONT and MPA has taken this into account.
“They’ve been able to incorporate those additional charges and costs into our model so that our clients are getting the highest amount of recovery for their loss,” MacIntyre explained. “That is absolutely critical for our clients. MPA has really been able to open our eyes to additional ways we can provide more value and benefits to our customers.”
MacIntyre recalled that, as the companies went to work blending their teams and processes, the team went back to review some prior filed claims, putting them back under the microscope to see if there were any missed opportunities that the expanded resources and bandwidth of the MPA union could have enabled them to tackle more efficiently or thoroughly.
“We scoped several of our claims, and there were things that we had not had access to in the past in terms of filing claims,” MacIntyre said. Leveraging those new tools and perspective, MacIntyre told DS News that DIMONT has delivered “over $1 million in additional recoveries, just in the last six months” to clients, courtesy of these revised filing processes.
“In the past, a claim was a claim was a claim,” she added. “You file a claim with the insurance company, and you either get a positive result or you get a denial. Now, with the acquisition of DIMONT, we have additional leverage, we have additional information, we have better claims. We have more thorough documentation. Our propensity to get a denial is a lot lower than it was before.”
That, of course, is in addition to the advantages offered by being able to adjust high-dollar claims in-person, rather than from behind a computer screen in an office far away.
“[Remote adjusting is] acceptable in certain scenarios, but in most scenarios, you need that backbone of knowledge from being on-site,” McCaffrey said. “A lot of adjusting is the mechanics and understanding how the loss occurs. So often, people think they had a plumbing loss, and it was actually a roof leak, or vice-versa, because somebody didn’t properly identify the cause of loss.”
“That is going to absolutely be a gamechanger for our clients because now they know their collateral will be protected and they will receive maximum recovery dollars for their losses,” MacIntyre continued. “And investors are looking at their book of business, trying to predict future losses and ensuring ways of reducing servicing costs, knowing additional defaults are on the horizon.”
In addition to updating the book of best practices, DIMONT is also now branching out into the commercial space—something the company hasn’t really had the capacity to do in the past.
“That’s an area that we think we can provide significant value, and we’re also moving into providing assistance within the credit union space,” MacIntyre explained.
McCaffrey also spoke to DIMONT’s focus on assisting clients with compliance, explaining that the company is “extremely active” in ensuring the industry complies with all necessary licensing.
McCaffery said, “We head up the compliance of public adjusters nationally through our association and collaboration with the American Association of Public Insurance Adjusters. We’re on the cutting-edge of information, the cutting-edge of knowledge, the cutting-edge of the adjusting process that simply didn’t exist in DIMONT before.”
Finally, because DIMONT and MPA’s business models are run independently but can work jointly, McCaffrey notes that the companies “always have clients of service, but then we can shift the workforce over to the servicing side as needed.”
Metro Public Adjustment has trademarked the phrase “The Science of Adjusting” to describe their approach to their work, so it’s not surprising that they’ve backed up that phrase with an extensive library of curriculum and training materials designed to bring new team members—or newly acquired companies—up to speed on that science.
MacIntyre explained that MPA brought to the table “a library of training materials, as well as a curriculum that we’ve never had access to.” Much of that curriculum was overseen by Bill Underkoffler, MPA’s Director of Adjusting, who also runs training for the company. (See the sidebar section for more insights from Underkoffler.)
“Bill put together a curriculum specifically for DIMONT, understanding how we do our adjusting,” MacIntyre continued. “He brought his expertise into our process, and he spends a significant amount of time with our adjusters and our document review specialist, to help identify damages.”
McCaffrey and MacIntyre both spotlighted that focus on training and continuing education as a major priority for DIMONT, and something they were eager to showcase. MacIntyre says these educational initiatives help ensure the DIMONT team is up-to-date on everything they need to be, and also bolsters the company’s retention and tenure within the team.
“We have several folks that have been here since the very beginning, and they’re almost always looking for additional opportunities to help grow within their own company,” MacIntyre said. “We’ve spent a lot of time on leadership. We’ve spent a lot of time on training, and with the acquisition, it’s been helpful for the employees to get rejuvenated and spend some time on learning new skills or learning a new way to adjust. Our focus is on training and providing value to our customers and to be able to show our customers the additional value we can provide.”
McCaffrey also noted that this commitment to education extends beyond just internal training. DIMONT has made aspects of that curriculum available to servicer partners as well.
“Some servicers want to adjust their own claims, and they have internal departments. DIMONT is offering complimentary webinars and education—on-site or via Zoom—to educate their staff to make sure they get the best,” McCaffrey explained. “We feel that in order to service this industry, whether their adjusters or our adjusters work on the claim or if the insurance servicers have their own departments, we want to be their resource for knowledge and to make sure that they give the best possible product and service to their investors.”
Processing vs. Adjusting
As McCaffrey explains, one motto at DIMONT is “We adjust claims.” While that phrase might seem self-evident, he explains that it nevertheless highlights an important difference that sets DIMONT apart from other hazard claim companies.
“Those companies process claims,” McCaffrey said. “Adjusting is a whole different animal. When there’s a large catastrophe, like a hurricane or tornado, trying to assess that damage from behind a computer screen, to us, is not acceptable.”
As such, DIMONT deploys adjusters on-site to assess and adjust losses to protect the collateral for their clients.
“The obligation of the servicer is to protect their investor, and the best way to protect the investor is to make sure nothing is overlooked when it comes to processing a covered loss that should be paid for by the insurance so that it protects the investment.”
This ability to adjust claims on-site can be a huge benefit when navigating the challenges of damaging weather and climate-related threats that have been on the rise in recent years. According to MacIntyre, another element that helps DIMONT provide cutting-edge service when weather strikes is the 25 years’ worth of data the company has in its systems.
“We have a lot of data and predictive analytics that we can do based on if a hurricane hits a certain area. We can then work with our clients to determine if they are going to be impacted by a given weather event. Then, we assess the peril and significance of that damage,” MacIntyre explained.
“A big part of the process of adjusting claims is not to leave money on the table that the investor is entitled to,” McCaffrey said.
MacIntyre notes that DIMONT also creates scorecards internally, but also integrates that data with its clients and performance metrics so they can see how the company’s adjusters are performing.
“As a vendor, you’re always trying to figure out better ways to service your customers,” she continues. “Throughout the pandemic, that volume may be stalled, temporarily, so how could we take what we had and turn it into something? We talked to all our clients about having us go back and look at prior stuff that we worked on to see if we could find any additional claim opportunities. This is a service we also offer to new clients to ensure they received all prior claim settlement.”
As volumes remained depressed, this review work allowed another channel for the DIMONT team both to maintain workload and find ways to benefit the company’s clients.
With improved processes and technology born from the union of DIMONT and MPA, McCaffrey says that the combined companies “now have the capacity to handle any major catastrophe and any uptick in volume that their servicer clients may face.”
“One of the big issues servicers have is processing claims quickly, making sure that volume can be handled, and that things do not get overlooked,” McCaffrey explains.
“We could be evaluating tens of thousands of assignments from different properties, and only determine that a handful of claims are covered. That process takes people, as well as refining that technique and allowing better data, so that whatever assignments we are given, we make sure that every single property and every single assignment is approached individually and not as in this massive gathering of assignments.”
As McCaffrey sums up, “Adjusting is a science. We want to bring [impacted servicers] back to pre-loss condition.”
Sidebar: The Science of Adjusting
Even beyond the direct impact of the ongoing pandemic on remote work, staffing, and other areas, servicers and vendors such as DIMONT face numerous issues that can make that “Science of Adjusting” challenging. Labor costs are high. Material costs are high. As MacIntyre puts it, things that were not a problem in 2019 now have grown to become significant issues.
“With our new processes and our combined business with DIMONT and MPA, we believe that we are the only option for our clients,” MacIntyre said. “We work to ensure that, from the very beginning of filing a claim, we have as much information as possible to provide to the insurance provider so that we’re not going back and redoing work, and so we are ensuring that denials are few and far between. We utilize our technology to ensure that the first claim that gets filed has the highest degree of success in getting resolved.”
With MPA having trademarked the “Science of Adjusting” catchphrase, just what does that mean in practical terms? The DIMONT team broke down several areas where they are leveraging technology designed to identify additional damage levels that may be overlooked by less thorough inspections.
Bill Underkoffler, Director of Adjusting for MPA, told DS News that the “Science of Adjusting” is, essentially, “a combination of digital measurements and digital data and subjective policies.”
Underkoffler explained, “In order to adjust the loss, you need to have what is known in the industry as ‘demonstrable damage.’ By bringing in some tools and validation methods that we use in the Science of Adjusting, we’re able to put to mathematical numbers and values to damage by using tools such as digital calipers. They’re basically micrometers to show building materials that may have been decompressed by water damage.”
Thermal imaging is also another useful tool, especially in cases where water is involved in the damages.
“Thermal imaging allows us to show damage that normally would not even presentable under a policy because they don’t allow for destructive testing to identify potential hidden moisture,” Underkoffler explained.
Rather than just presenting photographs of a damaged property, DIMONT and MPA are able instead to present data showing millimeter-level changes in materials. “This may mean, for example, there’s still water trapped at a level of 23% behind the drywall,” Underkoffler continued. “That means the overall amount of moisture in the property still needs to be brought down, as it’s not at an acceptable level to prove ‘dry.’”
This level of detail can be critical, as many disasters that aren’t directly “water-related” still involve water damage as a contributing factor, such as the aftermath of fires.
“Water actually does more damage to a building than a fire does, generally, unless it burns to the ground,” Underkoffler explained.
And when it comes to water, as with everything else in the “Science of Adjusting” mindset, the devil is in the details. Underkoffler explained that it’s crucial not just to identify water damage and the extent thereof, but also to determine the type of water that is involved, ranging from clean to micro-contaminated.
“When we have losses that go into wall cavities and we have moisture trapped within insulation or drywall behind the walls, these need to be mitigated and removed differently than other losses, all based on what type of water was involved,” Underkoffler explains. “If I have Category 1, which is clean drinking water, it comes up in a building two inches deep and it drains out. I probably won’t have a real problem with trapped cavity water once the building is mathematically dry. But if I do have micro-contaminated water, Category 3, I leave that contaminated solid inside of the building, trapped forever. So, it needs to be properly addressed.”
Underkoffler also identifies smoke damage as one of the most under-adjusted losses in the industry. As with water, some of the challenges come down to identifying and understanding what sort of smoke was involved.
“We use sponges, and we send them to labs to check the materials,” Underkoffler explained. “One of the most fascinating aspects is something called ‘vapor plating,’ which is when you have a rapid discoloration change of a vinyl material.”
Underkoffler explains the phenomenon by citing a situation most of us have encountered: microwaving Tupperware that contains spaghetti sauce. The red discoloration that stains the plastic is due to this process known as vapor plating.
“Now, take a smoke loss,” he continues. “The same thing happens to building materials after a fire—even a small fire—with that acidic smoke. It attaches and changes color on vinyl building components—mostly windows, doors, and some appliances. These losses don’t get properly adjusted.”
Underkoffler also notes the importance of remaining up-to-date on code issues, as well as how they change over time. He gives the example of window sizes.
“A residential window in a bedroom is designed to fit a fireman in his pack. If the fireman doesn’t fit out that window, that’s not a safe scenario for someone in that bedroom,” explains Underkoffler.
However, those regulated window sizes may have changed in the years since a given property was constructed. Underkoffler points out that, in the case of broken windows, “the claim should not be to repair or replace the window. It should be to examine and ensure that the house is now up to code.”
This shift in focus will not only ensure the property is restored to the current safety standards, but it can also increase the value of the property.