The last of the Indian Average Adjusters – the historical background leading to this development
The professional of Average Adjusters is as old as maritime adventure and is referred to in text books as having been invented by Rodians of the Greece. Every maritime nation had some form of General Average - which is sharing of sacrifices and extra ordinary expenditure in an equitable manner for the common good when the ship and cargo where imperiled at sea. Most common form of General Average sacrifice is jettisoning of cargo under the Master’s orders in time of peril so as to preserve the maritime adventure from total loss. It was he who adjusted the average. With no insurance in existence each party had to bear the loss.
When insurance began to be provided the insurers felt that it was not proper for adjustments to be drawn up by ship’s master as he was an interested party and the adjustment of averages began to be carried out by the insurer’s broker whose practice is still being followed in the U. S. Soon an independent body of professionals took to adjusting averages both general and particular but then it was felt that the profession needed to be regulated by the imposition of strict norms for enrolling as member of the Average Adjusters of U.K. Thus aspirants had to have the financial wherewithal, purchase shares of retiring senior partner and public school education was considered a distinct advantage. These norms continued until it was felt by the Association of Average Adjusters of U.K. to institute examination which has become a prerequisite for obtaining full membership of the Association. But only those who fulfilled the above norms were allowed to sit for the examination.
The method of gaining admission to sit for the examination as well as the examination system itself lacked transparency thus creating disappointment and disillusionment among those who wished to become full members of the association.
Around the same time the Association of Average Adjusters of United States was formed. They too held an examination system but without precondition of financial stability and social status. The examination system was transparent and attracted those who wished many who desired to pursue this profession. This led to many aspirants from the UK taking the US examination. However, this began to be considered as a threat by some members of the U. S. Association who perceived the possibility of there being more qualified average adjusters of UK practicing in U. S. So they amended their bye laws making it necessary to be a U.S. citizen for taking their examination.
Just then a revolution of sorts developed among the Greece ship owners’ industry where ship owners forced insurance brokers to nominate in the insurance policy those adjusters who they had faith in and disregarding their membership of U.K. Association. This development gave boost to those average adjusters who had not taken the U.K. examination or had been unsuccessful in it. As the latter’s number grew a divide among hull and marine insurers began to take shape. On one side there were members of the U.K. Association and on the other those appointed on the basis of their competence and integrity. Thus a situation developed wherein there were more average adjusters practicing in London market who were not members of the U.K. Association.
As a ploy the U.K. Association offered full membership to five practicing average adjusters to join their association without taking the examination. This was done on a one time basis in 1980. Of the five only two accepted the offer with three rejecting it and continuing to be professional average adjusters without being members of any association.
About this time the Society of Average Adjusters of U.K. was formed with the first Chairman being late Kenneth Goodacre, the author of the famous book “Marine Claims”. However, the Society did not last long and the U.K. Association opened their doors to ‘subscribing members”, which included practicing average adjusters who had not taken the U.K. examination. Later, the examination became open to those who qualified by training / experience and passing the chartered insurance institutes examination.
The situation in India has been generally one of ship owners and insurer preferring average adjuster from U.K. either because of clauses in charter party or because of the own preferences. Efforts to form an Association of average adjusters by Capt M. S. Gill former Nautical Advisor to the Government of India and Tony Fernandes, a practicing average adjuster since 1980 was boycotted by the ship owners’ representatives and certain vested interests in the insurance and broking industry. The Indian average adjuster is yet to see the light of day.
It is a matter of shocking surprise that Insurance Regulatory Development Authority (IRDA) has not even mentioned the name of professional average adjuster in their regulations which expects surveyors adjusting averages both particular and general.
The situation today is that of the four firms of average adjusters namely: M/s James Clancy & Richards; M/s J. B. Boda Average Adjusters; M/s Ashwin Desai and M/s Tony Fernandes Average Adjusters Private Ltd only one is practicing viz that of M/s J. B. Boda. The work is shared between this firm and a firm of average adjusters in London market. This certainly does not augur well for the future of average adjusters in India.