"Big Players" getting it wrong?
Warren Mallard's response to "The big players in investigation in Australia" by Mike Evans
I read with interest your article on the Big Players In Investigation In Australia. I was intrigued to see that only companies that carry out insurance work were considered by the author as worthy of mention. Whilst I don't disagree that they are all large companies, having had six offices and 80 operatives doing the majority of the insurance industry work for over 15 years continuously, I believe and know that big is not always good or for that matter best. Lyonswood always carried out non insurance related work and did so because this other work is the basis of what good broadly skilled investigators arise from. Lyonswood took a conscious decision to decline this work. In fact this year Lyonswood has rejected three tenders that were closed and directed at three companies only. These would have been an easy win I believe however I chose to decline them because of my passion for what I believe is the real future of the Investigation Industry. Yes I am a pioneer but many will follow after me I believe.
Whilst I agree that the bulk of the work that employs investigators is insurance work, with it comes the control of monolith insurers who end up controlling your business and slashing costs which ultimately means profits of the investigation panel members. Recently we have seen insurers attempt to bring the panel beating industry to its knees, particularly IAG Insurance and all its entities. However, together the panel beating industry is winning the battle against the insurers and now they are being paid real money for real time.
I am aware of recent demands upon the Investigation industry by some insurers with regard to what can and cannot be charged for, most of which is I believe genuine work that can be charged for, such as the contemporaneous notes of surveillance operatives. The insurance industry has always argued that surveillance operatives sit all day long in their vehicles twiddling their thumbs waiting for the monotony to end and thus they have plenty of time to do their notes whilst on the job. This just demonstrates the lack of knowledge that most insurers have about the investigation industry and surveillance. The word "contemporaneous" does not mean "as it happens" it means "of the same age or date; of the present time; belonging to the same period" A competent surveillance operative would not even consider lowering their eyes to pen notes on observations. If they did then they could not in all honesty say that they had the target under surveillance continuously. The notes of most surveillance operatives are compiled after the surveillance and when the observations are fresh in their minds, contemporaneously. These notes ought to be a genuine cost for real time and thus real money. Of course, to argue this when such a large portion of all insurance companies investigations is undertaken by so few companies would be suicide for the company who proffered the argument and the insurance companies know this. Now they have the investigation industry where they want it, firmly under their control just like they had the motor repair industry. In that industry however the tides have turned because they became united and with it grew in strength and gained the ears of the Government regulators.
Insurance companies find it very difficult to cut costs internally, this is a bitter pill to swallow because it effects them directly. Their bean counters (accountants) have demands upon them by share holders to make more and more profits and the easiest way to do this is by slashing what has been traditionally allowable charges levelled by contractors which includes investigators. They have managed this in a rather clever way by reducing their investigation panels to a couple of hand full's of companies who are all but totally dependent upon insurance work. Divide and conquer is their style and they are very good at it.
Look at the rates insurance companies paid you ten years ago, then look at the CPI for those same ten years and cringe. Look at the technology you have had to employ in that same period and the cost of it. In the motor repair industry these insurance company rates over that same period moved less than $3.00 an hour, that is, it moved from about $28.00 hr to $32.00 hr. For this princely sum a motor repairer has to provide labour, paint, tools, spray booths, loan cars etc... The end result of this insurance company greed is poor quality work. Some insurance companies now insist upon motor repairers sourcing second hand parts and if they are not available, Korean manufactured lower quality parallel parts. I am verily advised by a colleague in that industry that they are now wanting to supply the parts to the motor repairer to cut the repairer out of a paltry mark up of about 10%.
If the insurance companies screw you down on price, you have no option but to screw your operatives down on price. There is no fat left to cut within your business, you have gone backwards for over ten years already. Operatives are leaving the investigation industry in droves and getting themselves jobs in the private sector where they can make a decent living. I am aware of many operatives who were disenchanted with the actions and demands of their principal contractor employers which in turn were generated by insurance companies taking jobs with ASIC, ASIO, ICAC, ACCC etc. The insurance companies will ultimately reap the harvest of the seeds they have themselves planted, albeit a dumb harvest.
A good investigator is well honed powerful tool in the fight against crime and the detection of fraud. You pay peanuts, you will get monkeys.
I am lucky to be non dependent upon insurance companies and to be able to express the view of what I know and believe is the view of the silent investigation company majority. I am also lucky to have my own business, my own clients and ever increasing newer clients every day. My turn over has reduced but my profitability and my client base has increased enormously. I don't have eggs in the one basket and unlike those Big Players who do, will not go down the gurgler when a national insurance scheme eventually happens or when legislation changes as it did in NSW. I now carry out extremely interesting work, work that stimulates the brain and doesn't allow it to stagnate, I learn and hone my skills every day and broaden these new horizons.
One of the joys of my involvement in the Investigation industry over the past 25 years has been to champion its value to the greater public and to assist the industry members through investigation industry bodies and through training, competencies, new legislation and greater public awareness. Save for one of the Big Players I have seen none other of these other company principals do anything to further the endeavours of the industry as a whole. This saddens me somewhat as I believe the investigation industry has a broad roll in assisting the community at large. I don't necessarily blame the individual principals for this as they are too busy jumping through the insurance company hoops to spend time on the industry. Hoops that are becoming smaller and smaller. I do however level the blame upon the inability of investigators to stand tall and proud of what they do. I blame them for not letting the community know that we are skilled and competent persons of good fame and character who can assist them with their day to day crisis' and problems. We need to be vocal about what we do and at the same time, not so vocal about how we go about it. We have remained silent to our own detriment. Ask any member of the community what an investigator does and you will get the tired old Peter Coris Crime novel answer.
More and more we are seeing Government Law Enforcement Agencies unable to cope. We are seeing an acceleration in the work now being outsourced by Government to Investigation Companies in the Private Sector. We have in NSW a piece of legislation that allows Investigators and Licensed Security Professionals to apply to the court for an authority to place hidden cameras. All of these things point to a much broader base and potential for investigators and the industry into the future. It also signals a coming of age and acceptance that we can be trusted to do the work. I know where the future lies and its not with insurance companies although they will always be a part of the income of the investigation industry.
Warren Mallard
Managing Director
Certificate IV Investigative Practice & Procedure
Advanced Diploma Security Risk Management
Canberra Institute Of Technology
Master Security License No:408273284
Lyonswood Investigations&Forensic Group
204 Lyons Road, Drummoyne NSW 2047
http://www.investigators.net.au
+61 (0) 2 9819-6833 F +61 (0) 2 9819-6300
DX 21007 Drummoyne