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Sizing-up the National vs. Regional Investigation Service Options

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From 30,000 feet it is hard to draw distinctions between the insurance investigation services of one well-known provider and the next. For the most part, we all do pretty much the same thing, fraud investigations and surveillance. In addition, some may have a digital investigation platform of varying value, and others may have a unique additional specialty for which they are best known.

For years, however, we have seen that optimization has spoiled some of the biggest names. After years of consolidation, many of the small and mid-size players that were acquired along the way now have to deal with a national structure and rigid corporate guidelines. These operating requirements demand certain profit and streamlining efforts. There is no doubt a strict corporate atmosphere smothers investigator intuition, when, in fact, it is a key ingredient to the recipe for building a long-lasting and respected reputation as an effective vendor.

Investigating the Investigators

While all industries must evolve, they cannot indefinitely absorb predatory cost cutting practices without further eroding confidence in the product. An informal review of operating profiles comparing the ”paper nationwide” companies with the regional providers evidences a number of distinctions that truly favors the regionals.

Our industry’s experience with consolidation is a classic one, in that those that sell out get out. While the professionals who respect the efficiencies of scale either joined forces or built a bigger footprint, but in most instances stayed in the game and continue to contribute to the higher standards imperative in our industry. Like smaller Ritz Crackers and Tuna cans, the post-acquisition big players burdened with debt service seemed to have lowered their bar by offering provocative pricing at the cost of investigative reliability.

The very nature of optimization suggests that buyers accept some of the responsibility for the current challenges. Cost cutting means using workers that are willing to accept lesser compensation or that may not be full-time or properly trained or certified. The guidelines applied to reporting, security and safety get compromised and the actual reports exhibit real and extraneous errors.

The client industries we serve have seen the bottom line and understand the tradeoffs. The products offered from all levels of the industry truly speak for themselves. Small players may be the least worthy of consideration in insurance investigations. Big players fill a need where almost any quality of investigation will do. The more professionally-driven regional investigators seem to be the best resource when investigative integrity is most important. The regional outfits combine the nimble, investigator-emphasized, client-focused structure of the small shops with the expanded resources and streamlined organization of the largest corporations, without losing the quality and results the client requires.