This issue marks the 16th year Claims has been polling itsreaders in order to gain a better understanding of salaries andworking conditions for the insurance claim industry. The surveyalso is meant to convey opinions of carrier adjusters, managers,and independents. Of course, salary history is important and thereis no shortage of those ready to give their honest opinions onwhich direction they believed the profession is headed. A fewrespondents even questioned if adjusting was even a professionanymore. Given that this year's headline came directly from thecomments we received, that should not come as a surprise to thosein the know.

Demographics for this year's survey remained in line withprevious years' surveys. A majority of respondents — almost 40percent — listed themselves as claim managers or supervisors. Thosewho listed themselves as owners, presidents/CEOs, and vicepresidents made up 30 percent of the responses. Twenty-two percentlisted themselves as claim adjusters. In terms of division betweenindependent and insurer claim staffs, 68 percent of respondentslisted themselves as employed by insurers versus 32 percent forindependent survey takers.

Tools of the Trade

Once again, insurer claim staffs received more benefits thantheir independent counterparts this year (see graph, “Perks andWork Tools Offered”). Electronic tools and automobiles are a partof the adjuster's life and, as in the past, insurer claim staffscontinue to garner more of these necessities directly from theircompanies based on this year's results.

For instance, while insurer staff members continue to receivecompany cars at the same rate as in the past three years (43percent), independents have seen a steady decline in this type ofperk being offered. In 2004, independents reported receivingcompany cars 41 percent of the time. Last year, that number droppedseven percentage points and this year saw yet another decline, withless than one in three driving a car on the company's dime.

Another perk given with reliable predictability over the pastthree years is cell phone service. Traditionally, cell phones wereanother item given to insurer staffs at a higher rate thanindependents. However, the gap closed to just two percentage pointsin this year's results. If asked the question, “Can you hear menow?” independent firms seem to be saying, “Loud and clear.”

But what about laptop computers? More and more adjusters andmanagers not only rely on the ubiquitous tools to complete theirdaily tasks, but consider them essential. Again, this year's surveyindicates that insurer staff members are routinely supplied withthem at a much higher percentage than independents. Whileindependents report increases in this category — up 15 percentsince 2004 — insurer claim staff members indicate that nearly threein five can be mobile with their workload.

Unsurprisingly, the one category independents still out numberinsurers in is home phone/internet service. Roughly one in threeinsurer claim staff is reimbursed for these expenses, a slightdecline from last year. Independents, however, have a greaterpercentage of adjusters and managers located outside a centraloffice. They continue to see increases, as exhibited by the 13percent rise they reported in company-provided home phone/internetservice since 2004.

The Independent Viewpoint

Most independent claim positions saw an increase in averagesalaries — except for independent adjusters, whose salaries fellthis year to an average of $61,700.00. This figure is above 2004'saverage salary of $55,227.27 but well below last year's average of$71,420.00.

This sizeable fluctuation could be seen as a result of manyfactors, one of which is the increased demand for independentsafter last year's inflated insured losses in the Gulf Coast andFlorida. According to the Insurance Information Institute,catastrophe claims in 2005 alone totaled four million. That's anincrease of 15 percent from 2004 and a whopping 35 percent from2003.

Undoubtedly, this raised the demand for independent adjustersand resulted in more first-time adjusters working in the field. Thenet effect of so many inexperienced adjusters could have affectedthe average salary for the position because many third partiesresorted to accelerated training methods to produce the immensenumber of adjusters needed to handle back-to-back Katrina and Ritacatastrophe and auto claims. Inexperienced adjusters likely wouldhandle fewer claims and thus have a lower income potential.

Independent owners, who made up 36 percent of the independentresponse, earned average salary increases from last year, gettingbumped up nearly four percent from 2005's figures. According to theBureau of Labor Statistics, this increase is keeping pace with theConsumer Price Index increase of 4.1 percent. However, independentowner salaries did not top the $100,000 levels that were reportedin 2004. Several independent owners offered their opinions on theirsalaries and the working conditions they experienced.

“As an independent, I am satisfied with the money I make,” saida 56-year-old male owner from Michigan. “I understand I have littlecontrol over the amount of time I work. However, I like theflexibility and the independence I have.” He reported his 2005salary as being between $50,000 and $75,000.

Another independent owner from Florida, who indicated that hisannual topped $250,000, echoed similar sentiments. “I left thecompany marketplace to make substantially more money,” he said. “Ienjoy the time scheduling and [more time with] my family.”

Other independent owners commented on their relationships withcarriers and admitted that often their compensation levels weredetermined by others. This reality manifested itself in the form offrustration in many of their comments.

“My salary is dependent on claims given by the carriers,” said a54-year-old female owner from New Jersey who reported a salary of$50,000. “There are many carriers who now require free mileage andgas and set prices no matter the circumstances or businessclimate.”

“Insurance companies don't want to provide a service for theirpolicyholders as they once did,” said a 62-year-old male owner fromTennessee who makes $89,000 annually. “They want to cut theestimates to the point where policyholders have a hard time gettingthe work done. It looks like they just want to pay the claim andclose the file.”

Independent claim managers also chimed in and echoed similarfeelings to their owner counterparts. This despite the fact thatreported salaries for claim managers were averaging almost $10,000more than last year's reported salary figure of $86,000.

“The independent is being squeezed further and further on feeschedules and other billing/auditing requirements, which means thatthe profit margin is being reduced too much,” said a 50-year-oldindependent claim manager from Rhode Island who reported his annualsalary to be $106,000. “I do not believe many of the insurancecarriers consider or care about the large overhead expenses that anindependent has when operating the business.”

“Independent adjuster's workload is normally feast or famine.Fortunately, if you have a good reputation, famines are few and farbetween,” said a 42-year-old male independent claim manager fromNorth Carolina who makes $70,000. “Independent adjusters normallywork well in excess of the 40-hour standard; however, themotivation of writing your own paycheck is incentive.”

In this year's survey, many respondents mentioned bonus plans attheir companies. While many indicated that bonuses couldsignificantly increase salaries, many independent adjusters in thefield were vocal and disputed the effectiveness of them inproviding motivation for them to work harder. Many complained aboutworkloads and benefits, too.

“Bonuses are a substantial part of the compensation package, butworkload [availability] determines to a large degree whether or nota bonus can be earned,” said a 44-year-old male independentadjuster from New York making $55,000. “I would rather see salariesbased on experience and do without these false compensationpackages. A bonus should be just that — a bonus for a job welldone. It should not be a way to keep salaries artificially lowuntil high workload periods.”

A female independent auto claim adjuster from North Carolinaalso mentioned the effect slow business has had on her income. “Ourassignments are down and so is our salary. Bonuses were cut,however, not regular pay.” She reported a salary of $43,000.

Perhaps also indicating the effects of a slow year, anindependent catastrophe adjuster in Florida noted simply, “Mysalary can range from $45,000 to $250,000 depending on the amountof work in any given year.”

Insurer Claim Staff Sound Off

Insurer claim staffs also saw higher salaries, in particular foradjusters and officers. Officers, which is a category comprised ofpresidents, CEOs, and vice presidents, saw their average salariesjump this year by 27 percent, a substantially high increase. Itshould be noted, however, that 2005's salary figures for the samepositions were significantly lower than those reported in 2003 and2004. But even when the previous three years of data for officersis averaged, the increase in salary still clocks in at more than 10percent.

Interestingly, insurer claim managers and supervisors — thehighest-responding survey segment this year — saw their firstsalary decline in two years. Salaries for the position fell to$79,213, which leaves them trailing their independent counterpartsby a wide margin this year. Unsurprisingly, dissatisfaction withthis finding is reflected in many of the comments we received fromthis group.

“I enjoy making a difference [by working] in claims, but when acompany demands that I work 55-60 hours a week, they haveessentially reduced my salary,” said a 44-year-old claim managermaking less than $68,000, a salary that is below the average foundin this year's survey. “I feel that companies err in failing tomaintain workloads that can be completed within a normal work week.We are a profession and some overtime should be expected withoutcompensation, but it should not be the norm just so [companies] canavoid hiring additional staff.”

“I think the importance of the claim profession as viewed bysalaries paid has been falling for years,” said another claimsupervisor making $81,000. “The use of outsourcing has had anegative impact upon salary growth. Also, the expertise inadjusting is vanishing as baby boomers retire and companies arereluctant to invest in the training needed to develop expertise.The value of the properly adjusted claim does not seem to beappropriately accounted for by most companies.”

Training also was an issue oft-mentioned by managers. Somelamented the fact that there simply was not enough time in the dayto prioritize continuing education for their adjusters due to heavyworkloads and contemplated the effects this had on the adjustersthey supervised.

“My salary is adequate for the area and cost of living, but lowcompared to metro areas,” said a 46-year-old company manager inIowa. “Work load is steady and getting heavier. There is a lot ofturnover lately and could be either compensation issues or lack oftraining.”

“We are no longer adjusters who make decisions, but ratherappraisers who look at information provided by an outside sourceand make a payment,” said a 36-year-old female claim manager making$58,000. “Supervisors now just push paper. This does not allowadjusters to learn how to become better adjusters, just betterpaper-pushers.”

“We have seen a sizable increase in the number of people eachsupervisor is responsible for, which has resulted in lesssupervision and less time to review files and provide training,”said a 49-year-old male manager making $79,000.

“Turnover is tremendous, as workloads increase to reduce theexpense ratio,” said another manager making $75,000.

Another manager who reported an annual salary of $90,000 summedit up nicely by saying, “[You] never get enough compensation forthe decisions you must make and the abuse you must take from thecustomers.”

Finally, many carrier adjusters voiced their opinions on thestate of the industry and how they viewed the status of theirposition.

“Profession? Huh?? Technology has turned this into a part-timeclerical position,” said a casualty adjuster making $61,000.

“Salaries do not seem to match the work demands; as a result, alot of good adjusters leave the occupation,” said a carrierproperty adjuster in Iowa who makes $59,000. “The net effect isthat there are adjusters handling claims that they shouldn't behandling, which is a disservice to everyone involved in the claimprocess.”

“Workload has increased substantially,” reported a 58-year-oldfemale carrier adjuster making almost $64,000. “Those adjusters whohave left have not been replaced, which reflects in increasedworkload for adjusting staff. Various types of reporting and dataentry requirements continue to increase. This now amounts to [morethan half] of my workload.”

It is a somewhat gloomy picture painted so far, but it was notall bad news. Many in the industry reported that they receive greatsatisfaction from their jobs and consider their salaries to beappropriate. Many survey responders freely admitted to highworkloads, but they also expressed happiness in their positions.Often, their salaries had nothing to do with this satisfaction,proving once in for all that if you love what you do and who youwork for, other things become less important.

“This job has been truly rewarding for me,” said a 49-year-oldfemale adjuster from Oklahoma who makes $32,000. “I love doing whatI'm doing; however, there is just not enough time to complete allof my tasks. But, I would like to reiterate, this job has been oneof the most challenging, self-motivating, stressful (I could go onand on) jobs that I have ever had. And, I totally love it!”

“Work environment is great. Salary is adequate. Workloadcontinues to increase,” said an insurer claim manager from Idahowhose salary is $60,000.

“I took a position at a smaller staff company more than fiveyears ago for less annual salary in exchange for great benefits,less workload, less hours, more quality time with my family, andtotal autonomy,” said an insurer claim manager from Washington whois making $90,000. “It's the best thing I ever did!”

“I think that my job is perfect,” said another claim managerfrom Puerto Rico. “I love what I do and the pay is correct.”