With the unprecedented spring tornadic activity and the recentcommencement of the 2011 tropical storm season, independent andstaff catastrophe claims professionals are ramping up for a busyyear after an extended period of sporadic disasters and fewland-falling hurricanes.

What are some of the top concerns facing this unique segment ofthe P&C insurance community? What do these professionalsstruggle with day in and day out, year after year in their jobs,which are unlike anything else in the industry?

Here are the top seven concerns as voiced by the professionalsthemselves, in no particular order.

1. Managing Personal Life

Even catastrophe adjusters with the sunniest of dispositionswill admit that a major challenge of the job is the toll it takeson their personal lives. Independents especially struggle with alife and paycheck that is literally driven by the direction of thewind. Not many families are made to handle the kind of stressinvolved in a deployment that can often last for weeks or months ata time.

“You work seven days a week,” says Mary Anne Medina, who has 20years of experience in handling catastrophes and now managescatastrophe adjusters in the field. “You are away from your familya lot. There are a lot of catastrophe adjusters who miss their kidsgrowing up, who miss birthdays and ball games. You have to have asignificant other who understands that kind of commitment.”

Roberto Reyes has worked as an independent catastrophe adjusterfor seven years, having previously worked for Allstate and Farmersas a staff adjuster. He uses technology to help stay in touch.

“I’m married with three kids, so I’ve missed birthdays andanniversaries,” he says. “There is a lot of personal stress inbeing away from home. I use Skype to keep in contact with my kids,but that does not make up for the fact that I’m not going to behome for a month at a time. Facebook has been a blessing thoughbecause now I can keep in contact and in touch with more friendsand family much more quickly than I was before.”

2. Emotional Stress and Volatility

While the term “catastrophe” is often used to describe eventslike hail storms and heavy rains, mega disasters like the ones seenrecently in Joplin and Tuscaloosa test a catastrophe adjuster’sability to witness grief and misery.

“When every claim you go to is somebody’s life being turnedupside down, when every claim in your bag is a total loss, it’sextremely difficult on you physically, mentally, and emotionally,”says Kevin Hromas, a consultant and independent adjuster who hasworked catastrophe claims for seven years. “Someone’s house couldbe completely destroyed and scattered over six counties. That’s notsomething you handle in an hour and then walk away from.”

The Katrina aftermath brought emotional stress concerns to theforefront, when many adjusters had to deny homeowners’ claims thatwere caused by flooding.

“One of our adjusters was working in the center of New Orleanswhere there was heavy flooding,” says Bud Trice, vice president ofcatastrophe services for Crawford & Company. “She had to tellpeople who had six feet of water in their homes that she could onlypay them for a gutter that had blown off. She called in one day andsaid, ‘I can’t take it anymore, it’s too emotionallydraining.’”

3. Emerging Legal Exposures

Pressure from state departments of insurance takes on avice-like grip post catastrophe, with expectations varying from theunrealistic to the absurd. Many independents in particular worrythat these regulations, combined with a high workload andlitigious-happy society, will lead to increased legalexposures.

While many independents are protected from errors and omissionsby their employers—sometimes referred to as a “courtesy”defense—Hromas fears that safety net could have holes init.

“Recent court cases in Texas have held adjusters liable fordamages not as an agent of a carrier, but rather as personalliability,” he says. “It’s the first time I’ve seen that directassertion. A courtesy defense can be rescinded by a carrier orthird party administrator if it’s found the adjuster did somethingwrong, which leaves the adjuster exposed to liability.”

4. Time Management

No independent wants to turn down files—especially not whentheir future workload is always an uncertainty. Balancing a heavyworkload is a challenge for catastrophe adjusters, but it’s notalways due to a surge of activity.

“The biggest challenge I see is that we have a shortage ofexperienced catastrophe adjusters,” says Reyes. “I don’t mindgetting 100 claims, because the more I work the more I get paid.But on a personal level, it’s quite taxing since I can only handlefour or five files a day. There are so many new people without anyexperience that they need people like me to take the brunt of theclaim load.”

That kind of load expectation is complicated by the sense ofurgency and long hours demanded of the job.

“As an adjuster, you do estimates during the day and do yourpaperwork at night,” says Medina. “You don’t take off Saturday andSunday when dealing with disaster scenarios. Policyholders need tobe taken care of and issues handled promptly. You don’t tell apolicyholder who lost his house that you’ll get to him after theweekend is over.”

5. Feast and Famine

Catastrophe adjusters are built to be productive, workingquickly and diligently to get policyholders back on their feetwhile getting their claims files closed. But some are unpreparedfor a different type of disaster: a drought of claims-generatingactivity.

The willingness to put up with that kind of uncertainty is allpart of the catastrophe adjuster personality, according toTrice.

“One thing that is very common amongst catastrophe adjusters—thepeople who truly do this for a living—is their willingness to riskfamine for the prospect of reward,” he says. “They are notguaranteed a steady diet of work, and they’re willing to risk thatfor those ‘fat’ years. That’s what separates them from the typicalin-house staff adjuster that gets a steady paycheck.”

“You could have a great year and make six figures, but then havea terrible year the next,” said Reyes. “If you don’t have properfiscal discipline, you can get into trouble. I work casualty claimsduring slow times, but it’s nowhere near the type of money you canmake working catastrophes.”

When one bad year becomes two or three strung together, therisk/reward factor gets tested.

“Despite recent activity, the last three or four years have beenextremely slow,” says Medina. “There are always catastrophes thatpeople don’t hear about, things like hail storms and frozen pipes,but a lot of adjusters have really struggled the last couple ofyears.”

6. Cost of Doing Business

Staying current with equipment and purchasing things likelaptops, estimating systems, and cameras, not to mention internetaccess, is also a big concern. Because independents are paid on anegotiated fee schedule, variable costs can have a big impact ontheir bottom lines.

“High gas prices have been a tremendous problem to theindependent catastrophe adjuster,” says Medina. “Most drive largervehicles so they can carry the equipment they need like ladders andthings, so higher gas prices cut into their profits. It affects theinsurers, too, since staff adjusters will have those costsreimbursed by their companies.”

Adjusters not only face costs not only in terms of gettinglicensed, but also staying that way.

“You have to be licensed in the state you’re working,” saysMedina. “Sometimes it’s difficult for independent adjusters to keepa license in every state, not knowing if they are going to becalled to work in that state. If you do get a license, you alsohave to do the CE requirements to maintain it.”

“More and more insurance companies want you to be pre-licensedbefore they will call you up,” says Reyes. “So the more states youare licensed in, the more opportunity there is for work. But thatcosts money.”

7. Physical Safety

It goes without saying that heading directly into a disasterscene has its share of safety issues, too.

“You are out there in the elements,” says Reyes. “When you workhurricanes and other disasters, you’re going into places with noelectricity. In some situations, there are threats like beingassaulted, bitten by snakes, falling off a roof, or hitting anexposed power line.”

Sticking to protocol and adhering to established safety measuresis critical for catastrophe adjusters, whether that means gettingvaccinations or wearing appropriate safety gear.

“We had one adjuster who broke the rules and stayed too longinside an area with an ammonia leak, and it affected her breathingfor the rest of her life,” says Trice. “That is one example of thekind of thing that both the adjuster and management have to worryabout in disaster situations.”

What about overly aggressive policyholders? It’s not a commonproblem, but situations can get tense, says Trice.

“You have what I call your Type Double-A personalities outthere, but we haven’t seen truly aggressive behavior frompolicyholders on any significant levels,” he says. “We tell ouradjusters that if they run into that kind of thing, back offimmediately. It is not their job to outdo somebody.”

The challenge of doing a good job and performing under immensepressure amidst extraordinary situations separates the professionalcatastrophe adjuster from most other insurance professions.

While these seven challenges are a good start, there are nodoubt many more. Tell us what you think they are by commentingbelow.

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