The noise from claim staff is not joyous this year. Although a few people still tell us that they love their jobs, their voices are growing fainter. Dissatisfaction seems to be the overpowering sentiment in our 15th annual salary survey.

In the history of the survey, independent adjusting staff has made more money than their counterparts at insurance carriers, while enjoying fewer benefits and perks. In recent years, the gap between these figures had begun to narrow. This year's survey, however, indicates that all that is changing, and industry norms are reverting to type.

Although the dollar figures have fluctuated over the last couple of years, statistically claim compensation has risen approximately 25 percent since 1998, when we first started asking for exact salaries. The two exceptions are officers at independent firms, who have seen only a four percent gain in the last seven years, and carrier vice presidents, who have lost about 20 percent. (It must be noted, however, that fewer carrier CEOs and presidents are responding to our survey than did in the past. Their higher salaries may have skewed the figure upward in earlier surveys.)

During the same period, the Consumer Price Index rose from 163 to 188.9, a 24 percent increase. Although average salaries may be keeping pace with the cost of macaroni and cheese, houses have become more of a champagne-and-caviar ticket item. In 1998, the House Price Index, as determined by the U.S. Office of Federal Housing Enterprise Oversight, was 210.27. By the third quarter of this year, that figure had increased to 361.03, a 58 percent rise. In the last 12 months, alone, the index jumped 13.4 percent.

As companies trim costs, however, benefits are being reduced across the board. Traditionally, company claim staff enjoyed much better benefit packages than those working for independent firms. For the first time, however, fewer company employees are receiving insurance. In the case of life and medical, the percentages have dropped below 1998's numbers.

Independent adjusters, who had been making some headway in the first years of the decade, also are losing ground. In 2001's survey, 38.1 percent of employees at independent firms were offered life insurance by their employers, while 63.3 percent received medical. Those figures rose to 42 and 73 percent last year, respectively, and sank to 32 and 48 this year.

Technological tools that might help adjusters improve their efficiency — such as company cars, cell phones, and laptops — also are being furnished less often by companies. In 2001, nearly three-quarters of company claim staff drove company cars. Last year that figure dropped to 43 percent, and it went down another percentage point this year. Company cell phones and lap-tops are less common, with nine percent fewer claim staff being issued the former since last year, and two percent less the latter.

One area in which employers are footing the bill, however, is home phone and Internet lines. This year, 39 percent of claim staff received reimbursement for those costs, compared to 23 percent last year.

Among independents, seven percent fewer are driving company cars and talking on company cell phones than were in 2004. However, 9 percent more have been supplied with laptop computers and 12 percent more are able to work online courtesy of their companies.

Open Microphone

Both groups complain that salaries could be sweeter. Company claim adjusters cite heavy work loads, and independents feel that their years of experience are being undervalued. Carrier employees, in particular, seem to be feeling the strain. Of the comments we received, two-thirds criticized workloads, salaries, or both.

As one adjuster from North Carolina put it, “No problems with salary; I just wish I had enough free time to spend it. The work load is impossible, with far too many tasks not directly related to my job.”

An adjuster from Georgia agreed: “A lot of personal things have to be postponed or missed to be able to complete the job within the parameters established by my company.”

“I believe that compensation is low considering what responsibilities we have, along with the hours we work in order to provide good customer service,” said one adjuster from Kansas.

“Compensation is low for the expectations, responsibility, and workload,” agreed a supervisor from Michigan. “Benefits are decreasing at an increasing rate.”

“Employers are trying to keep salaries down with smaller raises, giving bonuses instead, because those may not be guaranteed from year to year,” commented an adjuster from New Jersey.

One supervisor from Massachusetts proposed that management should spend a few hours in claim adjusters' cubicles before setting assignments. “In general, I feel that the individual case load for adjusters country-wide is too high,” he said. “Management could not handle the same workload properly, yet they demand it from the adjusting staff.”

One adjuster had a suggestion on how workloads should be determined. “Carriers should stop counting files and, rather, weight the claims (i.e., collision loss is not as weighty as a commercial liability claim or workers' comp claim with disability),” he said. “They also need to look at pendings and not just receipts.”

One vice president sees technology as a way to ease adjusters' workloads. “The industry is slow to adopt technology,” he commented. “Telecommuting is a very viable way to do much of our work, yet it is not widely accepted by executive management. We should be using more technology, video conferencing, etc.”

A number of company staff members blamed increased workloads on the litigiousness endemic in the insurance industry. “Litigation has caused more work for claim files, yet our company keeps workloads at the same level and compensation at the same levels,” said an adjuster from North Carolina.

“Work requirements have been increasing due to increased bad-faith and customer demands,” added another.

Not only do claim staff adjusters feel underpaid for the number of hours that they put in, many suggested that knowledge and experience are not being valued as they should. “We're generally underpaid for the responsibility and knowledge required,” said a supervisor from Kansas.

“Considering what attorneys make and that I for the most part tell them what to do, the disparity is exponential,” commented a supervisor from New York.

“Seasoned liability adjusters generally know far more than the attorney handling the case. The art of investigating, evaluating, and negotiating is vastly unrecognized and severely under-compensated, mainly because financial management knows nothing about what we really do. The profession seems grossly under-rated. In my opinion, salaries in our profession have not kept pace with the rest of the business world.”

“Generally, we are the only company representative whom the insured meets and deals with,” added an adjuster from Maine. “Some companies do not seem to recognize the value of having an actual company employee working with the insured and, instead, rely solely on independents.”

An Independent Voice

The issue of experience is one that resonates with independent claim staff, as well. “Given the level of intelligence, expertise, and experience needed to do a good job for customers, we are way underpaid,” said an independent adjuster from Missouri. “The field is very competitive and insurance companies only want to save 'expense' dollars. They don't care as much about saving 'loss' dollars.”

“Carriers continually strive to cut independent adjuster fees,” agreed an adjuster employed at an independent firm in Wyoming. “I believe we should be compensated for the many years of professional experience that we bring to a claim. That does not always happen.”

Cost-cutting by carriers was a common theme. Many independents seem to feel that the costs of doing business are not sufficiently understood by large insurance companies. “The insurance industry has to learn that the cost of living is up and that independent adjusters have these costs also,” said the owner of an independent firm in Vermont. “They need to accept the raised cost of claim handling so we can stay in business. We need to make a profit to be here when they need us.”

A recurring theme in recent years has been the need for independents to become more technologically savvy in order to maintain relationships with carriers. “Clients require more technology advances and are passing this financial burden to the independent adjustment company,” commented the president of a Florida independent firm. “The fee schedules also are getting reduced and this creates a very difficult business relationship.”

“Some companies use 'bill adjustment services' to adjust independent adjuster bills,” noted a claim supervisor at an independent firm in Oregon. “As a commission-only adjuster, I feel an enormous impact when the bills are arbitrarily, and sometimes unfairly, reduced. I depend a great deal on core clients who know that they will receive an excellent work product, satisfied insureds and claimants, and professional service at a fair price.”

“I make less now than I did five years ago,” said the owner of an independent firm in Montana. “Our clients are demanding cost reductions, which have to stop or there will have to be substantial changes in staffing.”

Owners had plenty to say on the subject of staffing. “My salary is good because I am the owner, but adjusters and appraisers are not fairly compensated on the independent side,” said the president of an independent firm in Texas. “It is getting to be almost impossible to hire and retain good people.”

One problem, said the president of a firm in Nevada, is the poor workload-salary ratio. “Companies want more for less, and it is difficult to attract and retain quality adjusters,” he said. “Fewer are being trained and more are leaving the trade.”

Some blame carriers for not putting enough emphasis on adjuster education. “People in claims today are very poorly trained by the companies,” said the president of a firm in Tennessee. “It's as tough in the claim business as any with all the cost-cutting going on.”

“I am a small independent adjusting firm and the hardest thing is finding multiple-line adjusters,” said the president of a firm in Alabama. “This can be a burden when there are a lot of turnovers and you are the one who has to take up the slack. You can get buried under the slack.

“For that reason, I am thinking about getting out of the business,” he added.

In fact, the future seems bleak to many of our respondents from the independent side of the industry. “The work load is decreasing due to the number of one-man shops entering the industry,” said an owner from New Jersey.

“Last year, I paid no income tax,” said an owner from Texas. “It was my worst year as an independent in 26 years.”

“I believe that this is the final generation for the small independent adjustment auto firm as a viable business,” concluded an owner in New Jersey.

On the other hand, independent adjusters also had more positive comments to make about their jobs than those employed at insurance companies. “Good job, easy work, pay's OK,” commented an owner from South Carolina.

“Fairly well paying job if you can get into a management position and can make $$$,” said the vice president of a firm in Florida. “I still enjoy the job after 30 years.”

“I enjoy what I do tremendously and I am compensated at a rate that allows me to live the lifestyle I enjoy,” said an owner in Hawaii.

Not all company claim employees hate their jobs, either. One staff adjuster in Kentucky said, “I enjoy my work and the compensation is satisfactory to me.”

Again, however, salary seems to be the deciding factor. The other two people from the carrier side who said that they liked their jobs and felt that their compensation was more than adequate were vice presidents making more than $130,000 a year.

Having written this survey now for eight years, I cannot help but notice a change in the way that adjusters talk about their jobs. I used to hear a lot more about how much they enjoyed the varied duties demanded by the profession, including meeting and helping policyholders. This year, not one person made such a comment.

The respondents to our survey have raised some valid issues. Perhaps, by joining their voices together, adjusters can make their concerns heard. It would be exciting to open up next year's collection of comments and find that the industry is once again in harmony.

Salary Survey Methodology

A random sampling of 1,650 Claims subscribers was sent out on August 4, 2005. We received 759 useable responses, a response rate of 46 percent. Insurer claim staff are heavily represented with a 42 percent response ((319 respondents). Independent adjusters rank in with 36 percent (273 respondents). Thirteen percent were from risk managers (99 respondents), and two percent were appraisers (15 respondents). The remainder, seven percent (53 respondents) were from others in related fields, such as actuaries, underwriters, consultants, forensic accountants, and reinsurers.

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