This issue marks the 16th year Claims has been polling its readers in order to gain a better understanding of salaries and working conditions for the insurance claim industry. The survey also is meant to convey opinions of carrier adjusters, managers, and independents. Of course, salary history is important and there is no shortage of those ready to give their honest opinions on which direction they believed the profession is headed. A few respondents even questioned if adjusting was even a profession anymore. Given that this year's headline came directly from the comments we received, that should not come as a surprise to those in the know.

Demographics for this year's survey remained in line with previous years' surveys. A majority of respondents — almost 40 percent — listed themselves as claim managers or supervisors. Those who listed themselves as owners, presidents/CEOs, and vice presidents made up 30 percent of the responses. Twenty-two percent listed themselves as claim adjusters. In terms of division between independent and insurer claim staffs, 68 percent of respondents listed themselves as employed by insurers versus 32 percent for independent survey takers.

Tools of the Trade

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

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

Another perk given with reliable predictability over the past three years is cell phone service. Traditionally, cell phones were another item given to insurer staffs at a higher rate than independents. However, the gap closed to just two percentage points in this year's results. If asked the question, “Can you hear me now?” independent firms seem to be saying, “Loud and clear.”

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

Unsurprisingly, the one category independents still out number insurers in is home phone/internet service. Roughly one in three insurer claim staff is reimbursed for these expenses, a slight decline from last year. Independents, however, have a greater percentage of adjusters and managers located outside a central office. They continue to see increases, as exhibited by the 13 percent rise they reported in company-provided home phone/internet service since 2004.

The Independent Viewpoint

Most independent claim positions saw an increase in average salaries — except for independent adjusters, whose salaries fell this year to an average of $61,700.00. This figure is above 2004's average 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 many factors, one of which is the increased demand for independents after last year's inflated insured losses in the Gulf Coast and Florida. According to the Insurance Information Institute, catastrophe claims in 2005 alone totaled four million. That's an increase of 15 percent from 2004 and a whopping 35 percent from 2003.

Undoubtedly, this raised the demand for independent adjusters and resulted in more first-time adjusters working in the field. The net effect of so many inexperienced adjusters could have affected the average salary for the position because many third parties resorted to accelerated training methods to produce the immense number of adjusters needed to handle back-to-back Katrina and Rita catastrophe and auto claims. Inexperienced adjusters likely would handle fewer claims and thus have a lower income potential.

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

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

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

Other independent owners commented on their relationships with carriers and admitted that often their compensation levels were determined by others. This reality manifested itself in the form of frustration in many of their comments.

“My salary is dependent on claims given by the carriers,” said a 54-year-old female owner from New Jersey who reported a salary of $50,000. “There are many carriers who now require free mileage and gas and set prices no matter the circumstances or business climate.”

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

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

“The independent is being squeezed further and further on fee schedules and other billing/auditing requirements, which means that the profit margin is being reduced too much,” said a 50-year-old independent claim manager from Rhode Island who reported his annual salary to be $106,000. “I do not believe many of the insurance carriers consider or care about the large overhead expenses that an independent 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 far between,” said a 42-year-old male independent claim manager from North Carolina who makes $70,000. “Independent adjusters normally work well in excess of the 40-hour standard; however, the motivation of writing your own paycheck is incentive.”

In this year's survey, many respondents mentioned bonus plans at their companies. While many indicated that bonuses could significantly increase salaries, many independent adjusters in the field were vocal and disputed the effectiveness of them in providing motivation for them to work harder. Many complained about workloads and benefits, too.

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

A female independent auto claim adjuster from North Carolina also mentioned the effect slow business has had on her income. “Our assignments 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, an independent catastrophe adjuster in Florida noted simply, “My salary can range from $45,000 to $250,000 depending on the amount of work in any given year.”

Insurer Claim Staff Sound Off

Insurer claim staffs also saw higher salaries, in particular for adjusters and officers. Officers, which is a category comprised of presidents, CEOs, and vice presidents, saw their average salaries jump this year by 27 percent, a substantially high increase. It should be noted, however, that 2005's salary figures for the same positions were significantly lower than those reported in 2003 and 2004. But even when the previous three years of data for officers is averaged, the increase in salary still clocks in at more than 10 percent.

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

“I enjoy making a difference [by working] in claims, but when a company demands that I work 55-60 hours a week, they have essentially reduced my salary,” said a 44-year-old claim manager making less than $68,000, a salary that is below the average found in this year's survey. “I feel that companies err in failing to maintain workloads that can be completed within a normal work week. We are a profession and some overtime should be expected without compensation, but it should not be the norm just so [companies] can avoid hiring additional staff.”

“I think the importance of the claim profession as viewed by salaries paid has been falling for years,” said another claim supervisor making $81,000. “The use of outsourcing has had a negative impact upon salary growth. Also, the expertise in adjusting is vanishing as baby boomers retire and companies are reluctant to invest in the training needed to develop expertise. The value of the properly adjusted claim does not seem to be appropriately accounted for by most companies.”

Training also was an issue oft-mentioned by managers. Some lamented the fact that there simply was not enough time in the day to prioritize continuing education for their adjusters due to heavy workloads and contemplated the effects this had on the adjusters they supervised.

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

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

“We have seen a sizable increase in the number of people each supervisor is responsible for, which has resulted in less supervision 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 the expense ratio,” said another manager making $75,000.

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

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

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

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

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

It is a somewhat gloomy picture painted so far, but it was not all bad news. Many in the industry reported that they receive great satisfaction from their jobs and consider their salaries to be appropriate. Many survey responders freely admitted to high workloads, 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 you work for, other things become less important.

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

“Work environment is great. Salary is adequate. Workload continues to increase,” said an insurer claim manager from Idaho whose salary is $60,000.

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

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

Special Reports /

Overworked, Underpaid, and Underappreciated?

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