Salary Survey 2009

Salary Stagnation

One recurring theme that emerged this year is that of assuming a quantifiably heavier workload, sans additional compensation. Many of the insurer claim staff in particular reported that claims were increasingly complex and/or large in severity, yet there was no noticeable leap in pay.

"As an experienced adjuster, I feel the increased responsibilities due to the economical downfall means that professionals are grossly underpaid," said a staff adjuster who has logged more than 10 years in industry and earns about $68,000 annually. "Compensation is losing ground, and the salary is just not commensurate with the requested workload."

Judging from our survey's numbers alone, it is evident that average salaries have remained stunted, as increases in most title categories — including owners, officers, and managers/supervisors — for independent claim staff barely hovered above one percent. Some insurer claim staff fared slightly better, however. For instance, the compensation for staff officers climbed from $156,735 in the 2008 survey to $161,442.50 in 2009.

Many respondents were also disheartened and justifiably indignant about staffing levels, which they deemed inadequate. Some charged that managers bombard already-inundated "skeleton crews" with an unrealistically high volume of work. The losses sustained by insurers because of the stock market decline has precluded pay increases or the replacement of employees who have left.

Even so, a 51-year-old president of an independent adjusting firm in the Midwest said that companies could develop more effective strategies to deal with this dilemma.

"Due to the economy, business has slowed down a lot, so most companies are keeping claims in-house," he said. "I have noticed that major insurers are laying off employees but not replacing them. This is baffling. These companies are essentially channeling more claims to already overworked adjusters. It would be more cost-effective to assign claims out because that would represent a tax break for the company."

Aside from upsetting companies' most valuable assets — namely, their employees — such workloads could ultimately translate to major customer service issues. Reallocating or outsourcing work could ostensibly mean that insureds' claims would be handled in a more timely manner.

Malcontent's Thorny Clutches

As in all past iterations of the survey, this time feedback arrived in a mixed bag of distressed souls stretched beyond capacity and the passably content who view it all sunny side up. A fair number of respondents, however, found it a Herculean task to mask peals of doom and outrage over a perceived lack of respect and paltry wages.

An independent adjusting firm CEO in the Northeast charged that too many companies are using the economy as the proverbial scapegoat to strip away benefits, while an independent adjuster in the Southwest with 14 years of experience mirthfully retorted that the profession was great if one is "extremely knowledgeable, competent, and willing to work 65+ hours a week to service their insureds, live away from home for weeks on end, and do whatever it takes to get the job done."

Sure, neither the respondents' average salaries nor the hours worked fluctuated drastically compared to our results from just one year ago. To borrow from survey language, both "stayed about the same." Perhaps it does bear mention, however, that the typical work week for claim professionals is rather long. Most in the industry log an average of 48 hours each week. Also, it could be argued that much of this disdain is understandable. The real kicker in this year's statistics lay in the diminished benefits. The waning benefits could be largely indicative of a nation on wobbly financial footing but were no less vexing to claim professionals supporting families or just trying to keep themselves afloat.

Erosion of Benefits

Our 2007 survey results indicated that 99 percent of insurer staff and 54 percent of independent staff could avail themselves of medical benefits. Those figures changed marginally in 2008, with 98 percent of insurer staff and 59 percent of independent staff being offered the same coverage. This year, however, we calculated and re-calculated, not wanting to believe that merely 88 percent of insurer and 32 percent of independent staff are now extended the same benefits.

It soon became apparent in tabulating the figures that medical coverage was just the tip of the iceberg. There were noticeable declines in all benefits (see sidebar, "Benefits Offered"). Dental insurance, which was formerly available to 93 percent of the insurer staff and 49 percent of independent staff surveyed in 2008, is now obtained by 84 percent of insurer staff and 32 percent of independents. Profit sharing and 401K match options appear to have fallen by the wayside, as well.

"The future looks bleak," said a company claim manager in the Midwest making $86,000 annually. "My company discontinued its 401k match and continually asks us to accomplish more work. In all aspects, we are asked to make do with less."

There was a corresponding decline in the work tools available to claim professionals (see sidebar, "Perks and Work Tools Offered"). An insurer claim staff manager with 19 years of experience in the Southeast relayed an extreme example of this, and what he viewed as a take-it-or-leave-it proposition by employers.

"Expenses are very much an issue, and I'm not just talking about salaries," he said. "My company car was just taken away. That equates to a compensation decrease of about $6,000 per year. I think that employers are using the economy as an excuse to cut expenses that they would not have otherwise been willing to do, knowing full well that many of us would be hard pressed to find comparable positions."

Are We Dinosaurs?

Others shifted their focus to the aging workforce, voicing concerns about the very real, imminent threat of a shortage of fresh talent in the profession. The seeds of this dilemma are reflected in the age statistics gathered (see sidebar, "Who We Are"). Data shows that very few people under the age of 35 are entering the industry. This problem is compounded by commentary from some respondents that youngsters who do enter the industry are finding little reason to stay. The lack of allure can be traced to a profession virtually devoid of training opportunities, some say. Chronic stress and feelings of being undervalued could also deter rookies from making a substantial investment in the profession.

"All of the young people I talk to regret getting into the business because of the hefty workload and stressful conditions," remarked an insurance company supervisor residing in the Midwest.

"In-depth training is almost non-existent these days, and young adjusters more often than not must learn through trial by fire," added a claim staff adjuster with 38 years of experience who now works exclusively from home.

Additional survey feedback seemed to corroborate these points, as burnout was reported even in those with less than five years in the field. Instant loyalty would be unrealistic in any profession. However, insurers will need to find creative ways to enhance the well-being of their staffs and encourage inexperienced adjusters.

Much will also need to be done to repair the disconnect between managers and direct reports, as many in the trenches accuse management of being too far removed from the nuts and bolts of the actual job to grasp complications. A seasoned staff adjuster bemoaned the lack of understanding of how automation impacts workload.

"My workload is still heavy," he lamented. "Upper management thinks automation saves more time and allows a greater volume of claims to be handled. In actuality, automation contributes to unrealistic expectations."

"Even with the advent of technology, nothing slows down driving time and time spent with the customer at the loss site," added an independent adjuster in Virginia. "Just because they provide technology and tools doesn't mean that translates into faster claim resolution, even on the smallest of jobs."

Some independents contend that companies try to dictate what they can charge and yet fail to understand the true costs of running a small business and providing the requisite level of service.

"[Insurers] dictate mileage charges and hourly rates, but then say we cannot charge for phone calls, photos, and office charges," said a president/CEO of an independent adjusting firm in the Southeast. "They want paperless and we have to supply the equipment to make that happen."

Though independents and insurer staff have somewhat different viewpoints in terms of expectations, both share commonality in wearing too many hats for too little reward. Those in management expressed similar frustrations.

"Eight adjusters report to me, and I think generally supervisors and middle management are underpaid and overworked," said one insured staff manager on the East Coast. "Many of my friends in the business feel the same way."

"We constantly deal with negative scenarios," added another company staff manager with 10 years of experience. "Even though we are overloaded, there is no paid overtime permitted."

The Upside in Downturn

Regardless of the challenges, which at times could seem insurmountable, the collective commitment to the industry is strong. One need only look to the average tenure of respondents — 24 years for independents and 22 years for company claim staff — to gather that our diligent professionals have a serious stake in the business.

Sixty-nine percent of insurer staff and 64 percent of independents would unequivocally recommend the stable line of work to others.

"In my 32 years of service, I've never had a bad day," gushed a claim staff vice president based in the Southwest. "The industry has been good to me."

"I think we will always be needed," said the president of an independent firm who makes a six-figure salary. "The current 'slump' will eventually be seen for what it is."

At its core, the adjusting process is one of damage assessment and conflict resolution and will thus always be necessary. Until the recent economic turmoil, many Americans might have fixated on an illusory permanence while the world around them changed minute by minute. Our claim professionals know better. They realize that pain and promise will always be intertwined. Yet they also realize that the industry holds a most inspiring promise.

Perhaps one appraiser, who has served in various capacities throughout his 39-year industry tenure, best captured the essence of the claims:

"One can derive a lot of self-satisfaction from a job well done, and success in this field is limited only by the desire to work hard and to better yourself."

A Southwest independent claim manager with 30 years of experience echoed this positive sentiment. "I love this job. Although [the profession] is not as well paying right now, it is a good time to add to existing knowledge and proficiencies. So increase your education. It will be advantageous when business perks up."