The insurance industry is positioned to undergo a significant transformation as nearly a quarter of professionals including claims adjusters, are expected to retire in the next 12 to 18 months.
The effect on the industry is already being felt as insurers are actively recruiting the next generation of adjusters, claims managers, technology experts and data scientists.
Technology will help mitigate some of the loss as new apps, programs and equipment allow adjusters to better manage their time and resources, but there will be some changes in how jobs are assigned, who handles them and even who reports claims in the future.
Adjusters are already feeling the impact of these challenges. Some are seeing the staffing issues as other adjusters leave the industry. Some have not had raises in several years. Many of the respondents feel that their salaries are not keeping up with the growing workloads, and yet 64 percent said they would still recommend this profession to other people.
A wide variety of professionals responded to this year's survey: 40 percent were company claims staff, 22 percent were independent adjusters, 3 percent were appraisers, 2 percent were members of special investigative units, and 33 percent comprised risk managers, third-party administrators, claims executives, claims managers and consultants.
This year, almost half of the respondents were field adjusters, while the balance were owners or senior management. Seventy percent were male and 30 percent were female.
Time is money
Interestingly, 85 percent of the company adjusters said that their companies do not pay overtime and yet 64 percent of the respondents indicated that they work more than 40 hours a week. All of them work full-time for their firms. Of those who do work overtime, 7 percent work less than five hours more per week; 5 percent work 6-10 hours and 3 percent work an additional 11-20 hours a week.
Independent adjusters were more likely to work part-time as indicated by 20 percent of the respondents, but the other 80 percent work anywhere from 50 to 80 hours a week.
The number of hours company adjusters are working seems to be keeping steady, with the majority (69 percent), saying their hours haven't changed significantly over the past year. That's just a slight drop of 2 percent from last year's survey.
Here's how the numbers fall:
The feedback from independent adjusters was mixed. While the majority (44 percent) said that their hours had stayed the same, there was a marked increase in the number of those who had seen an increase in their hours. In 2015, only 3 percent of respondents said they had seen an increase in their hours, but that number jumped to just over 11 percent in 2016, which matches the trend a number of experts are seeing as more insurers outsource their adjusting responsibilities to independent adjusters.
The number of adjusters who said there had been a drop in the number of hours they worked also fell from 18 percent in 2015 to 15 percent in 2016.
(Photo: Shutterstock)
Benefits still matter
When it comes to benefits and other perks, the list of what is offered remains basically the same year over year, but the number of individuals who receive those benefits showed a slight increase. Pension plans have become the number one benefit offered by insurers to their staff adjusters and 97 percent of the respondents are taking advantage of that option, an increase of 8 percent over last year. Life insurance dropped to second place, but this also showed a 7 percent increase over 2015, with almost 96 percent of respondents saying they had this benefit. Health insurance also showed a slight increase in the number of respondents whose companies offered it, jumping from 93 percent in 2015 to almost 96 percent in 2016.
The numbers are significantly lower for independent adjusters compared to their staff counterparts, this year's survey saw a drop in the number of adjusters receiving benefits in every category listed except laptop computers and internet service when compared to 2015.
By the numbers
By the numbers
Salaries for adjusters and other professionals ranged from $29,000 to $600,000, but respondents held a wide variety of positions. The median salary for this survey was $80,000.
Some respondents felt their salaries were fair given the workload and hours. A majority believed that adjusters should be paid more given the long hours worked and the fact that they handled well over 150 claims per adjuster.
One respondent had been with a company for almost 30 years and said the amount of expertise required for the job, the number of hours worked and caseloads translated to adjusters not being fairly compensated for their work. Let's take a look at the company adjuster salaries.
While staff adjusters for insurers are paid on a salary, independent adjusters are paid in several ways: based on time and expenses, a gross fee schedule, a flat daily rate, a salary or per claim.
The majority of independent adjusters who responded (33 percent) indicated that they were self-employed and made under $100,000 per year. The other respondents had either under 10 employees (26 percent), 25-29 employees (7 percent) or 100 or more employees (33 percent). Annual sales for the firms ranged from under $100,000 to more than $50 million.
Seeing into the future
The number of respondents who said they would recommend this profession to other people dropped from 68 percent in 2015 to 64 percent in 2016. Adjusters also aren't as positive about the future of the industry as they were previously. In 2015, 57 percent rated the industry outlook as positive compared to only 38 percent a year later. Those with a negative outlook on the industry increased by 44 percent over 2015 and the number who thought the outlook was neither positive or negative increased by 13 percent.
Retirement is still a few years off for most of the study respondents, although more than one-third will be retiring in the next 10 years. A number of the independent adjusters said they could retire, but chose to keep working at least part-time.
The general sentiment is that adjusters are being asked to do more with less — less training, less time, more hours. Fee schedules are decreasing as insurers are asking and expecting more from their adjusters. Those who thought their salaries and options were fair were a definite minority compared to the general consensus who thought they were underpaid given the demands of the job. The long hours, combined with the complexity of issues and extreme volume were major contributing factors to job dissatisfaction.
There are no easy answers and the challenges the industry faces are significant. From finding and training a new generation of workers who may not have a lot of practical hands-on experience, who demand a work-life balance in an industry that has traditionally expected professionals to work long hours including holidays and weekends, to a significant talent gap that is looming on the horizon, the work model may need to change.
More companies are using independent adjusters to complement their existing workforce. Some insurers are using fewer staff adjusters and outsourcing more claims to independent adjusters. And, technology is giving insurers and policyholders new options for reporting losses on both the auto and property damage sides, which may help alleviate some of the growing pains. For an industry that has not previously embraced change, working faster, smarter and becoming more technologically advanced are becoming a necessity.
Patricia L. Harman is the editor-in-chief of Claims magazine.
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