Compensation Up As Adjusters Struggle With Heavy Caseloads, Staffing

By Denise Johnson | June 24, 2013

In an economy where many haven’t seen a salary increase in years, claims adjusters are enjoying increases from 4 percent to 6 percent, which at least beats inflation.

The average annual salary for claims adjusters nationwide is $73,000, according to the Claims Journal 2013 Job & Salary Survey. The survey results are based on responses from 647 participants in 46 states during April and May 2013. This is the second annual survey.

The survey also confirms that staff adjusters make more than independents.

The survey results reveal a stable and mostly satisfied workforce of aging adjusters who are less worried about keeping their jobs than they are about their caseload and about what they say is a lack of employer commitment to hiring experienced adjusters to replace the many who may soon be retiring.

Most adjusters work in an office but a growing number also work from a home office.

Almost 62 percent say they are satisfied with their overall compensation, according to the 2013 survey.

More than 80 percent of adjusters work between 35 and 50 hours per week. Nearly 54 percent of respondents get 21 or more days off.

Despite the differences in salary, all of the compensation increases reported – ranging from 4 percent to more than 6 percent – beat the current estimated inflation rate of 2 percent.

Staffing continues to remain stable. Claims department staffing remained level in 2012 with the majority of respondents (73 percent) indicating they do not expect their claims departments to increase staff size in 2013.

The majority of adjusters indicated it is unlikely staff size will increase in 2013.

Respondents agreed overall that staffing is a problem.

One stated that “industry-wide, I think staffing has always been too low in claims.”

The survey also found that while reduced staffing and increased work remain top complaints among claims adjusters, most continue to like their jobs.

In fact, there was an increase since last year’s report in adjusters reporting that they like working for their employer. There was a 6 percent increase among independent adjusters and a 3 percent jump among company staff as management figures remained the same as last year.

Adjuster Caseload Conundrum

The number of files handled by respondents varied widely, likely dependent on the line of insurance and adjuster experience.

Only 6 percent of adjusters had settlement authority of $500,000 or more, while a combined 58 percent had authority up to $50,000 suggesting companies are cautious despite adjusters’ years of experience.

Kevin Quinley, founder and principal of Va.-based Quinley Risk Associates, says that the experience of the adjuster, complexity of the case, line of coverage, administrative support, technology and best practices are all factors that can affect an adjuster’s caseload.

“More experienced adjusters…generally, you expect them to shoulder higher case loads than newbies,” Quinley said.

Claims managers should be cautious, however, because the number of years of experience may not match the adjuster’s ability to grasp new concepts or complex claim scenarios.

Quinley said some adjusters plateau after a certain number of years, so it’s important to not only look at the number of years of experience but also at the individualized capabilities of the employee.

Administrative tasks like file set-up and photocopying can bog down adjusters, something that should be taken into consideration when assigning claims.

“We need to be creative in how we develop solutions to alleviate some of the workloads for front line adjusters and supervisors,” offered one manager.

Best practices and mandatory service standards can breed lower quality file handling for adjusters carrying a heavy workload, Quinley said.

Twenty-four-hour contact on new claims, returning calls the same day, and detailed file documentation can impose an added-time demand that claims management hadn’t considered.

“When these are embedded in mandatory service standards they can dilute a claim rep’s ability to control and work the caseload,” he said.

Quinley said it’s crucial for management to monitor adjuster caseloads to maintain file quality, staff morale, turnover and to control leakage. More importantly, it can save the company from bad faith claims.

Based on an analysis by Demotech Inc., the official research partner of Claims Journal, the claims industry overall remains dominated by seasoned employees. Claims departments in the West and Midwest – at 29 percent each – generally employ less experienced adjusters, while 93 percent of East Coast insurers employ adjusters with six or more years of experience.

When Employees Telecommute

The majority of adjusters – 66 percent – continue to work in an office environment, according to the Claims Journal survey results. Almost 16 percent work from home, but a greater number of survey respondents – 19 percent – conduct work both at home and at an office.

According to Chris Tidball, casualty claims consultant with San Diego-based Mitchell International, whether a claims department embraces telecommuting depends on the company and the culture.

“There are pros and cons to everything. But I do think that depending upon the culture, there are carriers out there that are embracing it, and there are probably some that are somewhat resistant to it,” said Tidball.

Whether the idea of telecommuting is accepted or not may also depend on the line of coverage.

“I think that you find a lot of remote adjusters that are really PD [property damage] focused. For example, it might not make sense to open up a claims office in Montana. If you’re a large national carrier, you have policyholders there or in other remote locations. It might be cheaper to actually have an adjuster on your payroll that can do multiple assignments, as opposed to say hiring independent adjusters,” Tidball said.

Some obstacles to telecommuting: employees need to have self-discipline and not be easily distracted. It’s also tougher to manage people, Tidball said.

How a claims department’s best practices affects its telecommuting policy is debatable.

“How does telecommuting impact behaviors as opposed to working in an office? As you’re looking at your best practices, you have to take that into consideration. I may have to have some actual best practices in place that I wouldn’t have if everyone was in the office. It could be as simple as, what’s your Internet policy? You don’t want your people sitting at home on Facebook all day,” Tidball said.

He said there might be stricter guidelines around Internet access, phone usage and the hours worked.

There could be privacy concerns related to telecommuting, he said.

“There could be. If you think about HIPAA, for example, if you are a medical claim rep, you’re working at home, you’re processing medical bills. You have people’s personal information up on your computer screen from morning to night. By law, that can’t be shared with anybody. You do have to be cognizant that if you get up from your computer, you hit the control-alt-delete. Because even if it’s an accident, someone comes, your child or your spouse, they jump on a computer and either hit ‘send’ by accident and it goes to somebody else’s inbox…You could have problems there,” said Tidball.

Another factor to consider is whether telecommuting affects job promotions.

“I think it can. Nothing replaces face time with executives in an organization. They may hear about great things that people are doing. But a lot of those promotions come from those interpersonal interactions. Because they want to know that the future leaders embrace the culture, they have the personality to do the job, they have the professional acumen,” said Tidball.

Another consideration is education and how adjusters learn on the job.

“One of the things to consider is how we, as professionals, grow. Just thinking back on my own career, like many adjusters, we get hired, we go to claims school, we build those relationships that carry on for years. We move into a claims office. We often learn things from the people around us,” Tidball explained.

“In claims school, you learn the textbook way of doing things. For example, I was trained in Cleveland, Ohio, but my first claims job was in an office in South Central Los Angeles. It’s a much different environment. The way claims are handled in that Southern California environment isn’t necessarily what’s taught in the textbook. I learned a lot of that from the people around me. In a remote location, it’s very difficult to learn that,” Tidball explained. “From a learning phase, being in the office during those critical, formative years, I think, is very important.”

Talent Management

Though there has been much discussion surrounding the aging claims workforce, employees report that many employers do not have talent management programs in place. A little over half of the respondents to the Claims Journal 2013 Job & Salary Survey reported their company does not have a talent management program in place.

Managers are most concerned with the “lack of incoming talent” and with companies that aren’t willing to spend money to attract and retain experienced employees. “Retirements will leave a void of experience which is not being replaced,” one manager said.

In those companies that offer a talent management program, 61 percent said that it includes educational opportunities, but 59 percent said that the program does not include a career path plan. This, despite survey figures which indicate that while management age remained the same as last year, claims staff has gotten older.

Talent Management Concerns

As more employees appear to be staying put, companies may neglect their talent and retention strategies “out of a false sense of security,” according to a global talent survey, Talent 2020, released by Deloitte in 2012. However, the report warns that organizations’ top performers are also those with the most employment opportunities.

“Instead of addressing broad concerns over high turnover rates, employers now face a more targeted challenge,” said Bill Pelster, principal and U.S. Talent Services co-leader, Deloitte Consulting LLP. “Companies must adjust their talent management initiatives to focus on retaining employees with the critical skills required to advance their business in today’s turbulent marketplace, as they pose the biggest flight risk.”

Claims Journal survey respondents say they are worried that the claims talent pool is continuing to shrink as senior staff retire at a quickening rate.

“Retaining key employees is not simply a human resources function,” said Pelster. “Instead, retention starts with the C-suite and extends through virtually every level of management, down to line managers and supervisors. Strong leadership is one of the most important factors in differentiating between an employee who is committed to their current job and one who is constantly searching for the next career opportunity.”

Was this article valuable?

Here are more articles you may enjoy.

From This Issue

Insurance Journal West

Insurance Journal Magazine