Farmers Adjusters Cry Foul Over Workloads, Claims Handling in Letter to Regulators

By William Rabb | June 20, 2024

Farmers Insurance officials this week said they have spoken with employees after receiving an anonymous letter, apparently from a group of in-house adjusters, accusing the insurer of understaffing and overworking claims professionals.

“Farmers Insurance has always been a leader in customer focus, professionalism, and integrity; however, the current work environment and conditions deeply contradict these core values,” reads the letter, sent May 14 to Farmers and to insurance regulators in Tennessee, Alabama and Georgia.

A Tennessee Department of Commerce and Insurance spokesman confirmed that the department had received the two-page letter, but said he could not comment further on complaints or a potential investigation.

An email that accompanied the letter said that Farmers management had scheduled meetings for Tuesday in Murfreesboro, Tennessee, and for Thursday, today, in Atlanta, to hear more from claims people. Farmers officials did not confirm the meetings but a spokesman said the insurer is aware of the issues.

“We have reviewed the concerns expressed in a recent anonymous email and have engaged with our local team members to encourage continued open dialogue and transparency regarding workplace matters,” the spokesman wrote in an email.

The letter to regulators said Farmers, a subsidiary of Zurich Insurance Group and headquartered in Los Angeles, was guilty of improperly managing claims due to the severe staffing problems.

Farmers Insurance Logo. (PRNewsFoto/Farmers Insurance)“Although we as a group request to remain anonymous for fear of retribution, we feel we have an obligatory duty to report on the current working conditions and overall failure of compliant claims management taking place daily,” the letter reads. “Inadequate staffing and resources have resulted in unachievable expectations imposed on us, and in the best interest of our customers and policyholders as well as ourselves who are responsible for servicing their claims, it’s critical these issues are addressed.”

The issues stem from a number of changes in the last two years, including a significant increase in claims after Farmers acquired MetLife’s auto and home subsidiary, Metropolitan Property & Casualty Insurance, the adjusters said. Farmers’ claims processors were given no training on Metropolitan systems or claims processing, they contend.

In the same time frame, Farmers laid off about 2,400 workers, or 11% of its workforce in 2023. That came shortly after a number of seasoned managers left the company “on their own accord,” the letter notes. Despite calls for help, Farmers did not add staff or address the concerns, the group said.

“The failure to manage claim counts and workload is a significant sign of negligence, which has instilled an environment of heightened tension and stress that simply cannot be expressed,” the letter reads. “Our duties and expectations have become completely unmanageable and detached from reality, which has inflicted harm on our overall health and well-being.”

One former Farmers adjuster and others that have worked for the company told Insurance Journal that the allegations are not surprising.

“Farmers will work the heck out of you,” said Shaun Markwardt, who worked as an adjuster for Farmers from 2007 to 2015. He’s now a public adjuster, based in Knoxville, Tennessee.

Farmers, like a few other major carries, has faced lawsuits by former workers, including agents, alleging misclassification of workers as independent contractors. After one lawsuit, Farmers changed its payment system for some adjusters, from hourly wage to salaried. But Markwardt said the alleged abuses continued, with adjusters expected to quietly work long hours without collecting overtime pay.

“I was working 80 hours a week,” he said. “I was rookie of the year one year but I had to kill myself to do it.”

Other than that, though, Markwardt said he had a positive experience at Farmers and credited supervisors for being good mentors in claims handling.

The anonymous adjusters group is demanding that Farmers hire more claims staff members; devise retention programs to keep veteran adjusters on board; complete a comprehensive assessment of adjuster workloads; comply with federal occupational safety guidelines on worker fatigue; and give claims professionals more time to complete continuing education courses.

The adjusters’ allegations come at a time that Farmers is facing some other issues. A California prosecutor last week filed suit against Farmers and other home insurers, charging that the firm systematically underinsured homes in violation of state regulations.

A year ago, Farmers earned the ire of thousands of policyholders after it halted new homeowners and auto business in Florida and California. A similar planned withdrawal in Georgia was disallowed by the state insurance commissioner, who said the changes had not been approved by his department as required by regulations.

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