With this opportunity come challenges that the independent adjusting industry must meet in order to become a more effective partner to its carrier clients. Feet on the street, so to speak, during storms and other disasters will remain a critical part of independents' functions. But to shift from a task-oriented and catastrophe-related role to a more complete outsource solution for insurers, independents must transform their technology, their operations, and their HR practices to more effectively meet carrier needs.

And they must do this during a time when they also have significant economic challenges. Claims related to any and all business activities are dropping. Fewer truck miles, empty hotel rooms, and deserted retail stores all mean a decrease in incidents and claims. At the same time, the severity of claims that independent adjusters see is on the rise — in one part due to increased desk adjusting, and in another part due to rising claim-related costs, especially medical expenditures. Dealing with multiple carrier systems, standards, and requirements drives up outside adjusting costs. Vendor managers and procurement departments, which first became involved in evaluating adjusting services three or four years ago, continue to influence the pricing and hiring of adjusters.

With those hurdles, how does an independent adjuster drive at a cost per claim that meets a carrier's needs while at the same time delivering a measurable improvement in quality and outcomes? To do both, independent adjusters must consider the following four key changes.

Claim Information and Transparency

Insurance carriers pay independent adjusters to protect their brands through claim processing and fulfillment. In essence, the independent adjuster becomes an extension of the brand. They must deliver a service level equal to or higher in quality than what policyholders have experienced in the past so that carriers can trust them with their customers. Independents need to provide insurers with peace of mind about those processes that touch their customers. Establishing a comfort level with an adjusting firm will encourage an insurer to further outsource claim processes. One critical way to accomplish this is to provide real-time claim information and complete transparency in claim processing.

Current-day dashboard technology allows just that. Such technology can provide a graphical, in-depth view of all open inventory and the ability to monitor real-time claim-handling performance against such key indicators as first contact, first report, and claim closing. Monitoring and real-time views improve claim-handling quality and performance for carriers.

Dashboard technology also allows for better inventory management. Gone are the days when an adjuster leaves open claims to languish when he is called away to assist during a catastrophe. Rather, with the right systems, such claims can be immediately identified and re-routed to other adjusters.

Improving Through Technology

Even with as much promise as it holds, dashboard technology is only one of many applications that can transform the claim-adjusting experience. Independent adjusters need to eliminate as many touches on a claim as possible to become more efficient and drive down costs. Retiring multiple legacy systems in order to implement a single claim and financial system that is innovative and less complicated is one way to do so. Offering online decision support tools to help adjusters triage claims and make faster decisions is another.

Outside the office, hand-held mobile applications can support field visits with the capability to capture data, document instructions, and produce estimates using a graphical drawing interface. Applications that understand the diaries, skills, workload, and travel times of adjusters help optimize appointments for an adjusting field force, maximizing the number of visits possible in a day. Those tools can be used to allow clients to directly book adjusters during the first notification of loss.

Attracting, Retaining, and Training

The U.S. Department of Labor expects jobs for claim adjusters and investigators to grow by nine percent through 2016, due in part to insurance carrier downsizing of claim departments, the rise of desk adjusting, and growth in the number of insurance policies.

At the same time, retirements from the leading edge of the baby-boom generation will begin to drain the pool of experienced adjusters (though the economic recession should slow that loss somewhat as baby boomers are forced to delay retirement). This is particularly devastating in the case of more complex and severe claims, which need to be handled by adjusters with an appropriate level of expertise.

All of this adds up to an increasing need for claim adjusters, both in quantity and quality. Yet the industry as a whole generally has done a poor job of attracting young talent to the business. Though educational backgrounds can be flexible and pay levels significant, particularly mid- and late career, insurance adjusting is not a top-of-the-mind choice for recent graduates.

Once adjusting companies have attracted talent, ongoing training is critical to satisfy both client and employee needs. Training expenses are easy to cut in tough economic times, and unfortunately that is being done in this recession.

To ensure a stream of eligible employees, independent adjusters must partner with recruiters or develop their own comprehensive recruiting and retention programs, including internships, participation in career fairs, and mentoring programs. They must also offer clearly defined career paths for employees, along with continuing education opportunities.

Demonstrating Value

While service is the independent adjuster's business, information is the product we provide to customers. The depth and analysis of data is key to reducing adjusting and carrier costs while also boosting productivity. More and more often, clients have an increasing thirst for global data. A few years ago, clients seldom wanted integrated data for multinational risk management, but it is becoming a more common requirement.

Analysis and provision of data that shows clear cost savings and other outcomes to carriers is a problem for the independent adjusting industry, which has not typically had access to wide-ranging data like that in the risk management information systems used, for example, by workers' compensation TPAs. With limited, task-oriented assignments and localized and fragmented claim handling, meaningful data has been hard to come by because independent adjusters only have a narrow window into management information. New, more up-to-date systems and vendor consolidation should help; fewer independent adjusters mean more information is concentrated at each.

To be an effective partner in the future, independents will need to work more closely with their carrier clients to better understand their needs and costs and learn to extract and analyze meaningful data to show value — not just in terms of cost savings, which can simply commodify a product or service, but also in terms of quality, customer retention, revenue growth, innovation and other factors that are critical to the success of the carrier.

For in this transformative time for the U.S. economy and the insurance industry, the independent claim adjuster who is going to win in the future is going to do a better job of understanding the risk-bearing entity's point of view. Have we treated their customers well? Have we helped improve their loss ratio? Have we helped make them a better insurance company? The more often we can answer “yes” to those questions, the healthier we will all be.