In networking with others who participate in these forums, one gains a sense of where people are coming from and their level of experience. What I have seen is a larger number of seasoned professionals being placed in the job market for, what appears to be, the first time in more than 15-25 years. Reasonably, you have to ask yourself why there is now such a glut of talent available on the open market, particularly when claim departments are seeing an uptick in claim counts.

There could be a number of answers to that question, but the one that surfaces the most in chat rooms is that these people are being “riffed.” There is merit to that response. Headhunters are placing an increased number of senior staff claim positions on their Web sites, from major carriers in our industry, on a regular basis. What is also very apparent is the rollback in the value of the salaries available for these posted positions.

Companies are facing very tough challenges today. As business declines in the volume of policies, premium goes with it. However, the average for claims paid is holding steady, and we are seeing slight increases in jury awards based on a multitude of reasons.

Employee cost (ALAE and UALAE) is one area where companies can make changes that add back to the bottom line. When positions are eliminated, higher salaries may go with them. Smaller salaries are then offered when reclassified positions are filled. Some companies have implemented a comprehensive review of vendor invoices, making adjustments where they can in order to reduce outside costs. This, too, adds back to the bottom line. When you are talking about adding back one or two percent (or possibly more) of premium cost savings, for a $500 million company, that is a significant increase to the benefit of the company.

Keep On Trucking

Most of us who have been in this business for any real length of time have seen these roller coaster trends in the market. This one, however, appears to be longer and therefore has a longer downturn in store. In commercial auto lines, a long-term reduction in manufacturing results in a ripple effect through the number of motor carriers that can survive to pay premiums. Many independent truckers have left the business, which reduces available premium.

Many of the major fleet operators have seen similar reductions in the amount of freight being moved. Consequently, they have had to lay off drivers, park equipment, and cancel the coverage on that equipment, thereby reducing the amount of premium available to insurers.

In closing, my comments to the gentleman seeking a career change went as follows: “As this recession keeps on 'trucking,' I'm afraid you will see some claim departments become shells of their former selves, in terms of company personnel. Companies may lean toward using TPAs to handle day-to-day file management. Deep cuts to the employees and benefit costs represent another method by which executives can improve bottom lines. However, some companies will bite the bullet and try to ride it out. These companies are the ones that place a high value on the adjuster client agent relationship.”