Inside the 2018 Claims Salary Survey
Insurance professionals share their insights on the future of the industry, and reveal how their salaries related to their current workloads.
Talk to any insurer, third-party administrator or independent claims adjusting firm, and they will agree that major changes are taking place when it comes to handling insurance claims.
New technology is altering consumer expectations and making it easier to adjust claims in a timely manner. Some companies have siloed their training, as new claims adjusters work remotely from their desks and focus primarily on a specific type of claim such as auto. In addition, the number of experienced adjusters will continue to diminish as more and more reach retirement age.
A recent study by Arthur J. Gallagher & Co. found that 60% of employers have made attracting and retaining talent their primary operational priority. With unemployment at historical lows, employers are fine-tuning their existing benefits and offering new ones such a helping employees pay off student loans or better manage their personal finances.
The study also found that some more forward-thinking employers are viewing employee health holistically and offering services like telemedicine, which allows employees video consultations with health providers. They are also encouraging employees to pursue healthier lifestyles that include regular physical activity, preventative care and medicine, and health risk assessments.
“More than half of employers (59%) expect to increase their headcount over the next two years,” said William F. Ziebell, president of Gallagher Employee Benefits Consulting and Brokerage. “That will be a challenge considering there are currently more job openings than individuals to fill those positions. As a result, employers must get smarter about working within their budgets to offer benefits and compensation packages that engage their teams.”
Technology is playing an important role in the claims process, and while it may be able to offset the loss of employees and even attract new ones to the industry, it will not replace the institutional knowledge walking out the door.
It is against this backdrop that we present the results of the 2018 Claims Salary Survey.
Related: Does working in insurance pay?
Who responded?
This year’s survey saw the first drop in the number of male respondents, and an increase in the number of female participants, which could be a reflection of what is going on in the industry as well. For the last two years, the number of males participating in the survey stayed at 70% or more, but this year that number dropped to 65%. The 35% of female respondents was a significant jump up from 22% in 2016 and 26% in 2017.
The survey was divided into two parts — one for staff adjusters and one for independent adjusters. While they perform the same tasks, the benefits offered by their companies may differ, as do the levels of compensation.
Occupations for the participants included insurer claims staff (39%), independent adjusters (21%), appraisers (2%), special investigators (3%) and other (36%). A closer look at who responded as part of the “other” classification reveals a broader list of occupations, including risk managers, insurance agency claims staff, claims specialists for brokers, claims managers, third-party administrator claims staff and public adjusters.
Survey participants represented the spectrum in terms of their positions within their companies.
Owner – 8.5%
President/CEO – 1.2%
Vice President/Sr. V.P. – 8.5%
Manager/Supervisor – 30.5%
Adjuster – 37.2%
Appraiser – 2.4%
Other – 11.6%
The survey participants are experts in their fields, having anywhere from three to 50+ years of experience.
10 years or less 16%
11-19 years 19%
20+ years 27%
30+ years 28%
40+ years 9%
50+ years 1%
Age wise, the youngest respondent was 24 years old and the oldest was 75. Thirteen percent were in their thirties; 21% were in their forties; 33% were in their fifties and 27% were in their sixties. Given the industry’s concerns about the impending talent gap and the difficulties with attracting young professionals to the insurance field, it was encouraging to see a significant number of respondents in the 40 and under age range.
Benefits & compensation
Over the last three years, the majority of benefits and work tools have remained primarily the same from year to year. Mobile phone technology is changing some of the tools companies provide to field adjusters. The number of companies that provide satellite phones has dropped steadily, and this year it was not even part of the proverbial toolbox. The same applies to GPS or navigation systems. Now that there is “an app for that,” providing a separate system is redundant.
Fewer companies are also providing company cars. The number of staff adjusters with company cars dropped from 40% in 2016 to 33% in 2017, and none of this year’s respondents had vehicles provided. Independent adjusters fared a little better this year. While none of the respondents in 2017 received company cars, 18% of independent adjusters had them in 2018.
Ninety-nine percent of the staff adjusters said they work full-time, and the majority (90%) said they are not allowed to work overtime. Thirteen percent said they work 40 hours or less a week; 76% work 40-50 hours a week; 5% work more than 50 hours; and 6% work over 60 hours. Only 6% felt that their hours had substantially increased, while 16% said theirs had increased somewhat and 73% thought they had stayed about the same. Approximately 5% thought their hours had decreased somewhat or substantially.
For independent adjusters, the numbers were slightly different with 87% working 40 or more hours a week. Here is how their numbers broke down:
Under 40 hours 17%
40+ hours 35%
50+ hours 19%
60+ hours 17%
70+ hours 12%
Almost 18% of independent adjusters said that their hours had increased, while 69% said they had stayed the same and 13% said their hours had decreased.
For claims professionals, there are definite benefits to being a company or independent adjuster. Captive adjusters work for one company; usually have set hours and a specific geographic area they service unless they specialize in catastrophes; may focus on a specific type of claim, such as auto or property; have company benefits and have a steady stream of insurance claims to handle — frequently too many at once.
Independent adjusters have more autonomy to set their own schedules and hours, as well as the types of claims they want to handle. However, they are responsible for marketing their services and usually cover a much larger geographic area and a wider variety of claims. They play a critical role in supplementing a carrier’s adjusting staff when a large catastrophe hits such as a hurricane, tornado, volcano or wildfire.
When it comes to salaries, the numbers show some of the differences between being a company adjuster and an independent. The number of independent claims professionals making $50,000-$100,000 per year was 17% lower than the number of company claims staff in the same range. The difference in the $100,000-$149,000 was significant, with only 7% of independent adjusters falling in that range, while 26% of staff adjusters made over $100,000.
However, the numbers shift significantly in the higher salary ranges with 19% of independent adjusters making $150,000 or more compared to only 8% of staff adjusters. In addition, 22% of the responding independent adjusters collected well over $200,000 in annual fees for their services.
Related: How do you rank? NU’s 2018 Risk Manager Compensation Survey
$50,000 or less 11%
$50,001-$100,000 55%
$100,001-$149,000 26%
$150,000+ 8%
$50,000 or less 14%
$50,001-$100,000 38%
$100,001-$149,000 7%
$150,000 -$200,000 19%
$200,000+ 22%
How do claims professionals think their salaries compare to the hours they work? Opinions are mixed. While more than half of the respondents thought their compensation was commensurate with their responsibilities and experience, there were others who felt very strongly that this was not the case. Many believed they were underpaid based on their level of expertise and that raises for staff adjusters were extremely limited.
Workloads have been a common concern over the last few years. Both independent and staff adjusters feel the pressure to do more with fewer resources and less time. Despite advances in technology, it does not seem to replace the need for actual knowledgeable individuals to provide clerical support, handle different aspects of the claims and complement what adjusters are doing in the field. Some of the frustration comes from the talent gap the industry is experiencing. Replacing a professional with 30 years or more of field claims experience with someone new to the industry and technology or artificial intelligence isn’t quite the same.
“The role of the claims adjuster is being fractured into pieces with the addition of managed care and other programs. Data analytics is forcing claims to become more data entry-oriented and is focused on targeting specifics in order to predict outcomes. Current adjusters are spending more time on data input and less on the claims handling itself. At the same time, workloads are increasing and the qualified staff is decreasing,” stated one respondent.
“It seems the employer-insurer is more interested in process and procedure instead of the bottom-line result,” shared another professional.
“I am very concerned about some companies attempting to process claims via an app,” said one adjuster. “This is not good for the policyholder or the adjuster. Technology is wonderful, but sometimes it is being pushed too far. Apps are difficult to use when the sun is out and results in pictures that are not as good as a simple digital camera, and they are impossible to use when the internet will not connect in locations that are rural or after a disaster. That stops the app cold.”
Related: Talent gap in insurance: How to adapt to senior staff retiring
Many changes are in store for insurance claims professionals. Policyholder expectations are rapidly changing as technology advances in other areas. Just like they can purchase items and track their orders through Amazon, they expect the same sort of service in other areas of their lives, and insurance is no exception.
As the insurance industry relinquishes its legacy systems; implements the use of drones, apps and other technology, there will be growing pains. However, despite these challenges and the frustrations they feel in their job, an overwhelming 79% of respondents said they would recommend this profession to other people, and that is good news for insurers and those looking for a career that will challenge their abilities.
Patricia L. Harman (pharman@alm.com) is editor-in-chief of Claims Magazine.