Surveying the changing world of claims

The claims insurance workforce continues to change. Affected by retirements, new technology, increasing customer expectations for transparency and flexibility in service options, carriers are retooling both their technology and their staffing options.

The Bureau of Labor Statistics (BLS) says that in 2018 there were 206,090 claims adjusters, examiners and investigators; 230,470 insurance claims and policy processing clerks; 375,720 sales agents; 59,960 first-line supervisors and managers; and 84,540 underwriters in the insurance industry. The average hourly salary for adjusters, examiners and investigators was $32.24 and the average annual salary was $67,060.

A 2018 survey by GreatInsurancejobs.com found that of the 53 insurers interviewed, 92% had open jobs and 43% planned on hiring more than 50 employees in 2019. The leading positions they were seeking to fill included sales, claims, technology, customer service and account managers. According to the survey, the average age of those working in the insurance industry is 59 and many professionals are working well past retirement age. Companies are striving to capture their knowledge and expertise through training and mentoring programs, AI and other means.

With this information as background on the different aspects of the insurance industry, here is what we learned from the 2019 Claims Salary Survey.

A look at the industry

Our respondents came from over 250 different companies, the majority were from insurers or independent adjusting firms. The survey was broken down into two different areas — one focused on questions for staff adjusters and the other for independent adjusters. While both types of adjusters perform many of the same tasks, there is a difference in the level and types of compensation, as well as some of the benefits that are offered.

Twenty-two percent were insurer claims staff, 16% were independent adjusters, 5% were claims specialists for brokers, 17% were claims managers, 9% were claims executives, 2% were special investigators and the remaining 29% comprised agents, risk managers, customer service representatives and actuaries.

Last year, the survey saw a significant jump in terms of who responded. The number of female respondents increased from 22% in 2016 and 26% in 2017 to 35% in 2018, a reflection of the growing number of women working in the claims industry and holding management positions. That number held for a second straight year as 35% of this year’s respondents were female and 65% were male.

The positions held by the survey participants represented multiple responsibilities within insurance and independent adjusting firms.

• Owner – 5%
• President/CEO – 4%
• Vice President/Senior V.P. – 12%
• Manager/Supervisor – 28%
• Adjuster – 36%
• Other – 15%

As has been the case in previous surveys, our respondents are among the most knowledgeable and proficient in the field, many with decades of experience in the insurance industry. Their experience ranged from several professionals who were just completing their first year in the industry to those with more than 50 years of expertise.

• 1-5 years: 10%
• 6-10 years: 8%
• 11-15 years: 11%
• 16-20 years: 15%
• 21-25 years: 16%
• Over 25 years: 39%

In general, respondents ranged in age from 23 to 71, but the majority of respondents were in their fifties and sixties. Six percent were in their twenties, 12% were in their thirties, 24% were in their forties, 29% were in their fifties, 27% were in their sixties and 2% were 70 or older.

Salaries & benefits

Over the last few years that Claims has conducted this survey, there has been a slight shift in the types of benefits provided to adjusters. As mobile technology has improved, it has negated the need for items such as a separate GPS or navigation system and satellite phones. The number of individuals who are provided a company car has also seen a gradual drop, although independent adjusters are still more likely to have a company car than staff adjusters are. Independents are also more likely to be allowed the opportunity to work remotely and to have their home internet access reimbursed. Company adjusters are just as likely to have their travel reimbursed as their independent counterparts are.

The primary benefits for both independent and staff adjusters continue to be life insurance, medical insurance and dental insurance, in addition to some sort of retirement plan or 401K. Both company and independent adjusters also receive short-term and long-term disability, as well as access to supplemental life insurance programs.

When it comes to the number of hours worked in a week, 98% of the staff adjusters who responded work full-time and 2% work part-time. The good news is that more and more companies seem to be allowing their staffs to work remotely, a major change from what we’ve seen in previous surveys. Since independent adjusters have more control over their hours to some degree and their assignments can be more catastrophe-driven, 80% said they work full-time and 20% work part-time.

The number of hours worked a week has stayed fairly consistent for both staff and independent adjusters. Of the staff adjusters, 10% said their hours had substantially increased; 11% said their hours increased somewhat; 76% said their hours had basically stayed the same from the previous year; 2% saw a small decrease in the hours worked and 1% saw a substantial decrease in the hours worked.

Independent adjusters saw a more substantial increase in the number of hours they worked per week with 32% seeing an increase; 8% seeing a decrease; 36% said their hours had stayed the same; and 24% weren’t sure if there had been any change in the number of hours they worked.

And, just how many hours are adjusters working on average? Staff adjusters definitely work more than their independent counterparts do. Only 7% worked less than 40 hours a week (37.5 hours was still considered full-time); 36% worked a straight 40-hour week; 23% worked more than 40 hours; 16% worked an average of 50 hours per week; 11% worked more than 50 hours per week; 5% worked 60 hours or more weekly and 1% worked an average of 70 hours. While some insurers still try to limit the amount of overtime allowed for their claims staff, there are times when it’s necessary or the number of hours may be capped to five or less. Claims managers and executives were far more likely to work 60 or more hours a week as they juggled the different claims responsibilities within their companies.

In contrast, 23% of the independent adjusters worked part-time; 15% worked 40 hours per week; 31% worked more than 40 hours; 8% worked 50 hours; another 8% worked more than 50 hours per week; and 15% worked 60 hours per week. They also said that they worked anywhere from five to 260 days or more a year on catastrophe assignments, which was comparable to last year’s figures. Their compensation comes from a gross fee schedule (16%), time and expense fee schedule (36%), a daily rate (8%) or some combination of these (40%).

When it comes to annual salaries, the bulk of staff and independent adjusters earn somewhere between $50,000 and $150,000, which is very consistent with what the salary survey has shown over the last three years.

Here’s a look at how the salaries break down. Keep in mind that these figures include staff adjusters, claims managers and claims executives, which could affect how the numbers fall because of the salary ranges.

How do claims professionals view their salary versus their workload? As we’ve heard in previous years, the workload can be almost overwhelming at times and the responses seemed to be split with almost half of the respondents feeling that their salary was commensurate with their job responsibilities while the other half felt that the workload and responsibilities were worth being paid approximately $10,000 or more per year.

No one disputes that the number of professionals leaving the industry is creating a strain in the area of claims and they also recognize that this is one of the most important, customer-facing areas in a company. Between increasing customer expectations for immediate and transparent service and ever-changing technology, the ability to communicate with policyholders through multiple channels is taking on increased significance for claims professionals. The art of communication is particularly important, regardless of whether it is conducted electronically or face-to-face. One respondent said, “Other staff members do not realize how important the claims service is for retaining clients.”

Forward-thinking companies are recognizing the value their claims professionals bring to their policyholders and companies and using them as part of their marketing efforts. Knowledgeable adjusters who can determine what the policy covers, how it applies to the loss and explain it clearly to the policyholders while setting realistic expectations can effectively manage claims and keep them from escalating in time and cost. Our respondents said that while their salaries, for the most part, were fair, they believed that they should be higher due to the knowledge, training and oversight involved in the process.

Looking toward the future

Despite these challenges and changes, 55% of the respondents still think that the claims profession has a positive future. They see the value of allowing more flexible work hours and the possibility of working remotely for new employees. Seventy-five percent said they would definitely recommend this profession to others and they see the benefits to claims as a career choice.

However, they also recognize that some companies are not providing the same level of training they once did, which affects the efficiency with which claims are handled and the decision-making process. Less training will lead to poorer decision making, which can increase the final claims costs if they need to be reexamined or end up going to court.

There are beginning to be some small changes in the industry — the greater use of claims technology, more flexibility in working remotely, more women entering the industry (or participating in the survey), and salaries increasing or at least holding steady. Several respondents commented that they are definitely seeing changes and that it’s no long the same as it was even five years ago. They understand the need to adapt and adjust as customer expectations vary and more people leave the industry. No doubt, there are many more changes ahead for the industry.

Patricia L. Harman is editor in chief of Claims Magazine and chairman of the America’s Claims Executive Leadership Forum & Expo (ACE). If you want more insights on what the claims workforce of the future will look like, join us in New Orleans from April 20-22, 2020 for ACE.

Related:

• Inside the 2018 Claims Salary Survey
• Handling a new world of claims challenges
• Claims: Caught between a rock and a hard place no more