Technology continues to profoundly transform the insurance industry, and its use improves operations and lowers costs. However, the combination of an aging workforce and difficulty attracting, recruiting, and training adjusters makes it hard to keep talented people ready to meet the needs of both policyholders and insurance companies.
The most seasoned claims professionals came up in the age of paper files, clipboards, calculators, Polaroids and tennis balls on a string. The tech evolution in the industry is forcing them to learn the use of laser measurement, laptops, smartphones, GPS and online dashboards—often on the fly. For some adjusters, the tech learning curve has been overwhelming, and they have opted instead for retirement. Others have begun teaching themselves or learning from the next generation of adjusters.
While the number of tech-savvy next-gen adjusters is small, they come to the business comfortable with new technology and a willingness and ability to learn and share their knowledge. Together, the new and the experienced claims professionals have valuable knowledge to impart. It is imperative that both sides make the most of the opportunity to pass along their knowledge.
Finding the Balance
The industry, however, continues to struggle with finding the proper balance between specialized claims training, which is characteristic of the new technology, and the versatility and flexibility across claim types that senior adjusters bring to the table.
Claims adjusters with many years of experience possess a broad range of skills, even if they are now seen as “low-tech.” Back in the day, adjusters were cross-trained to handle a variety of claims. Property adjusters knew how to deal with residential and commercial claims. They also had the ability to work casualty claims. Most seasoned adjusters became versatile and valuable since they acquired the skills and experience to cover any type of loss in any category of claim.
Today, the cost and time associated with intricate training has led to specialization, though it is more like being pigeonholed. Adjusters now specialize in auto claims or casualty claims or personal claims or commercial claims, to name a few. There are a diminished number of adjusters with a full spectrum of knowledge to cover all loss categories.
This specialization, though, leads to problems. The nature of claims is so unpredictable that the pool of adjusters with the skills needed to address a specific claim situation can sometimes run dry when a catastrophic event occurs. Insurance companies staff their claims departments and train adjusters for what they typically need on a day-to-day basis and turn to third party companies to adjust for anything else they may need. That means third party firms are often left with the duty to train adjusters to meet the vast needs of the marketplace.
The insurance industry as a whole—and adjusters in particular—are facing a steep learning curve. Since the tools are constantly changing, proficiency is required in new technologies that continue to be developed to speed up the claims process or make it more accurate. Prospective hires need a fairly high degree of technical aptitude to succeed, but technology isn’t the entirety of the story. There is nothing more valuable than the experience gained from a seasoned claims adjuster who knows how to efficiently settle a claim and who can easily sniff out faulty or fraudulent claims. In an ideal world, new adjusters would get time to serve as apprentices to seasoned vets in order to build their own foundation of basic skills. Likewise, seasoned adjusters could be provided with opportunities to acquire more technology experience from newer claims trainees.
The lack of knowledge in the application of new technologies is more costly than the time and money it may take to get adjusters conversant in the latest tools of the trade. Web-based claims systems, dashboards, online tools and hand-held devices are at the threshold of the direction in which the insurance industry is headed. Companies can ill-afford to neglect the education of their personnel, just as senior and new adjusters alike can’t ignore the new technology that is being put before them.
Hurdles and New Opportunities
Technology has made it easier to file claims and has created a transparent process that allows policyholders to watch how their claims are being handled. The clarity and coverage of cellular telephone and data networks coupled with the versatility of the Web provide adjusters, carriers, and policyholders alike new communications and research capabilities. The immediacy of current communications means that all claims parties—internal and external—expect to have the ability to reach whomever they need whenever they need to reach them. That expectation carries over from insurers to the independent adjusters, who are essentially extensions of the carrier’s brand and service attributes. Meeting the expectations is part of the whole customer experience, and a failure at the claim level often translates into the loss of a client.
The evolution of the claims industry cannot be stopped. Addressing the needs of the business going forward requires action and planning to ensure that adjusters continue to provide quality efficient and cost-effective service to policyholders. Programs must be developed with an eye toward providing experienced claims tutelage along with knowledge of how to use the new tools required for insurance adjustment work.
The whole face of the industry is going to experience even more dramatic change in the next five to 10 years. Much of this change is driven by the pool of aging adjusters who plan to leave the business entirely during this decade. Filling the impending void of talent will require investment. It’s easy to find people who want to learn or be trained. The hard part is finding the trainers and developing programs that make sense economically for the independent adjusting firms and the insurance companies alike.
Too often, independent adjusters or insurance companies spend the time and resources to train new adjusters only to have them poached by a competitor. The unpredictable nature of claims also makes it hard for independent adjusters to train someone new only to have them flee at the opportunity to make a quick buck on the next catastrophic event. It’s a balancing act that is faced by everyone in the industry. The potential for rapid turnover is always there. There needs to be a training structure in place that allows companies to recoup their investment and not worry that training someone new will go to waste.
The time to act is now. Thankfully, the insurance industry is not yet faced with a full-fledged claims adjuster talent crisis. But the potential is right around the corner. The evolution of technology continues. The aging of the stable of experienced adjusters continues. Claims will not halt in order to give the industry time to adjust to deficits in talent and experience. The need to identify and address these issues will continue to be a crucial operational challenge for the industry in the foreseeable future.
Larry Cochran is CEO of IAS Claim Services.