Claims Pay Exceeds National Median Incomes

From time to time over the years, and most recently quite often, I hear claims adjusters bemoaning their jobs and claiming they are underpaid.

In an Internet article published April 2, 2006 by the Bureau of Labor Statistics, U.S. Department of Labor, the Occupational Outlook Handbook, 2006-07 Edition (last updated December 20, 2005) contains the following update and outlook for those employed by the claims profession:

Employment
Adjusters, appraisers, examiners, and investigators held approximately 263,000 jobs in 2004. Only 5 percent of these jobs were held by auto damage insurance appraisers. Insurance carriers, agencies, brokerages, and related industries, such as private claims adjusting companies, employed more than 8 out of 10 claims adjusters, appraisers, examiners, and investigators. Relatively few adjusters, appraisers, examiners, and investigators were self-employed.

Job Outlook
Employment of claims adjusters, appraisers, examiners, and investigators is expected to grow about as fast as average for all occupations over the upcoming 2004–2014 decade.  College graduates have the best opportunities, and numerous job openings will result from the need to replace workers who transfer to other occupations or leave the labor force.

Many insurance carriers have downsized their claims staff in an effort to contain costs, and larger companies are relying more on customer service representatives in call centers to handle the recording of the necessary details of the claim, allowing adjusters to spend more of their time investigating claims.  New technology helps to reduce the amount of time it takes for an adjuster to complete many clerical tasks, thereby increasing, in some cases, the number of claims that one adjuster can handle.  However, as long as more insurance policies are being sold to accommodate a growing population, and the demands and expectations of society continue to evolve, there will continue to be a need for adjusters, appraisers, examiners, and investigators. Further, as the elderly population increases, there will be a greater need for health care [and workers’ compensation coverage], resulting in more health [and workers’ compensation] insurance claims.

Despite the recent gains in productivity resulting from technological advances, these jobs have not been easily automated. Adjusters are still needed to contact policyholders, inspect damaged property, consult with experts, deliver the promises and benefits of insurance, and evaluate and dispose of claims. Conversely, although the number of claims in litigation and the number and complexity of insurance fraud cases are expected to increase over the next decade, the demand for insurance investigators is not expected to grow significantly, because technology such as the Internet, which reduces the amount of time it takes to perform background checks, will allow investigators to handle more cases.  Competition for investigator jobs will remain keen because the occupation attracts many qualified people, including retirees from law enforcement and military careers, as well as experienced claims adjusters and examiners who choose to get their investigator license.

As with claims adjusters, examiners, and investigators, the employment of auto damage appraisers should grow about as fast as the average for all occupations. Insurance companies and agents continue to sell growing numbers of auto insurance policies, leading to more claims being filed that require the attention of an auto damage appraiser. The work of this occupation is also not easily automated, because most appraisals require an onsite inspection. However, employment growth will be limited by downsizing in the insurance industry and the implementation of new technology and efficiencies (such as the drive-in appraisal) that is making auto damage appraisers more efficient. In addition, some insurance companies are even opening their own, or making arrangements with, repair facilities, which may reduce the need for auto damage appraisers.

Editor’s Note: And with the predictions of increased storm and hurricane activity over the next decade, the demand for property and catastrophe adjusters will increase dramatically.

Earnings
Earnings of claims adjusters, appraisers, examiners, and investigators vary significantly, depending on the type of claims expertise and geographic location. Median annual earnings were $44,220 in May 2004. The middle 50 percent earned between $33,900 and $57,410. The lowest 10 percent earned less than $27,220, and the highest 10 percent earned more than $72,620.

Many claims adjusters, especially those who work for insurance companies, receive additional bonuses or benefits as part of their job. Adjusters often are furnished a laptop computer, a cellular telephone, and a company car or are reimbursed for the use of their own vehicle for business purposes.  In addition, many companies are taking advantage of technology and allowing experienced and responsible claims professionals to work out of their homes, thereby reducing expenses for offices and additional administrative staff.

As for auto damage appraisers, median annual earnings were $45,330 in May 2004. The middle 50 percent earned between $37,210 and $54,280. The lowest 10 percent earned less than $29,550, and the highest 10 percent earned more than $63,220.

Highest Paying Jobs in the U.S.
According to the 2004, U.S. Department of Labor, Bureau of Labor Statistics (BLS), white collar earnings nationally averaged about $21.85 per hour, blue collar workers averaged $15.03, and hourly service employees averaged only $10.40 per hour. According to the employment policy foundation in Washington, D.C., the nations top 12 paying jobs (average salary) requiring at least a bachelors degree are:

• Physicians & surgeons $147,000
• Aircraft pilots $133, 500
• Chief executives $116,000
• Electrical & electronic engineers $112,000
• Lawyers & judges $99,800
• Dentists $90,000
• Pharmacists $85,500
• Management analysts $84,700
• Financial analysts, managers and advisors $84,000
• Computer & information systems managers $83,000
• Marketing & sales managers $80,000
• Education administrators $80,000

What Does This All Mean?
An honest look at reality indicates that the median salary for claims professionals in this country compare favorably with the national average for all white collar employee and the lowest paid claims adjusters in the country make more than the average hourly service employee.

Those claims professionals who take their profession seriously continue to hone their skills and leverage their trade can enjoy earnings that compare favorably with some of the highest paid jobs in the nation. And, in today’s world, although it would certainly help, you don’t even need a college degree to do so.

Claims adjusting is one of the finest occupations in this country. It provides good pay and benefits, variety and challenge, advancement and professional development, and, more than most occupations, job security.

It also exposes one to adversity and stress and requires a high degree of commitment and discipline. If you aren’t enjoying what you are doing, consider changing jobs to something more “you”, changing employers, or changing your attitude.

But don’t blame it on the pay.

James W. Greer, CPCU<br>
AE21 Incorporated<br>
Association of Property & Casualty Claims Professionals (PCCP)
Association of Workers’ Compensation Claims Professionals (WCCP)