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Claims Adjuster Crisis – Where Did They All Go?

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Claims Adjuster Crisis – What Happened?

A claims adjuster crisis has been developing since the 1990s. Bill Zachry wrote a great article on the current conditions in finding and retaining claims examiners. I recommend reading it.

Very few Workers Comp articles are saved to my Windows 10 desktop.  Bill’s was one of them.

pic of warning sign workers comp claims adjuster crisis
Safa Hovinen via Wikimedia Commons – Finnish Deep Water Warning Sign

I call them claims adjusters – Bill refers to them as claims examiners.  Regardless, the claims examiner crisis has taken a very long time to slowly develop into a crisis.

See this seminal viral article of mine from long before the claims adjuster crisis on whether or not AI can replace claims adjusters.  The secret is they cannot be replaced due to the need for human interaction at the start and continuing throughout the claim.    See my next article on what can be done to partially substitute AI to replace part of the claims adjuster duties.

Some insurance carriers have taken this one step to alleviate some of the tasks that drive claims adjusters crazy.  Kudos to those carriers and TPAs that have implemented a simple AI mechanism (very simple).

Static Job = Claims Adjuster Crisis

By the way, claims examiners/adjusters have 13 distinct duties that they perform daily. I still have a few claims that I handle for employers/agents as a consultant.  Static job descriptions could be one of the problems.  I wrote the article at the preceding link in 2011 and nothing has changed that much in the daily work life of a claims adjuster.

As a former claims adjuster working in the trenches, let us cover the headings from Bill’s article.  I am going to cover the most critical ones, in my opinion, from the claims department standpoint.  I am sure he will not mind if I use them.

Talent/Skills Gap

When I was attending the NWCDC Conference (Vegas Conference) in 2015, a presenter from Westfield Insurance warned the audience that she had noticed and then analyzed the brain drain in Workers Comp.  She pointed out that the ability to find and train Workers Comp adjusters was diminishing rapidly.

Claims management noticed the workers comp claims adjuster crisis 20 years ago.  I noticed it at conferences.  Where is the younger crowd at safety and insurance conferences?  There was not one to be found anywhere.  Younger insurance agents were everywhere, not so much with claims handlers.

Cost of Claims Transfer = Big Claims Adjuster Crisis

That was the perfect heading in his article.  When I review claims for employers, carriers, TPAs, etc., this is the flashpoint that I see so often in files.  The greater the number of adjusters on a file, the worse the files turn out.

Most of the time, I would say that I see (on average) 2.5 claims adjusters per file.  That number has increased from under two to almost three now.  A claims adjuster crisis in the area of turnover remains a concern.  File continuity goes down quickly.  The injured workers have built a relationship with the adjusters – now that has been destroyed by turnover.

Training/Education and Salary

Many claims adjuster job candidates will tell an interviewer (such as myself) that education and pay are their major concerns.  The education part seems more important now to claims adjuster job candidates than in the past.   Remember that in five seconds, the post-baby boomer candidates from millennials and forward can download an educational app on their phones in a matter of seconds.

Salary will always be the driving force in recruitment and retaining of the more non-glamorous jobs.  Competitive pay has always seemed to be lacking in the workers comp claims adjuster profession.

Ironically, I, left an IT career to join up with a claims department as the pay was competitive.  That was some time ago.

Bottom Line

Bill’s article covers many more topics.  Something needs to occur now to stem the claims adjuster crisis in place.  Thinking that AI will replace many of the job functions is a slippery slope into the valley of mistakes.

 

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2 Responses

  1. Thanks for the “shout out” of my article. The industry needs to recruit (and ratain) people who want to be a service to those who are in need. The job of a claims adjuster is to really take care of the injured workers. To provide prompt benefits, and ensure prompt return to work by providing the best possible medical care. (another challenge with a shortage of medical professionals in the US). We have a lot of work to do to recruit and train the best candidates.

  2. Bill, thanks for commenting on the article. Your well-written and wall thought out article covered quite a bit of ground. I tried to cover the highlights. Covering your article caused me to write a subsequent article that covered one of the basic AI assistants – online claims access by employers and injured workers. Some of the feedback I received on the article was positive. A huge concern that it would cause employer and employee lawsuits against the TPA/carrier was mentioned by a few email commenters.

    I may circle back and cover more of your article in the next few weeks. Thanks, and see you at a conference down the road.

Related...

James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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