Marty Brown, an independent insurance adjuster, lays his concerns out simply.
“Heck yeah, we think you need to give us some more work,” he said, speaking in his capacity as the president of the National Association of Independent Insurance Adjusters.
The property/casualty industry is currently rife with mergers and acquisitions, which tends to slow the business coming to independent adjusters, says Brown. Independent claims adjusters are like freelancers, hired by insurance companies to inspect individual claims and see how much the company owes.
Sometimes the merged, larger companies will kick more business over to independent adjusters – but more often, says Brown and others, those companies decide to try to cut costs by handling claims in-house, even doing claims over the phone instead of visiting policyholders in person.
As an adjuster, Brown disagrees with that strategy: Hiring adjusters costs money, he said, but it more likely will save those companies from over-paying on claims. Still, plenty of adjusters complain that insurance companies are ditching them.
Official figures are slim on how the merger-happy environment has affected adjusters, because it’s impossible to say how many of these companies even exist in the first place, said John Fleming, vice president of development and marketing for Cunningham Lindsey, a national adjuster with three offices in Massachusetts and Connecticut.
This niche of the industry has a few big players, he said, but hundreds of smaller, sometimes part-time outfits operate across the country.
Massachusetts and Connecticut are adjuster-heavy states, according to the Bureau of Labor Statistics. Connecticut has the highest per-capita number of non-auto insurance adjusters, while Massachusetts comes in fourth. In auto insurance, Massachusetts ranks first, while Connecticut is fifth.
While those figures don’t break out the independent workers from those who work for insurers, Fleming says it’s usually safe to estimate that about 60 percent of all claims are handled by independent adjusters.
And everyone has a slightly different story about how business is faring these days, Brown said – one company will boast of a great year, while the company down the street will have the exact opposite story. But overall, he said, “There’s less [business] to go around.”
Bob Enos, the New England regional claims manager with Custard Insurance Adjusters, another national company, said he’s optimistic about adjusters’ position.
Yes, consolidation can suddenly deprive adjusters of their clients, he said, but other insurers will decide to outsource more of their business to independents – it can be turbulent, but usually the two forces end up balancing each other out.
Most companies still use a mix of their own adjusters and independent workers, he said – either way, these types of services will always be in need.
“We’re pretty much a recession-proof industry,” he said.
As for just-merged companies, larger adjusters are perhaps in a better position to scoop up that business, Fleming said.
Each consolidation happens differently, but often the company will either move its claims work in-house, or make a deal with a group of small vendors to guarantee them work, but pay them less for doing so.
Regardless, larger insurers generally gravitate to large adjuster companies, Fleming said, to simplify the process.
“Smaller companies, even banded together, are not very appealing in this world,” he said.
