One of the biggest issues affecting the P&C industry is the changing labor market. In the wake of the pandemic, hybrid and remote work has persisted. This “new normal” has created challenges for employers. The problem is compounded as older professionals retire, leaving claims organizations to bridge the knowledge gap as younger professionals enter the market.
A report by the National Association of Mutual Insurance Companies indicates 50% of the current insurance workforce will retire over the next 15 years. In addition, a 2022 survey found nearly a quarter of claims adjusters plan to retire by 2027. These stats portend a talent chasm.
For now, most claims operations have stabilized their staffs by backfilling the notable headcount deficits of the early 2020s. But the cumulative effect is a scarcity of deep claims technical expertise as compared with pre-pandemic levels.
See also: Overcoming the Talent Crisis in Underwriting
Where to Start?
Once new-but-inexperienced, adjusters are onboarded, the primary objective is to quickly ramp them into productive claims handlers. Prior to the pandemic, formal adjuster training was augmented by “in-office osmosis” – knowledge absorption from experienced adjusters as they talk on the phone with claimants, medical providers and lawyers. A shortage of highly technical adjusters coupled with remote and hybrid work has altered that workplace dynamic, creating hurdles for adjuster training and knowledge transfer. Even as claims organizations find their equilibrium, accelerating talent development will remain an operational obstacle.
The challenge of shifting to a claims staff with less tenure and expertise is magnified by several factors. First, high turnover put pressure on claims organizations as caseloads became bloated while vacancies were backfilled. Empty seats also precipitated claims reassignments, requiring busy adjusters to get up to speed on older, often complex, claim files. Most claims departments are well equipped to handle this; however, a dearth of experienced technicians adds stress.
A more troublesome issue is the menacing profile of claims now populating an adjuster’s inventory. The surge of social inflation — a trend of rising claims costs due to increased litigation settlements, jury awards, anti-corporate bias and aggressive plaintiff attorney tactics — is creating a high degree of difficulty, especially on third-party bodily injury claims. In fact, research by Verisk shows the average size of verdicts over $1 million exploded from $2.3 million in 2010 to more than $22 million in 2018. In 2019, there was a 300% jump in verdicts of $20 million or higher.
As organizations continue to deal with short staffing and less experienced adjusters, it is more important than ever to equip claims professionals with tools to recognize and manage combustible, but often camouflaged, claims.
Tech to the Rescue?
To help retain the knowledge and decision-making experience lost as seasoned professionals leave the industry, more claims organizations are employing technology to guide the new adjusters. The solutions hinge on better tools and decision support, especially for unsuspecting junior adjusters who encounter potentially explosive claims. That’s where decision support can act as an “early warning system” that helps bridge the knowledge and experience gaps.
Embedding intuitive analytic tools into the claim process lifts the technical expertise of low-tenured adjusters and provides the guidance and insight to effectively identify and handle more complex claims. For instance, functionality integrated into platforms can provide the following insights or support:
- Delays and gaps in treatment or treatment extending beyond guidelines
- High-frequency plaintiff attorneys – medical provider combinations driving abnormal treatment activity and charges
- Tools that can organize and synthesize hundreds of medical bills and reports into a concise clinical summary view of a patient’s treatment and condition
High data volumes in a usable format are key. At Enlyte, for instance, we have billions of medical records that allow us to deploy analytic insights to adjusters. For workers’ compensation, connecting medical data (injury type, treatment patterns, etc.) with claimant data, such as age and comorbidities, can help flag cases with high severity relative to disability guidelines. We are armed with a vast database that includes over 1 million medical providers, early analysis of which suggests certain attorney–provider combinations produce significantly higher medical usage and costs than comparable claims with similar injuries.
See also: The Next Generation of Talent
New Adjusters, New Opportunities
The evolving workforce creates an interesting opportunity to rebrand claims management. We have been grappling with an erosion of deep claims expertise for several years, and the pandemic and "great resignation" have exacerbated it.
So while claims organizations are struggling to fill vacated positions, there is a much-needed youth movement underway. And though these new professionals are green relative to claims handling, they’re seasoned veterans in their affinity for digital capabilities. This makes them well suited to quickly adopt and implement technology tools.
For an industry traditionally sluggish about innovation, this change is refreshing. A budding youth movement will help motivate our industry to the next level of innovation and advanced claims capabilities, reinventing how claims organizations serve injured parties and policyholders in their time of need.
