The Insurance Brain Drain.
There isn’t a week goes by without news of a loss adjuster leaving the insurance industry for alternative careers. Some cannot stand the pressure of being answerable to too many masters. The ever increasing compliance burden with more and more regulation. Some have found that they no longer want to work for large organisations, or the corporate machine which has them running on a treadmill whilst trying to salvage some semblance of work-life balance. This is especially so for those in mid-life trying to establish marriage, family and home, as well as their career.
The price of regulation
Insurance Companies have put an ever increasing squeeze on Loss Adjusting firms to perform to greater demands with less authority and with regular audits to monitor standards. They have pitted firms against each other to make them compete for the business and have used their large buying power to drive economies of scale. Loss adjusting companies, who used to get a large volume of small claims to deal with, are no longer getting adequate fee income. They have had to cut their costs to survive.
More and more pressure is being piled onto a reducing number of loss adjusters. Building rates are going up in the market place. Loss adjusters who used to say ‘that’s the agreed rates – we cannot pay any more than that’, realise that is not going to settle the claim any more. But the situation now is so critical that loss adjusting firms who have lost experienced adjusters are relying on more and more ‘yellow pack’ insurer staff who do not have the depth of knowledge and expertise to make decisions.
Race to the bottom
During the recession, most insurers sought better and better deals from their suppliers. At the same time they have increased policy excesses and introduced ‘no-claims-bonus’ incentives into household policies in order to reduce the number of claims. They regularly withdraw flood cover and refuse to re-instate it even in areas that have had flood defence works carried out by the OPW. Now they are increasing premiums, so hard pressed customers have to pay more premium for less protection. Rates for various building repair works have been cut to unrealistic and uneconomic levels. They now need to recognise that there is scarcity of building contractors. Supply and demand, together with rates of pay and inflation pressure is fueling building repair costs.
Insurers have slimmed down to try and regain profitability, but now they are having more and more cases being referred to them for decisions, and that causes delays and poor service. What is it going to be like when the next weather event hits our country? There simply will not be enough capacity there to offer a reasonable level of customer service.
The insurance industry “brain drain” has led to a shortage of skilled claims practitioners to serve the needs of policyholders. The consumer needs to be put back at ‘front and centre’. Insurers need to recoginise that there is a competitive advantage in treating customers fairly and delivering on the promise to pay own damage claims, in a prompt and efficent manner with “good grace”. They need to Wow their own customers who suffer a property claim, to win back their confidence and trust.
The good news is there are many jobs and career opportunities opening up in the insurance industry. They are there to be filled by young people who are tech-savvy and are willing to work hard and study for insurance qualifications. People who are friendly, personable, with good communication and negotiaation skills.
As careers go, there are many fields of business to to be enjoyed working in Insurance, e.g. sales, marketing, customer service, claims, accounting, legal, IT, human resources, etc etc. There are a lot worse ways to make a living. Every day is filled with new and exciting challenges, and no two cases are the same! So it’s not all doom and gloom this Black Friday. There is a bright future ahead and we have a lot to be thankful for.