Insurance Claims Adjusters
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 3,500 insurance claims adjusters in the US investigate, appraise and settle insurance claims. Public adjusters negotiate settlements with an insurance company on behalf of a policyholder. Company staff or independent adjusters represent the interests of the insurance company. Firms may specialize or offer services across a broad range of fields.
Payments Based On Contingency
Many claims adjusters primarily work on contingency and only receive payment when a claim is settled.
Integrated Process And Technology
Advances in technology in the insurance business have increasingly moved parts of the claims management process from the field back into the carrier’s office, reducing dependence on third-party claims adjusters.
Industry size & Structure
The average insurance claims adjuster operates out of a single location, employs 16 workers, and generates about $2-3 million annually.
- The insurance claims adjuster industry consists of about 3,500 firms that employ 57,000 workers and generate over $8 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for about 61% of industry revenue. The top four companies account for 25% of industry revenue.
- Large companies include Crawford & Company, Sedgwick, and IAS Claim Services. The largest firms may have hundreds of offices throughout the world.
Industry Forecast
Insurance Claims Adjusters Industry Growth
Recent Developments
Nov 12, 2022 - Industry Is An Easy Fraud Target
- Insurance fraud can cost up to $309 billion a year, according to the Coalition Against Insurance Fraud (CAIF). Fraud comes in many forms, such as misrepresenting facts on an insurance policy to receive a lower premium, exaggerating an injury in the hopes of gaining additional benefits, and large-scale organized fraud whereby organized international criminal groups and terrorist cells launch highly detailed campaigns targeting specific insurance carriers. CAIF cites the insurance system's gaps in how claims are processed, which make it a very easy target, as a key cause of the high cost.
- Catastrophe modelling firm Karen Clark & Company released an insured loss estimate of $63 billion for Hurricane Ian, which would rank the storm second only to 2005’s Hurricane Katrina, which cost re/insurers nearly $90 billion in insured losses. Verisk estimated industry losses would range from $42 to $57 billion across both Florida and South Carolina. This excludes any costs to the National Flood Insurance Program or any cost of litigation or social inflation, which Verisk says could push costs above $60 billion. S&P Global Ratings forecast that Ian will result in losses of between $30 and $40 billion, with losses likely to be toward the higher end of the estimate. Natural catastrophe monitoring service Iceye estimated there are 358,850 properties within the regions flooded by Ian, of which some 84,000 have been affected by water levels of 2 feet or more.
- Dissatisfaction with the claims experience is a key reason that customers may switch insurers according to the “Why AI in Insurance Claims and Underwriting?” report. The report is based on surveys of more than 6,700 policyholders across 25 countries; more than 120 claims executives in 12 countries; and more than 900 US-based underwriters. Nearly one-third (30%) of dissatisfied claimants said they had switched carriers in the past two years, and another 47% said they were considering doing so. The report states that artificial intelligence technologies could improve the claims process: Four in five (79%) of the claims executives surveyed said they believe that automation, AI and data analytics based on machine learning can bring value across the entire claims value chain — from flagging fraudulent claims, to damage assessment and loss estimation, reserving, adjusting, processing optimization, and subrogation.
- Claims adjusters may struggle to provide fair and accurate appraisals due to high inflation. Reinsurance firm Swiss Reinsurance noted in a recent report that auto and property insurance claims are likely to be most affected in the short run due to “particularly high construction and car part costs.” Rising labor costs add further to the claims inflation, which is not expected to abate substantially soon due to further automotive industry supply chain issues.
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