We are insurance adjusters that travel the world handling claims from natural and man-made catastrophes.
Original Post by the author. (Note: This is from a 2004 forum post so the information is dated and many of the vendors have revised or updated their information. It is only provided for general information.)
Well I do believe that this project has come to an end, and at the right place. It is my understanding that Roy will enter the survey into this thread as an attachment to a post, at his convenience after I manage to get a post made to open the thread.
Hopefully, this survey will be a useful resource tool for you. It is not meant to be a stand alone tool, but meant as one tool to be used in conjunction with numerous other points of information that you should have and should use; to determine if you do "know before you go".
Please review the Table of Contents, and pages 3 to 7; so that your walk or hike through the data will be easier to absorb.
While we wait for someone far more skilled at the technology needed to attach files, I'll attempt to offer some comment and hopefully give some further understanding to the survey and comparison.
I used the same presentation format as the original survey. However, going from 47 to 104 surveyed schedules, I split each gross loss (GL) price point into a three page set; as opposed to a continuous column. That way, each GL price point (other than a few at the high end) has 3 pages grouping the fees by page within parameters of "Top third & ties", "Middle third & ties" (which also contains the median fee for each GL price point), and "Bottom third & ties".
Although at the time of gathering the data I was surprised to end up with 104 different fee schedules, I now believe that this is probably only about 50% of the current fee schedules in circulation; if you review the list and consider the minor amount of schedules represented by some vendors and the absence of schedules for other vendors.
As for the body of the survey, the comparative summary, at each of the 27 gross loss price points; I am at a loss to interpret or offer any logic on most (if not all) of the findings. When you look at the charts that follow the body of the work, on page 93 & 94, and consider the weak progression of the median fee across the various GL price points; perhaps the lack of relationship between the fee and the escalating gross loss level is more evident.
Another fairly common twist or turn, to most of the groups of schedules - "groups" being the same vendor/carrier schedule, but with two or more different specific fee schedules, i.e. (wind/hail) & (o/t wind/hail), or (residential) & (commercial) - is that most (but not all) converge to the same rate about mid way through the gross loss price points. The logic and value is sound that a commercial fee schedule (for "adjusting" claims) should be greater than the same for residential claims. But, if they converge to the same rate at $30,000 of GL and greater; the logic and value has been lost. The same concept exists when considering some vendor/carrier fee schedules for hurricane losses and hail losses, converging to the same fee rate after the low and mid point gross loss levels.
The "Top 25" fee score sheets, that group gross loss ranges, is where you can more closely assess a schedule. An effort was made to provide a greater number of ranges and to have them overlap. These "Top 25" sheets should be considered - or the schedule that has caught your eye should be considered - only within the context of its placement (or lack thereof) within the specific range you are looking at. Each schedule, regardless of how good or bad you feel it may be, has its stronger or weaker swings through different levels of gross loss, making it an overall good, average, or poor schedule; and a schedule that you have to relate to in terms of your skills, general levels of damage in the deployed area, and the likely level of claim to be assigned to you.
Conversely, the "Bottom 25 appearances" sheets, tell a different and in some ways a broader story. You will have noticed that there are 27 different gross loss price points used in the body of the survey. This "Bottom 25 appearances" review, groups those GL price points, generally into small, medium, and large loss groupings. Now, the fees noted in this ranking are all in the bottom 25 rankings of one or more of the 27 GL price points reviews that formed the body of the survey. But here, you can get a wide angle view of how these fees performed at all levels. The Pilot (hail) fee schedule is a good example. It was in the bottom 25 ranking of all (12 of 12) gross loss price points at the 'small' loss end. It was only in (3 of 8) bottom 25 rankings at the 'medium' loss range grouping, and it was not in any (0 of 7) of the bottom rankings at the 'large' loss end. It therefore could be characterized that the Pilot (hail) fee in the survey and relative to the survey, is poor at the small loss range, but improves as it progresses up the medium loss range, and is at least in the "middle third" of fees in the large loss range. You can see from a review of this ranking, that other schedules perform quite the opposite from the Pilot (hail) example. Further, there are a good number of schedules that do not appear at all in any of the bottom 25 group ranges.
It should be evident from your review of the survey, that there is a much greater level of "appraisal" type fee schedules in the mix this time. However, the "Top third appearances - by an identified 'appraisal' schedule" ranking, hopefully will draw attention to their apparent disproportionate level of compensation versus the more traditional "adjust the claim" fee schedule. I found it quite surprising that "appraisal" fees sit so well among the "adjust the claim" schedules.
The final ranking review is the "Overall survey rankings". This ranking should carry the least weight of any of the rankings in this survey; as you assess any specific fee schedule. The methodology to create the rankings is the same for each of the reviews, but this overall ranking gives a narrow "one shot" picture; and gives you no indication where that schedule has its individual good, average, or poor points. As well, there appears to be a favorable bias to schedules in this ranking that revert sooner than others to a T&E scale.
Finally, the addendums that are added to the rear of the survey report. Like the rest of the survey, they just bring together available data; and in the case of these addendums, only data that could clearly be reasonably interpreted. Getting past the 'Day Rate' and 'T&E' summaries, does the handling adjuster / claims person get all or just their file percentage of the other addendum summaries, that can be charged to a file? In regards to the "Vendor retained administrative surcharges summary", is it correct to state that this is a vendor exclusive surcharge, not shared with the handling adjuster / claims person?
So, what is an "ideal fee schedule"? Is that too broad of a question?
What role could the "median fee" at each gross loss price point play in any evolution of a "standardized base fee schedule"?
If areas of the survey are not clear, post your questions, and I'll attempt to explain.