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Gale Hawkins
Posted on Tuesday, January 11, 2000 - 10:38 pm:   

With words like devolved, overly complicated, slow mess and regurgitate being used to describe software drives home the point that ALL the adjusting software on the market today is substandard to what it could and should be. KISS often is overlooked in development. Why do we see increasing software prices yet a decrease in performance?

Most adjusters like the features added in the new Windows versions but not one adjuster in 3.5 years has every said to me that the Windows version of a DOS program was faster. In most industries the cost/performance ratio of software is improving yet some how the demand for a better cost/performance ratio is not strongly desired when it comes to adjusting software. Why do you think this is? Do the carriers, vendors and adjusters not understand the real cost of software is not in what you pay upfront? Until recently there was so little difference in what the different adjusting packages sold for that a case may could have been made for price fixing because of the way things looked on the surface.

Again the real cost ultimately to the carrier is the expense on the backside of the purchase. Required training cost does vary between adjusting software packages but may not be evaluated prior to purchase. The effective rate at which a package lets one knock out claims is even more critical because a low efficiency package will continue to cost the carrier long after the training curve, regardless how steep, is mastered.

To prove this point let us just say all adjusting software cost $100 per adjuster per year. Second there are the actually training fees that some software vendors market to their users. Let us say that cost varies from FREE to $500 per adjuster. Third is the efficiency ratio of the adjusting software. Agreed this could be considered too subjective to measure by some but that would not be factual. ALL things can be objectively measured if science is applied.

If three adjusters were on day rates and all things were equal except the adjusting software that they were using and first one did 4, the second 6 and the third did 8 claims it would be easy to see that the carriers cost is much greater for the first adjuster than the third. Of course if you were working per file you would instantly know which package you would want to be using. One can see the carriers, vendors or adjusters using the software that the third adjuster was using will long term win out over others using the same software as first adjuster since it would double the number of adjusters required. Say a carrier could move from 200 to 100 adjusters due to changing to an adjusting software package that could double each adjuster’s output and the real cost for each adjuster was $50K. That would add $5 million dollars to their bottom line each year. Yes there are other factors that come into play but anyone that can count knows the difference in adjusting software’s effectiveness translates into major $$$$.

In the past some carriers wanted a certain vendor’s software because of this its database of prices were preferred but that is fast becoming a thing of the past and I will explain why but first here is a real live comparison from this past week. Boeckh is known for its premier cost database in the adjusting industry. One adjusting firm that is making the transition from Boeckh to PowerClaim was concerned over the cost database price differences. A $15K fire loss was run on both Boeckh and PowerClaim, making sure the same line items and city cost index were selected and PowerClaim total lost was $200 less than Boeckh’s, for less than a 2% difference. Most will agree neither the carrier nor insured would fight the difference.

In all fairness one should expect the same results from DDS as PowerClaim since we both use the National Renovation and Insurance Repair Database from the Craftsman Book Company. That does raise the question if Boeckh’s version of DDS called IntegriClaim (please do not confuse it with our PowerClaim when comparing ease-of-use or value) is the same for the most part except it has the old Boeckh’s database and both the Boeckh and Craftsman’s prices seem to be of equal validity, what is the real difference between the two packages as far as most adjusters are concerned?

Why is the validity of pricing books becoming more equal? The digital revolution is why. As more and more suppliers of building materials place their databases out for the general public to access one can gather several different sources and average them together. To a lesser extend in am sure yet it appears labor cost are becoming more easy to access in a digital world. Once the carriers realize they are paying a premium for what is becoming a commodity of more or less equal validity, it will have a major negative impact on some old-line companies that forget to get the cost of their products in line with the new reality.

CADO, PLRB and many other groups with a vested interest in the true cost of adjusting software could do the research that could revolutionize the adjusting software you will be using in the future. Do you think the digital age just kind of snuck up on the adjusting industry and no real brainpower has been put into software buying decisions? If you are buying an AC unit or a truck you can read they efficiency ratings. Do you think that since some of the carriers are seeing their bottom lines shrink they will look more to digital age tools in order to become more efficient?
Jim Flynt
Posted on Saturday, January 08, 2000 - 5:35 am:   

Gale, your example of an HO-4 drop down from a computer estimating program to show what is covered and not covered is an excellent one. It is also an "easy" one as well.

The only coverage afforded by an HO-4 is for Coverage C (Contents) and Coverage D (Loss of Use) for Broad Form perils. If your estimating program has a contents inventory and pricing guide, or an ALE program component, then perhaps the HO-4 "model" would help some. (Section II coverage is not being addressed here: i.e., liability and medical payments)

The problem with trying to introduce policy coverage into an estimating program, in my opinion, is that there are always exceptions, exclusions, and conditions in coverage as well as certain sub-limits which cannot be anticipated by a computer program in all circumstances, and they may give a new rookie adjuster a false sense of security.

Having numerous policy coverage designations as Storm Crow mentions, I don't know whether I fall into his category of dumbest or brightest, but I do agree with him that a serious study of insurance policy is quite dry. It only comes alive when the student understands all of the many applications and circumstances where insurance can apply and be used as a protective cover for the risk sensitive insured.

Gale I DO understand your claims manager's statement about the retired company adjuster who "knew coverage" and the carrier's comfort in knowing he would "catch coverage problems" on a storm with fewer reopens. Those adjusters who do know coverage as opposed to those who think they do will always be in demand.

It is not enough that one can "read" the policy, but without case study to learn of the various exceptions, exclusions, conditions, and sub-limits the policy affords, and to be able to take this knowledge around to apply in real life-real time situations, the adjuster who thinks otherwise is just not an adjuster, but merely a warm body to hold down the fort until a real adjuster is available and the warm body can be sent home. It is too late to learn policy when the adjuster waits until the storm hits and then tries to read and study policy.

I have always said that an adjuster is an adjuster when he can handle and adjust the claim, and explain policy to the homeowner who just happens to be the President of the insurance carrier/company as well as any other member of the general public. As we say here in North Carolina, that is when the rubber meets the road.
Posted on Friday, January 07, 2000 - 11:51 pm:   

Nothing will ever replace the ability to read the policy and ask questions....

There are many organizations that try to paper the adjusters. mostly the paper is just that, dry book learning with little or no roots in reality. some of the "dumbest" (and some of the brightest) humans I have ever met have their various designations, I still am waiting for someone to develope of program that combine the book learning with street smarts and ability, not just the capabilty to memorize and regurgitate.
Happy adjusting
Posted on Friday, January 07, 2000 - 9:36 pm:   


Adding policy coverages to software may be more of an additional burden than it is worth. What we revere out here are programs that are simple and fast. An example of a simple program was the 5.0-5.8 Xactimate series. ( Yes, I know it didn't have any photo sheets or flood forms.) It then devolved into a overly complicated slow mess with the windows versions of 6.0->. It is now a slow &
bloated and not easy to work. Just food for thought. Simplicity is a virtue. What we need is not what we necesarily want.
Gale Hawkins
Posted on Friday, January 07, 2000 - 8:13 pm:   

David thanks for your excel post. It helps me better understand the perception issue concerning Cat Adjusters. Recently a claims manager with a carrier made the statement that they liked to use a certain Cat Vendor because they would send in a certain retired company adjuster that really “knew coverage’s” to manage the Cat Loss. Since the carrier knew this retired adjuster “knew coverage’s” they expected fewer claims would have to be reopened since he would catch coverage problems before the claim was closed the first time.

Adjusting software can never fully help an adjuster in this area because it requires specific knowledge. Would it be a help to many adjusters if the software would have coverage information available? One idea would be when the adjuster entered the policy information, say HO4 was the coverage for the loss, that he or she could click on a button and get a drop down list of what is and is not covered. Of course this would only work with standard policies but in Cat work I would guess most policies would fall into the standard Accord coverage. David this is just a thought because it really would not be much of an effort on the developing side. It would be more like a Help File.
David Bennett
Posted on Friday, January 07, 2000 - 12:31 am:   

There are several association which promote the adjusting profession as a profession. RPA has guidelines, standards and continuing education requirements and tests in order to be able use the RPA (Registered Professional Adjuster) designation. THE LEA Loss Executive Association, PLRB Property Liability Research Bureau, National Forum and of course those states which require adjuster licensing also require continuing education. As for CAT adjusters, we generally work under temporary licences in a CAT situation. However those of us who work direct for some carriers in non cat situations, must have a license and the continuing education to maintain that license.

For those that want, the RPA is a step in the right direction to showing you have are striving for and maintaining the profession of adjusting as that a Profession.

Of course this requires that you know coverage and how it applies. This of course is the biggest knock on CAT Adjusters. The perception is that CAT Adjusters can appraise (most of us) but don't know coverages. To change this reqires individual efforts towards education and committment to the insurance contract. I have read many postings where the adjuster doesn't feel the carrier is doing the right thing. Well the right thing in one's eyes is not necassarily what the contract respond's to.

This is where we can upgrade the perception. Knowledge of the contract and its proper application is the key to being a professional adjuster not just completing an estimate on the damages.
Gale Hawkins
Posted on Thursday, January 06, 2000 - 8:30 pm:   

Storm crow your definition of a profession is good. In a way all licensed adjusters have accepted a disciplinary body if it is possible for an adjuster to have his or her licenses pulled. I realize that few parties get concerned if a bad adjuster is holding a license but it does hurt the rest if anyone and everyone can get and keep a license. It is nothing more than a cash cow for the issuing agency.

Knowledge workers, the buzzword that describes many professions today applies to adjusters. A knowledge worker cares the tools of his trade in his head for the most part. This enables one to be very mobile when compared say to a tire builder at Firestone. There is only a certain number of locations he can do his job in the US where as a knowledge worker knows no bounds for the most part. Hawkins Research is staffed with knowledge workers. Within 24 hours we could move to any location in the 50 states and the only change would be our address. Phone numbers, email and web addresses would all be the same.

The knowledge worker is totally different from a production worker. The knowledge worker has no true boss nor is given detailed accounts as to how to do his job by his employer. Knowledge workers have to be treated more like volunteers than employees since they have the power to walk away at any moment. Knowledge workers DO NOT have to be managed because one only has to have explained to them what the task is that needs to be done and then leave them alone.

Adjusters and ones that prepare taxes are similar in any ways. Many of us know a $300 fee for having our taxes completed may be much cheaper than a $30 fee if they do not understand what they are doing. Just like with adjusters you have those that do taxes year round and continually train and you have others out for some fast money that have taken a crash course and have no depth that comes only with experience.

Carriers know this as well but will never have number of quality adjusters needed in a Cat situation. CADO could help in this area if adjusters decided bring it about. If carriers underpay or overpay the insured the carrier is the loser. To reopen a claim can be very expensive for a carrier and maybe more so than a few points of overpayment. Just like with your taxes the carrier can never be sure if an estimate is correct if an adjuster lacking both training and experience does the estimate. Carriers would think they had died and gone to heaven if they could find all of the trained and experienced adjusters they need for both staff and Cat situations.

There always seems to be more questions raised than there are answers but if enough questions are raised over time the answers will come.
Old Timer
Posted on Thursday, January 06, 2000 - 12:35 pm:   

To answer your question "get real", the same way they are now: either professionally or unprofessionally.
get real
Posted on Thursday, January 06, 2000 - 12:24 pm:   

I guess that means that without spell check and other assistance programs "professionals" would not be perfect. Wonder how an estimate was prepared before computer estimating programs?
Old Timer
Posted on Thursday, January 06, 2000 - 10:01 am:   

OUCH is right. I ran a Spell and GRAMMAR check on my post on MS Word first and mine came out fine.

Grammar is spelled with an A.
Posted on Thursday, January 06, 2000 - 9:31 am:   

Ouch, Old Timer (You might want to do a grammer check).
Old Timer
Posted on Thursday, January 06, 2000 - 7:10 am:   

Yes, and most professionals also know how to spell too.
Posted on Thursday, January 06, 2000 - 1:04 am:   

The true test of a professional is education, standards and a body with the ability to enforce disipline. The Insurance industry and adjusters have rarely fought the training , most of us are happy to learn, or we go back to selling roofs to the elderly.
Standards are less popular (look how many states do not have liscence requirements) but in a hap hazzard way we as the cat adjsuters may stumble onto standards. But then we have the problem of insurers who are prepared to ignore the training if the can pay less for warm bodies.
I am not aware of any area in north amaerica were adjsuters or insurers would accept a disciplinary body! I have many "friends" in the local industry who have never forgiven me becuase I will not recognize them as "professionals"
We do not have the status of engineers or other profesionals (sigh even lawyers shudder) and we have to look at ourselves to ask why.
Meanwhile I am happy to keep learning estimating programs and company guidelines as long as I don't have to buy the "farm".
Gale Hawkins
Posted on Tuesday, January 04, 2000 - 1:38 am:   

Many 2-sided coins in this industry do not seem to get both sides viewed equally. In Cat 101, Holdback $$$$$ and other conversations we see the same vendor labeled devil and saint, generous and a cheat, etc. This has always been a concern of me as a businessman. Almost no one wants to do business with a lying, cheating devil. It is clear that companies that stay around for years are meeting the needs of their customers and employees at some level.

The fact that the individual that stays in this business at any level indicates he or she is of above average intelligence. Testing will prove this fact. All are risk takers all the way from the cat adjuster to the carriers. This requires strong self-esteems. When a group of this type gets together you have problems brewing. When each individual, vendor and carrier feel they are the best and egos take over we all know the results.

Being property adjusting software developers and not having a dog in most fights that sometimes takes place in adjuster-vendor-carrier relationships we may tend to hear a little different story. A neutral third party often hears things about relationships that would never shared between the parties of the relationship. This is only natural because we are conditioned not to show weakness, fear and the like to those we feel are against us.

It is this we/they thing that retards the entire human race. We have to except there are evil forces that appear from time to time that have to be opposed but history shows for every Hitler there will be one or more Churchill’s.

To read some of the post you would think the we/they thing is a major problem in this industry but I can see it is NOT. Yes there are a few intelligent individuals that have not learned it is best to practice self-control but little more.

This industry is like a pressure cooker, it is doing nothing or it is at the point of blowing a gasket. It is this valley/peak issue that tends to create the pressure among the three groups. Carriers have the most to lose in our industry because they have the most to gain. That is just a simple risk/reward relationship. They may be faced with great losses personally or know that their reserves are going to be tapped even if they do not take a major hit directly. This can affect their ratings and their ability to do business in the future. On the other hand if they do not take care of the policyholders they will lose premiums in the future.

This will mean 100% of small to normal losses will be overstaffed because there is NO way to know the actual adjusting needs for several days. Many of you saw this with Floyd. You left for FL only to be redirected to GA only to be redirected to NC and then could not get on location because of damaged roads. I realize this may not be totally facture but you get the point. Let us face it the carrier there first with the most is the happiest. We all have egos remember.

The vendor wants to please the carrier as much as possible and that will always be the case yet they know they can only please the carrier if the adjusters feel they are getting a fair shake. Do vendors over respond? Most certainly they do. Do adjusters over respond? Most certainly they do not. They set at home and wait of vendor to call them the third time before they hit the road. Only the new adjuster without experience is certain he is going to come back a rich person. When I was a kid we had an expression, “It was a water haul.” It meant a wasted trip or effort. The experienced knows it can happen and takes the risk.

Since the vendor seems to take the heat on getting too many adjusters called out it is only naturally they get a lot of attention on the forum. I noticed that the some adjusters had a totally different view of the same vendor between Floyd and Irene this fall. There was several reasons but a big one may have been because the pool of adjusters were low and the loss expectation was also lower since Irene was played down more because if its lower rating. The results were more work for each adjuster that showed up than was the case with Floyd. Some that did not do well in NC left FL with some good checks following them.

Not everyone that sits down to a game of cards comes away with the same mindset that they had at the start of the game. Having realistic expectations at the outset would be the best I am sure but when we know we are the best at what ever we undertake to do I expect we will always be somewhat disappointed that our rewards were not greater.

This is a great industry and the more each group tries to the see the others point of view the less the pressure will be and the higher each parties satisfaction will be. Today it takes all three groups to make things happen. Tension between the groups (we/they) is likely to bring few positive results. Positive tension (competition) with in each group may bring some pain for a few but will move the industry forward in a general sense.

Adjusters need to be competing with one another by studying and getting meaningful certification instead of fighting with the vendor or carrier. If certification does not increase your income it is not meaningful to your family. As a non-adjuster I see your best hope is for a small core of adjusters, because that is the best you can hope for at this point to continue to work to develop CADO into the adjusting organization that can help bring meaningful training and certification to the adjusting industry. Without fail I see a few adjusters with 12 months of experience pull in more money than others with 12 years experience in each storm. The experienced do usually get to stay on the job longer but not always.

If the one-year guy can out earn one with twelve years experience, then is adjusting a profession or only a production job where personality and motor skills are required? What one earns indicates the value of service that one is perceived to be rendering. No profession exists unless its members are willing to fight for the status.

The barber once was the dentist. Is that true today? NO, the barber that wanted more, trained himself and got meaningful laws passed at proved he should be rewarded at a higher level than he was as a barber. If you want a good job carry on as in the past. If you want to be viewed as a professional by the industry why not take the lessons learned from other organizations and seize the opportunity that Roy has worked hard to provide in the form of CADO and set in motion actions that will bring the professional image and benefits that all want. Many of you will have to do the hard work without reaping many benefits just as the forefathers of our country paid a dear price that we may enjoy our life style we have in our country today. No nation permits upward mobility, as does the United States of America.

What are you willing to do today to help see adjusters are viewed and treated as professionals? As an insider of coming technology I am certain if a stake is not driven down in 2000 that technology in the coming years will level the playing field to the point is will be hard to get enough interest in moving the adjusting professional forward as fast as it could today. I realize that many get into adjusting after retiring from another industry and the fight is gone out of you. As an outsider it is easy to a greater potential for adjusters as a whole perhaps. You know how Dave and others have offered to help put into action a plan for the future. There is no perfect plan but that can develop over time. It is 2000 now and change will never be easier than today. The vendors and carriers both need for you to take the effort to make yourselves more valuable to the industry. No one will do for you what you are not willing to do for yourself. All will agree if the adjusting profession is not moving forward it is slipping backwards. What is your thought of an outsider’s thoughts?

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