Claims Adjusters, Appraisers, Examiners, and Investigators
Claims adjusters, appraisers, examiners, and investigators evaluate insurance claims. They decide whether an insurance company must pay a claim, and if so, how much.
Claims adjusters, appraisers, examiners, and investigators typically do the following:
- Investigate, evaluate, and settle insurance claims
- Determine whether the insurance policy covers the loss claimed
- Decide the appropriate amount the insurance company should pay
- Ensure that claims are not fraudulent
- Contact claimants’ doctors or employers to get additional information on questionable claims
- Confer with legal counsel on claims when needed
- Keep claims files, such as records of settled claims and an inventory of claims requiring detailed analysis
- Negotiate settlements
- Authorize payments
What insurance adjusters, examiners, and investigators do varies by the type of insurance company they work for. They must know a lot about what their company insures. For example, workers in property and casualty insurance must know housing and construction costs to properly evaluate damage from floods or fires. Workers in health insurance must be able to determine which types of treatments are medically necessary and which are questionable.
Some claims adjusters work as self-employed public adjusters.
Often, they are hired by claimants who prefer not to rely on the insurance company’s adjuster. The goal of adjusters working for insurance companies is to save as much money for the company as possible. The goal of a public adjuster working for a claimant is to get the highest possible amount paid to the claimant.
Sometimes, self-employed adjusters are hired by insurance companies in place of hiring adjusters as regular employees. In this case, the self-employed adjusters work in the interest of the insurance company.
Adjusters inspect property damage to determine how much the insurance company should pay for the loss. The property they inspect could be a home, a business, or an automobile.
They interview the claimant and witnesses, inspect the property, and do additional research, such as look at police reports. Adjusters may consult with other workers, such as accountants, architects, construction workers, engineers, lawyers, and physicians, who can offer a more expert evaluation of a claim.
They gather information—including photographs and statements, either written or recorded audio or video—and put it in a report that claims examiners use to evaluate the claim. When the examiner approves policyholder's claim, the claims adjuster negotiates with the claimant and settles the claim.
If the claimant contests the outcome of the claim or the settlement, adjusters work with attorneys and expert witnesses to defend the insurer's position.
Appraisers estimate the cost or value of an insured item. Most appraisers who work for insurance companies and independent adjusting firms are auto damage appraisers. They inspect damaged vehicles after an accident and estimate the cost of repairs. This information then goes to the adjuster, who puts the estimated cost of repairs into the settlement.
Claims examiners review claims after they are submitted to ensure that proper guidelines have been followed by claimants and adjusters. They may assist adjusters with complicated claims or when, for example, a natural disaster occurs and the volume of claims increases.
Most claims examiners work for life or health insurance companies. Examiners who work for health insurance companies review health-related claims to see whether the costs are reasonable, given the diagnosis. After they review the claim, they authorize appropriate payment, deny the claim, or refer the claim to an investigator.
Examiners who work for life insurance companies review the causes of death and pay particular attention to accidents, because most life insurance companies pay additional benefits if a death is accidental. Examiners also may review new applications for life insurance policies to make sure the applicants have no serious illnesses that would make them a high risk to insure.
Insurance investigators handle claims in which the company suspects fraudulent or criminal activity such as arson, staged accidents, or unnecessary medical treatments. The severity of insurance fraud cases varies, from claimants overstating vehicle damage to complicated fraud rings. Investigators often do surveillance work. For example, in the case of a fraudulent workers’ compensation claim, an investigator may covertly watch the claimant to see if he or she does activities that would be ruled out by injuries stated in the claim.
Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.
Financial managers typically do the following:
- Prepare financial statements, business activity reports, and forecasts
- Monitor financial details to ensure that legal requirements are met
- Supervise employees who do financial reporting and budgeting
- Review company financial reports and seek ways to reduce costs
- Analyze market trends to find opportunities for expansion or for acquiring other companies
- Help management make financial decisions
The role of the financial manager, particularly in business, is changing in response to technological advances that have significantly reduced the amount of time it takes to produce financial reports. Financial managers’ main responsibility used to be monitoring a company’s finances, but they now do more data analysis and advise senior managers on ideas to maximize profits. They often work on teams, acting as business advisors to top executives.
Financial managers also do tasks that are specific to their organization or industry. For example, government financial managers must be experts on government appropriations and budgeting processes, and healthcare financial managers must know about issues in healthcare finance. Moreover, financial managers must be aware of special tax laws and regulations that affect their industry. For more information on chief financial officers, see the profile on top executives.
The following are examples of types of financial managers:
Controllers direct the preparation of financial reports that summarize and forecast the organization's financial position, such as income statements, balance sheets, and analyses of future earnings or expenses. Controllers also are in charge of preparing special reports required by governmental agencies that regulate businesses. Often, controllers oversee the accounting, audit, and budget departments.
Treasurers and finance officers direct their organization's budgets to meet its financial goals. They oversee the investment of funds. They carry out strategies to raise capital (such as issuing stocks or bonds) to support the firm's expansion. They also develop financial plans for mergers (two companies joining together) and acquisitions (one company buying another).
Credit managers oversee the firm's credit business. They set credit-rating criteria, determine credit ceilings, and monitor the collections of past-due accounts.
Cash managers monitor and control the flow of cash that comes in and goes out of the company to meet the company's business and investment needs. For example, they must project cash flow (amounts coming in and going out) to determine whether the company will not have enough cash and will need a loan or will have more cash than needed and so can invest some of its money.
Risk managers control financial risk by using hedging and other strategies to limit or offset the probability of a financial loss or a company’s exposure to financial uncertainty. Among the risks they try to limit are those due to currency or commodity price changes.
Insurance managers decide how best to limit a company’s losses by obtaining insurance against risks such as the need to make disability payments for an employee who gets hurt on the job and costs imposed by a lawsuit against the company.
Management analysts, often called management consultants, propose ways to improve an organization's efficiency. They advise managers on how to make organizations more profitable through reduced costs and increased revenues.
Management analysts typically do the following:
- Gather and organize information about the problem to be solved or the procedure to be improved
- Interview personnel and conduct on-site observations to determine the methods, equipment, and personnel that will be needed
- Analyze financial and other data, including revenue, expenditure, and employment reports, including, sometimes, building and using sophisticated mathematical models
- Develop solutions or alternative practices
- Recommend new systems, procedures, or organizational changes
- Make recommendations to management through presentations or written reports
- Confer with managers to ensure that the changes are working
Although some management analysts work for the organization that they are analyzing, most work as consultants on a contractual basis.
Whether they are self-employed or part of a large consulting company, the work of a management analyst may vary from project to project. Some projects require a team of consultants, each specializing in one area. In other projects, consultants work independently with the client organization's managers.
Management analysts often specialize in certain areas, such as inventory management or reorganizing corporate structures to eliminate duplicate and nonessential jobs. Some consultants specialize in a specific industry, such as healthcare or telecommunications. In government, management analysts usually specialize by type of agency.
Organizations hire consultants to develop strategies for entering and remaining competitive in the electronic marketplace.
Management analysts who work on contract may write proposals and bid for jobs. Typically, an organization that needs the help of a management analyst solicits proposals from a number of consultants and consulting companies that specialize in the needed work. Those who want the work must then submit a proposal by the deadline that explains how they will do the work, who will do the work, why they are the best consultants to do the work, what the schedule will be, and how much it will cost. The organization that needs the consultants then selects the proposal that best meets its needs and budget.