To borrow from a popular phrase, it can be said that when "the going gets tough, the tough get creative". Consolidations, mergers, and an aging workforce are all conspiring to bring major challenges to the workers’ compensation marketplace over the next few years. The latter of these, the aging workforce, combined with the general absence of new entrants to the adjusting field, could be the largest force of change with which we will need to contend. A recent article in Claims Magazine disclosed a projection that the "insurance industry can expect a deficit of 84,000 adjusters by 2014". That is where the "going gets tough".

Certainly technology will step in to fill some of the void. Intelligent software, forms automation and portability will ensure that those remaining in the trenches can “shovel more” than their predecessors. Their workloads and efficiency will be unprecedented. But technology alone cannot counter such an incredible drain of talent from the work pool. So what is the creative company to do?

Recently, in discussions with some key industry insiders, it came to my attention that a few larger players in the workers compensation industry are considering outsourcing entire claims processes offshore. While certain services within the industry have been outsourced for years, the shifting of entire claims files, and their subsequent management overseas, would, to the best of my knowledge, be unprecedented. Certainly the same technological advances mentioned earlier make this type of change possible, but is it the best for the industry, and the stakeholders that it serves? And are there other alternatives available?

A move to India or a host of other possible countries would provide dramatic labor cost savings, and give access to a well trained and educated labor force that would technically be up to the task. However, the ability of an offshore adjuster to possess the understanding – the "nuance" if you will – to properly manage an injury claim here in the USA still remains to be seen. A career workers' comp person recently lamented to me that "adjusters don't write checks on the hood of a car anymore". They were referring to the days when adjusters often met the person whose claim they were managing, and had the ability to read situations and settle claims in a manner not employed today. In a claims industry that has gradually moved away from gut instinct in favor of centralization and standardized procedures, is a move to offshore just one step too far? With a lack of general understanding of our society and culture, those labor savings could be offset by higher claims expenses and settlements.

In addition to cultural differences, there is the ever present risk of communication issues hampering claims efforts. I am reluctant to point this out, but many of us at one time or another have found ourselves on the phone with an individual in another land who was very difficult to understand. While that might have been frustrating while trying to get help with our computer or toaster oven, can you imagine enduring that issue when your prescriptions have been denied, or you are looking for information on an employee's return to work status? These are issues that must be considered in such an important shift in operations.

I do not criticize these companies for weighing offshore claims outsourcing as an option. I respect the position they are in, and understand that solutions must be found. This is an issue that will no doubt generate much debate within the industry. I encourage your comments to this topic, as it is an area that may have profound impact on the way we do business in the future. 

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