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JimF
USA
1014 Posts |
 Posted - 02/17/2003 : 09:47:54
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Since most adjusters are at home watching the Weather Channel and getting more and more ornery by the day, here is a topic thread where everyone can share their opinion or vent their anger at those mean old tightwad Scrooge-like vendors.
The 60-40 split. Are we paid too much? Too little? Or just about right? |
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mshort68
USA
138 Posts |
Posted - 02/17/2003 : 10:00:53
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| I don't know anyone who gets less than 65. I know alot that get 70. Just the price of doing business. Can't wait to get some of the 65 which will be plenty for me. I'm not greedy, just want some of the pie. |
The grass is always greener on the other side, but it still has to be mowed! |
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JimF
USA
1014 Posts |
Posted - 02/17/2003 : 10:05:07
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I know some adjusters who get as much as 85% to 90% and some who get as little as 50%.
You bring up a good point and perhaps others may want to comment on what they are seeing and hearing out there regarding the highs and lows of percentage which vendors pay. |
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mshort68
USA
138 Posts |
Posted - 02/17/2003 : 10:06:43
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| Whomever gets 85 to 90 is in the house. Don't know anyone like that yet. I've heard some that hired on as trainees that got 50 to 55. That is really unfair, but they signed the contract. |
The grass is always greener on the other side, but it still has to be mowed! |
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rugg
Canada
14 Posts |
Posted - 02/17/2003 : 10:09:38
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Well in my humble opinion I would think that 65 - 35 would be a bit more resonable. Having worked both sides I understand that the 35 or 40 is necessary in order to provide all the admin required in order to run things effectively. Most can do very well at 65.
As long as it stays at 60 + we will do just fine. |
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JimF
USA
1014 Posts |
Posted - 02/17/2003 : 10:14:23
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One of the reasons I posted this new thread, was partially to help newer adjusters to "Know Before They Go" and in response to the following unedited email which I received this morning from a newer adjuster:
Jim, if you don't like 60/40, try the 50/50 I signed up for without knowing the difference when I first started IA. A true rude awakening. |
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CCarr
Canada
1200 Posts |
Posted - 02/17/2003 : 10:19:45
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| Reg, hope you are enjoying a chinook. However, regarding your comment on 'admin', I do not believe 35% or 40% "is necessary in order to provide all the admin required in order to run things effectively". |
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rugg
Canada
14 Posts |
Posted - 02/17/2003 : 10:54:26
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Oh how I wish that I could enjoy a chinook, but alas I'm in Ottawa at the moment. although staying inside by the fire is not so bad. As to your comment regarding "Admin" there is nothing wrong with the contact company making a healthy profit as long as I receive my share.
Question what is fair. |
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Darryl
USA
36 Posts |
Posted - 02/17/2003 : 11:05:24
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| Not trying to justify just adding some additional information. 65-35 also covers, liability insurance, E&O insurance, bonding, WC insurance along with the aforementioned administrative costs. |
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CCarr
Canada
1200 Posts |
Posted - 02/17/2003 : 11:29:52
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A discussion of OH&P 'redux', regarding a vendor; interesting.
This is just a guess, but probably fairly close - if the vendor has / provides / supplies - liability, E&O, WC, and bonding insurances - that cost is likely on average 5% per $1000 of gross vendor billing per projected annual billings; and I do recognize that some of these insurance burden costs are fixed and continuing, other than perhaps E&O provided to the independent contractors at cost when they are deployed.
Next is 'administrative costs', there is likely a wide and varying defintion of this, and again a portion of it fixed; regardless of a carrier or carriers utilizing a vendor 3 or 5 or 10 times a year for storm work. But, would that / should that amount to 10% overall per $1000 of gross vendor billing?
I don't begrudge a vendor a pure 10% profit per $1000 of gross vendor billing.
So, I'm at 25% now, again my figures are not exact, but there is still a lot of room for the other 10% to 15%, that is under a rock somewhere.
Is this the correct way to reflect on a 60/40 or 65/35, or 70/30 split? |
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Dadx9
USA
143 Posts |
Posted - 02/17/2003 : 12:10:23
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I believe 65-70% has been the norm, in the past.
I have worked for 60% many times in the past. For that percentage, I believe the following are a few things one should expect in return.
1. Consistent payment (not get paid when the vendor gets paid). For 60% you shouldn't have to fund the vendor.
2. Electronic transfer. or
3. Vendor prints the claims on their equipment.
60% is not unreasonable if you get something in return. To me the most important is the consistent pay. Weekly, Bi-weekly or even monthly, as long as "you know before you go." |
Don
"To be held in the heart of a friend is to be a king."
Bruce Cockburn |
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Newt
USA
657 Posts |
Posted - 02/17/2003 : 12:17:55
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| Not all vendors provide the same IA services, E&O etc.thats the reason for Jim's "KNOW BEFORE YOU GO" phrase. I haven't worked for any of them yet, so I'm not sure except for a few, there is a difference. You will probably here from the better ones because they are spending for admin, ins and training. Darryl works for one of the better ones. They provide a lot of training and Insurance. |
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Gale
USA
231 Posts |
Posted - 02/17/2003 : 20:23:38
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| If 50/50 would open the door for a new adjuster would it not be better to work a storm at 50% of something than 100% of nothing. Some vendors charge cash up front to train new adjusters and the new adjuster may never get called out. Jim do you think a new adjuster will be so much slower than an adjuster like you that they just could not pay expenses at 50/50? |
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mshort68
USA
138 Posts |
Posted - 02/17/2003 : 20:28:30
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| Personally, I think a new adjuster should get paid like the rest. He will not be pumping out the #'s like others, but his effort will probably be greater. |
The grass is always greener on the other side, but it still has to be mowed! |
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canduss
USA
120 Posts |
Posted - 02/17/2003 : 20:56:47
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| 60/40 is too little......75/25 should be the norm for 1099 vendors...especially if they would like to encourage a loyal following doing anything and everything at any given time. |
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CCarr
Canada
1200 Posts |
Posted - 02/17/2003 : 21:27:02
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If a new adjuster and a responsible vendor made a 50/50 agreement, there are a number of reasons why the new adjuster would not likely break even on a storm deployment. If the allotment of files to deployed and experienced adjusters is 50 files, the responsible vendor could not / would not give the new adjuster more than 20 to 25 files. The allotment of an average number of files is based on average expectations of closing periods, from the 1st file to the 50th. The new adjuster is going to be slower than the average time line, because if each step is done conscientiously by the new adjuster; that person will learn the hard way regarding organization, planning, and all the little steps along the way that he must become acquainted with and adapt to. Therefore, there is a much higher likelyhood of the new adjuster closing his 25th file parallel to the experienced adjuster closing their 50th.
Therefore, the new adjuster billed 50% less files, at 15% less 'commission', plus the files on average are probably smaller losses so there is likely another 10% reduction in billing. All this adds up to a lot less than the experienced person billing 50 files; while both incurred about the same expenses.
I do not think the new adjuster should get the same compensation level as an experienced adjuster. I fail to see any logic in that approach, and if I was a vendor, I would have 'a scale of splits'; and would use it to my corporate advantage. That 'advantage' includes - attracting the people I want to work a specific storm, knowing I have acquired a good mix of adjusters to handle files; according to the specific type of storm the carrier engaged my company to handle.
I don't know of any other sector in the insurance industry that provides equal pay to new people at the job versus experienced, trained or seasoned people; at the same job. In fact, I can not think of any other industry that provides pay equity (union or otherwise) to new versus experienced and trained people.
The responsible vendor who knowingly engages a new adjuster that has no experience, knows that their time incurred per file with that adjuster will on average be many times that of the trained and experienced adjuster; 'all other things being equal'.
That responsible vendor has little time, and much at risk, when engaging new adjusters during a storm deployment.
We have heard stories in these forums about the 'best of the best' getting 70% or 75%. This is realistic, because the vendor knows the commodity he engaged at that rate, and the expectations are real by the vendor, because that adjuster receiving 70% or 75% has proven their worth; by whatever measure the vendor uses.
Conversely, what is the logic in paying the normal rate of 60% or 65%, to a new and inexperienced adjuster? |
Edited by - CCarr on 02/17/2003 21:29:34 |
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60/40 Too Much, Too Little or Just Right?
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