How Smart Claims Technology Helps Teams Under Staffing Pressure

Finding workers has been a challenge for nearly every industry in recent years, but finding skilled workers who want a career in insurance has been especially hard. As experienced adjusters and claims professionals retire, the talent gap threatens to widen further. Modern claims management software will not hire anyone, but it can change how much manual work a claim takes, which is the part of the problem a claims operation actually controls.

This article looks at why the insurance labor market is under pressure, how understaffing drives burnout and turnover, and what a modern claims management system can and cannot do about it.

Labor shortages since the pandemic

As businesses reopened after pandemic closures, many struggled to find and retain workers. The Great Resignation saw employees quit in search of better opportunities. Others left the workforce entirely due to caregiving responsibilities or started their own businesses.

According to SHRM, U.S. Labor Department data showed the number of unincorporated self-employed workers growing by more than 500,000 since the pandemic began.

Regardless of the reasons workers left, the result is the same: short-staffed employers stuck trying to do more with less.

The impact on the insurance industry

Retail and hospitality have gotten most of the headlines about turnover, but the insurance industry has felt it too.

In a 2022 interview with the public radio station WGLT, an analyst put total insurance carrier employment at around 1.56 million, down 85,000 from two years earlier. Carriers were actively hiring, but could not keep pace with attrition.

Insurance can be a genuinely rewarding career: the work is intellectually engaging, often well compensated, and does not always require an expensive four-year degree. Still, as Forbes has reported, younger generations have not historically been drawn to the industry. That makes replacing retiring adjusters and claims staff an uphill battle, one that compounds every year unless carriers change how the work itself gets done.

Burned-out workers are more likely to quit

Picture a claims team that is short-staffed. The claim volume does not shrink just because the team did, so each remaining adjuster absorbs a heavier caseload. Heavier caseloads lead to frustration, burnout, and eventually more resignations. That leaves the remaining team with even more work, and the cycle repeats. CNBC has described this exact feedback loop as one of the reasons the Great Resignation kept accelerating.

Burnout is a real, measurable risk, and staffing shortages make it worse. Pushing your most experienced and most loyal adjusters to the breaking point often backfires.

Turnover is also expensive. Even when a company successfully hires a replacement, recruiting, onboarding, and training a new claims professional carries real, ongoing costs.

Software will not make that hiring easier, but it can shorten the runway once someone is hired. In VCA, file handlers typically need 30 to 60 minutes of training, so a new adjuster spends their first week on claims rather than on the system. The implementation approach is built around the same idea.

What claims technology can honestly do for an understaffed team

Technology does not replace claims professionals, and it does not decide what a claims operation should be staffed at. What it changes is the amount of low-value work sitting between an adjuster and the decision only they can make.

It reduces the manual work each file carries. Claims work is complex, and much of it genuinely needs a person. But when a claims management system automates the repetitive, rules-based steps, the work per file drops and the remaining work is the work that needed judgment in the first place.

It frees adjusters to focus on what matters. Manual data entry, status updates, and routine correspondence eat hours that could go toward complex coverage questions, negotiations, or customer service. Structured intake and claim tracking shift the tedious work off adjusters' plates so they can spend their time where it counts.

It helps attract a new generation of workers. The Forbes reporting cited above referenced a Hartford study in which many Millennials described insurance as boring. Young professionals may not be excited about insurance as an industry, but tech-forward roles built around modern software, rather than paper files and legacy systems, are a different proposition.

Where smart technology fits in the claims process

Insurance News Net has reported on how AI tools are already helping contact center staff manage stress and improve outcomes. The same principle applies to claims handling.

The claims process is a strong candidate for automation because so much of it is repetitive and rules-based:

• First notice of loss (FNOL). Digital intake captures claim details instantly and routes them to the right adjuster without manual triage.
• Claim tracking and status updates. Automated updates keep claimants informed, cutting down on "what is the status of my claim?" calls.
• Payments. Digital claims payments remove paper checks and manual disbursement steps, speeding up settlement and reducing administrative overhead.
• Field and mobile work. Mobile tools let adjusters document, photograph, and update claims from the field instead of returning to the office to do data entry.
• AI-assisted review. AI built for claims can flag anomalies, summarize files, and surface next steps, giving adjusters a head start rather than a blank page.

None of that is a future promise. It is the ordinary shape of a claims platform that was designed around how claims actually move.

Who feels staffing pressure most

Staffing pressure looks a little different depending on the type of organization:

• Independent adjusting firms handling variable claim volume need a system that absorbs a catastrophe surge without a matching surge in manual steps per file.
• Third-party administrators managing claims on behalf of multiple clients rely on configurable workflows to keep every program running consistently, even when the team is stretched.
• Carriers protecting loss ratios and service levels use standardized workflows across lines of business so quality does not depend on who happens to pick up the file.
• Self-insured organizations and captives without large in-house claims teams need the workflow structure and reporting that a lean operation cannot assemble by hand.

Frequently asked questions

How does understaffing lead to turnover in claims teams?

Claim volume does not shrink when a team does, so each remaining adjuster absorbs a heavier caseload. Heavier caseloads lead to frustration, burnout, and eventually more resignations, which leaves the remaining team with even more work and repeats the cycle. Turnover is also expensive, because recruiting, onboarding, and training a replacement carries real, ongoing costs.

Can claims technology solve a staffing shortage?

Technology does not replace claims professionals or decide what an operation should be staffed at. What it changes is the amount of low-value work between an adjuster and the decision only they can make. Automating repetitive, rules-based steps such as manual data entry, status updates, and routine correspondence reduces the work per file and frees adjusters for coverage questions, negotiations, and customer service.

Which parts of the claims process suit automation?

The strongest candidates are the repetitive, rules-based steps. Digital FNOL intake captures claim details and routes them to the right adjuster, automated status updates cut down on status calls, and digital payments remove paper checks and manual disbursement steps. Mobile tools let adjusters document, photograph, and update claims from the field, and AI-assisted review can flag anomalies, summarize files, and surface next steps.

The bottom line

Insurance staffing shortages are not going away soon, but they do not have to translate into burnout, backlogs, and lost business. A modern claims management system lets a stretched team absorb claim volume, keep claimants informed, and give adjusters room to focus on the work that actually requires their expertise.

Want to see what that looks like against your own claim flow? Request a demo.