Finding workers has been a challenge for nearly every industry in recent years, but finding skilled workers who actually want a career in insurance has been especially hard. As experienced adjusters and claims professionals retire, the talent gap threatens to widen further. The good news: modern claims management software and smart claims technology can help carriers, TPAs, and independent adjusting firms absorb the impact of staffing shortages without sacrificing service quality.
In this article, we’ll look at why the insurance labor market is under pressure, how understaffing drives burnout and turnover, and, most importantly, how a modern claims management system breaks that cycle.
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 shows the number of unincorporated self-employed workers has grown 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 an interview with WGLT, one analyst noted that total insurance carrier employment sits around 1.56 million, down 85,000 from two years prior. Carriers are actively hiring, but they can’t keep pace with attrition.
Insurance can be a genuinely rewarding career: the work is intellectually engaging, often well-compensated, and doesn’t always require an expensive four-year degree. Still, as this Forbes article explains, younger generations haven’t 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’s short-staffed. The claim volume doesn’t shrink just because headcount did; it means 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 best, 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, costs that a modernized claims management system can help offset by shortening ramp-up time and standardizing workflows from day one.
How Smart Claims Technology Helps Understaffed Teams
Insurance companies are understaffed, but the right technology addresses the problem in three critical ways:
- It helps teams manage with fewer people. Technology won’t replace human adjusters (claims work is complex, and some tasks genuinely need a human touch), but when a claims management system automates the repetitive, low-value work, total workload per employee drops.
- It frees adjusters to focus on what matters. Manual data entry, status updates, and routine correspondence eat up hours that could go toward complex coverage questions, negotiations, or customer service. Tools like FNOL software and claim tracking software 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 article referenced above cited a Hartford study in which many Millennials said insurance felt “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 story entirely.
Where Smart Technology Fits in the Claims Process
An article from Insurance News Net shows how AI tools are already helping contact center staff manage stress and improve outcomes. The same principle applies directly to claims handling.
The claims process is a prime candidate for automation because so much of it is repetitive and rules-based:
- First Notice of Loss (FNOL): Digital intake through FNOL software captures claim details instantly and routes them to the right adjuster without manual triage.
- Claim tracking and status updates: Claim tracking software keeps claimants informed automatically, cutting down on “what’s the status of my claim?” calls.
- Payments: Digital claims payments eliminate paper checks and manual disbursement steps, speeding up settlement and reducing administrative overhead.
- Field and mobile work: Mobile claims management tools let adjusters document, photograph, and update claims from the field instead of returning to the office to do data entry.
- AI-assisted review: Purpose-built AI for claims can flag anomalies, summarize files, and surface next steps, giving adjusters a head start rather than a blank page.
Better claims management software isn’t a future promise. It’s already helping carriers, TPAs, independent adjusting firms, and self-insured programs handle more claims with leaner teams.
Who Benefits Most from Smart Claims Technology
Staffing pressure looks a little different depending on the type of organization:
- Independent adjusting (IA) firms juggling variable claim volume benefit from claims software built for IA firmsthat scales up during CAT events without a hiring spree.
- Third-party administrators (TPAs) managing claims on behalf of multiple clients rely on a TPA claims management system to keep every program running consistently, even short-staffed.
- Carriers looking to protect loss ratios and service levels can lean on a carrier claims management system to standardize workflows across lines of business.
- Self-insured organizations without large in-house claims teams can use self-insurance management software to run claims operations lean, without adding headcount.
- Enterprise claims operations juggling high claim volume and complex reporting requirements can scale using enterprise claims management software built to handle volume without proportional staff growth.
The Bottom Line
Insurance staffing shortages aren’t going away soon, but they don’t have to translate into burnout, backlogs, and lost business. A modern claims management system lets understaffed teams absorb claim volume, keep claimants satisfied, and give adjusters room to focus on the work that actually requires their expertise.
Want to see how much smart claims technology could change your claims process? Request a demo or explore our full claims management software platform to see what’s possible.
