I run an insurance inspection company AND a company that develops apps for inspections.
Yesterday was one of those days! Every email from one of our inspectors was:
- I want more money to do this inspection
- My car got smashed while parked on the street, I am out for 2 weeks
- I got (medical emergency) and cannot work for 1 month
- I am going to South Carolina for the winter
- I won’t do those inspections for that amount
Thankfully, most days are not like that! However, the positive things are starting to get edged out more and more!
Inspection Metrics
Field Inspections have always been evaluated by three things:
- Quality
- Price
- Timeliness (30 days or better)
Without those table settings, you cannot deliver inspections on time.
That is when your carriers start to yell…at you!
Why There Are No Inspectors Available
So yesterday really made me question where things are going. I thought about the recent headlines
- The Great Resignation
- The impact of insurance people ageing out
- COVID era impacts on the workforce
- Rising Costs…especially gas
- Availability of new cars
- Omicron
- New York state of emergency
It is not rocket science to deduce that the environment for getting inspectors is not improving, it is getting worse.
12 to 1 Ratio of Applications to Get a Viable Inspector
This year, we marketed our inspector positions in 4 states and tracked 357 applications. We onboarded 76. That netted us 28 active new inspectors as of today.
It typically takes 3 months to get a normal inspector productive. Some are faster, some are slower. So when we get a rash of reps dropping out, we have a problem.
In a lot of areas, we may only have 2 reps in place. When one drops out…that is thin ice.
When you run an ad for a new rep, say in Harrisburg, PA, and get zero responses…over and over, it is very worrisome.
Vendor Options to Inspector Shortage
That sometimes drives us to consider:
- Lower standards (can they at least take a picture; we can fix it in QA?)
- Re-try someone who did not work out before
- Rely on virtual property intelligence like HazardHub and Betterview
- Overload a current rep and hope for the best
- Import a distant rep (very expensive)
- Use self-service inspections where possible
- Pay reps more. Difficult to do on decreasing inspection rates
- Be hiring every day!
And this is just not for our inspection company. I hear the same thing from our friendly competitor loss control companies.
How to Fix the Inspection Supply Chain Problem
This all creates an issue of a compromised supply chain for inspections. In my opinion, here are the options on the table for Carriers:
Option 1
Not doing inspections. Save money on the front end. Probably impacts loss ratio on the back end.
Option 2
Be prepared to pay more for inspections. This will help with inspector availability and retention. We are having to raise prices and often it is more than the standard 3-5% hike. It does not really do a lot to improve the supply chain though.
Option 3
Virtual “inspections” with solutions like HazardHub and Betterview. Great place to start, then the choice point is, what is the next step…. option 4, 5 or a field inspection?
Option 4
Self-Service inspections. Get over the idea that you miss a lot with DIY inspections. You don’t. And if you do, follow up on the outliers with a field inspection. There are more choices for self-service today:
- Invitation based-Pure Self-Service
- Guided Engagement where a service rep connects with policyholder
- Guided with interview gets you an interior survey with a complete interview
Option 5
Remote inspections. Video sharing technology lets your desk inspector walk thru the risk thru the smartphone of the policyholder. Get ready to spend an hour watching “home” video. Still have to create some kind of report too.
Option 6
No change. Stick with field inspections only.
So, What’s It Going To Be?
Some carriers, MGA’s and agencies are looking at how to enhance availability of quality underwriting information AND they are thinking outside the box. 2022 is the time to address this growing problem.