MetLife Poll: Claims Adjusters Seek More Training on Structured Settlements

Nearly 88 percent of claims professionals are familiar with the benefits of structured settlements for personal physical injury clients and 84 percent view them as a prudent recommendation, especially when a minor is involved, according to MetLife’s 2022 Structured Settlements Poll. However, 58 percent say more structured settlements training from either structured settlements annuity providers or structured settlements brokers/consultants is needed.

With a structured settlement – a voluntary agreement between the injury claimant and the defendant and, when necessary, approved by the presiding judge – the injury claimant does not receive compensation for his or her injuries in one lump sum. Rather, they receive a stream of tax-free payments – either for a certain period of time or for the rest of the individual’s life – from a life insurance company.

“Claims professionals understand the risk of claimants potentially spending funds too quickly and the role structured settlements play to ensure that money will not run out when claimants need it most,” said Mari Hioki, vice president and head of Structured Settlements with MetLife. “In fact, 76 percent of claims professionals say they would be likely to use a structured settlement if they were a personal injury claimant.”

Claims Professionals Play Important Role in Structured Settlement Decisions

If a claimant takes a lump sum, they may lack the financial sophistication to ensure the funds last as long as they may need them and potentially run the risk of spending the money too rapidly. This is a concern for claims professionals – the Poll found half of claims professionals (49 percent) are concerned that a claimant will deplete their personal physical injury settlement award too quickly, regardless of the size of the claim.

As a result of these concerns, claims professionals believe they are the ones most likely to introduce the idea of structured settlements, with 44 percent of respondents reporting this. Twenty-four percent believe that defense counsel introduces the idea, followed by claims supervisors or someone else, at 12 percent respectively, and 8 percent believe plaintiff counsel plays this role.

The biggest obstacles to using a structured settlement are a preference for a lump sum and a lack of agreement by the plaintiff’s attorney. According to the claims professionals surveyed, current interest rates, which are sometimes cited as a reason for not structuring a settlement, appear to have minimal impact.

Brokers Play an Important Role in Demonstrating the Value of Structured Settlements

Claims professionals (90 percent) overwhelmingly believe that structured settlement brokers/consultants play an important role in positioning the value of a structured settlement and/or helping to calculate the cost of a personal physical injury claimant’s medical care, basic living expenses and family needs.

More than half (58 percent) of claims professionals would like additional training to further develop their knowledge of structured settlements. They are evenly split on whether they would prefer structured settlements annuity providers (48 percent) or structured settlements brokers/consultants (48 percent) to provide it.

The first step to address this demand may be more proactive outreach. An important opportunity exists for brokers and consultants to increase the frequency with which they contact claims professionals. According to the poll, only 22 percent of claims professionals are contacted by a structured settlement broker/consultant once a month or more, 38 percent hear from brokers less than once a month and 40 percent of claims professionals say they never receive a call or email from a structured settlement broker/consultant.

“Claims professionals are looking to brokers, consultants and insurance companies for their knowledge and experience to help them better understand structured settlements and identify claims that could be structured,” said Hioki. “This knowledge and expertise can enable them to successfully position structured settlement solutions with their clients, and ensures proceeds due to personal injury claimants are not depleted too quickly.”

About the Study

The MetLife 2022 Structured Settlements Poll was fielded between April 21 and June 13. MetLife commissioned MMR Research Associates, Inc. to conduct the telephone survey of claims professionals. Survey responses were received from 50 claims adjusters, claims managers, directors/vice presidents of claims and other claims handlers, the majority of whom had a high level of familiarity with structured settlements.