East Insurance Employment: Hiring Is ‘Slightly Elevated’ in 2012

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The insurance employment market in the East and Northeast regions — as in most other parts of the country — can be summed up the following way: hiring is “slightly elevated” compared to last year, but there is still a long, long way to go.

On the positive side, there is some optimism building in the insurance community that the nation’s economy is finally making a strong recovery. Gradually firming premium rates are also providing hope.

Liberty Mutual is one of the companies with growing optimism. The Boston-headquartered insurer posted more than 500 U.S. job openings on its corporate website. Nearly half of those vacancies are in Massachusetts. However, it’s not easy to land these jobs. The company says it gets thousands of applications every month.

The company says that for the overall P/C insurance industry, “it seems hiring is slightly elevated in 2012 versus last year.” Shawn Tubman, manager of corporate employment, observed that in some functions, like within IT and distribution, there is now some serious competition to attract talent among companies.

Tubman also said he’s seeing increased competition for underwriting in the commercial market space as well as for claims professionals. “I would say across the board, hiring seems to be slightly elevated within the industry.”

“As companies are starting to hire again, there is an indication that the competition for best candidates will heat up,” he said. “We are always on the lookout for talent.”

He said Liberty Mutual has been seeing a bump-up in temp hiring in the industry, a trend that often precedes more full-time staff hiring.

Another trend in the job market, according to the Liberty Mutual executive, is the increasing importance of social media tools — especially professional social network LinkedIn.

“At Liberty Mutual, we see candidates coming to us directly and engaging us through a variety of social media vehicles,” Tubman said. “Social media has given candidates a good avenue to connect directly with the company. That’s really different from years past.”

The Graham Co., an insurance and employee benefits brokerage firm in Philadelphia, said it plans to hire several more employees soon. “We are primarily going to hire five new sales people, and at least five professional support people — account managers and claims consultants. Plus, we’re adding administrative support personnel,” said Mike Mitchell, vice chairman. His firm currently has around 150 full-time employees.

But he said it could still be a while before hiring in the brokerage and agency sector really picks up.

“For the most part, I still don’t see a lot of hiring,” Mitchell said. “The majority of hiring I see is to replace people who are leaving. It’s not to increase headcount.”

He said the industry is hoping to grow its top line revenue this year, primarily because the industry is now seeing some increases in premiums. “But I have not yet seen that expectation of revenue growth translate into more hiring.”

“I don’t think the insurance industry is quite ready to believe that the economy has turned around and that there is going to be more growth and profitability,” Mitchell said. “The insurance industry has not been very profitable. A lot of major companies, especially public companies, probably want to see results first. And then from there, perhaps they will add more people.”

And even firms with improving financial results are not in a hurry to hire more people, because many have gotten used to doing more with less during the downturn. “Firms are not that willing to quickly add more bodies, in the environment we are in right now,” Mitchell observed.

“There are certainly signs of recovery but still people just aren’t sure. I don’t think it’s getting any worse. We are not seeing layoffs anymore. I think things have stabilized in that regard.”

Here is one sign that the economy is still far from healthy: a surplus of job applicants with decades of professional experience, even from other, unrelated businesses. In recent weeks, The Graham Co. narrowed its overflowing files of job applicants down to 30 top candidates for 10 available professional positions. Among those remaining candidates, about 10 of them were practicing attorneys. “There must be something going on in the world of law that I guess is not very appealing. I can’t explain that,” he said.

Woodbury, N.Y.,-based brokerage firm Sterling & Sterling agreed that it will take more time before hiring picks up steam.

Many of the larger brokers are still hesitant to hire, according to David Sterling, the firm’s CEO. “Because if you look at large, national brokers, they are publicly owned or owned by hedge-fund investors who want stronger earnings. It’s hard to hire in an environment when revenues have been flat to down.”

Sterling said he, like many other brokers, is “very open” to someone coming to the firm in a production capacity. “The advice for job seekers out there is that in insurance, there is always opening for sales. The thing with sales positions is that typically, best salespeople are predominantly performance-compensated.”

He said it’s been a zero-sum game for the entire universe of insurance brokerages over the last two years. “In other words, premium dollars were flat to down over the last two years. The only way for some people to do additional hiring was by taking businesses away from other brokers.”

“We see rates firming but we still have a majority of the premiums staying flat. We have some premiums going up in difficult classes such as construction in New York metropolitan area,” Sterling said.

At the Independent Insurance Agents and Brokers of America, there are also signs that the job market is improving, albeit slowly.

Diane Mattis, associate vice president of professional development, said she’s been noticing this year an uptick in the number of job posted on the group’s job board. “I would say about 40 percent of those are account manager positions,” she said. The website currently lists more than 100 open jobs.

Among medium-sized agencies, about two-thirds are hiring new producers. Among smaller agencies, between a quarter and a half of them are now hiring new producers, according to Mattis. “So we are starting to see an uptick this year.”

Todd Mitchell, a recruiter in New York, is also seeing an uptick, but so far, just barely.

“Compared to previous years, it’s better, but it’s still pretty flat,” said Mitchell, who runs a P/C insurance recruiting firm, Todd Mitchell Associates, in New Hyde Park, N.Y.

“There is always a market for a producer on the broker side,” he said. “If a broker can bring a book of business, any prudent CEO would be happy to hire that person.” On the services side, with the processing and clerical production, “there is no growth at all in that area,” he said.

Mitchell said areas with noticeably more hiring in 2012 include analytics at insurance companies, predictive modeling and strategic planning.

A recent survey by Insurance Journal confirms what many industry executives are seeing — many agencies are watching their budgets and have no plans to expand their staff, at least in 2012.

Insurance Journal, in its 2012 agency salary survey, recently asked agency owners about their hiring plans for the year. In five major Northeastern states, (Connecticut, Massachusetts, New Jersey, New York and Pennsylvania) 67 percent of 143 respondents said they plan to maintain their current staff size. Only 24 percent said they plan to increase their staff size. Also, 9 percent said they anticipate laying off some people in 2012.

Respondents from Pennsylvania had the most bullish hiring plans, with more than 40 percent saying they will hire more workers in 2012. In contrast, only 13 percent of the respondents in Massachusetts said they plan to hire more in 2012.

West Coast Farmers Expands East

Farmers Insurance is a household name on the West Coast. But on the East Coast? Not so much. The 85-year-old insurer wants to change that, with a big expansion plan east of the Mississippi.

“We are the third-largest P/C insurer in the U.S.,” said Dennis Lusk, the company’s director of Farmers AgencyPoint facility in Cherry Hill, N.J. The office opened its doors in October 2011.

“We achieved that even though we weren’t truly a nationwide company at the time. We were a regional company, available to consumers in only 29 states. Now we have an assertive East Coast expansion program underway to make our products and services available practically nationwide,” Lusk said.

The Cherry Hill, N.J., office plans to recruit, train and performance-manage 105 new agency owners every year for next few years, as exclusive Farmers agents.

“We house them in our facility for 12 months and then they go back out into their communities to establish their own storefront office,” he said.

“It’s my mission to appoint approximately 300 Farmers exclusive agents in central and southern Jersey in the next few years. I have a counterpart in Parsippany, N.J., that is doing the same thing in the northern half of the state as well.”

The new large-scale, recruiting-and-training platform plan is to get East Coast states including New Jersey, Pennsylvania and Maryland up as quickly as possible to the size of the company’s traditional model states such as Missouri and Oklahoma.

“We are bringing jobs and opportunities to the East Coast,” said Lusk.

“When our agents finish their 12-month program and go back out to their community, they are going to have staffing needs as well in their offices such as office managers, agency producers and customer service representatives. This translates into hundreds of new job opportunities per year.”

Employment prospects vary greatly by employer, region and job specialty. For a closer look, Insurance Journal editors interviewed property/casualty industry leaders in their respective regions and will be filing the following reports this week: