Insurance Industry Facing Competitive Labor Market

April 1, 2019

Like other industries today, the property/casualty insurance industry is facing a highly competitive job market as it strives to fill positions needed to grow.

The unemployment rate for the insurance industry is 1.7 percent, which continues the trend of virtually non-existent unemployment. This remains way below the national average — reported at 3.9 percent.

Many insurers are trying to hire. More than 60 percent of carriers said in January that they expect to increase hiring this year over last, according to the latest Semi-Annual U.S. Insurance Labor Outlook Study conducted by the insurance recruiting specialist The Jacobson Group and broker Aon.

“Anticipated increase in business volume and expansion into new markets are driving continued hiring,” said Gregory Jacobson, co-chief executive officer of Jacobson. “This organizational growth, coupled with a shallow talent pool and virtually non-existent industry unemployment, results in an increasingly competitive labor market.”

The desired increase in hiring may be a bit exaggerated. “January numbers are typically more optimistic,” said Jeff Rieder, head of the Ward division of Aon, during a webinar on the latest survey results. He said their numbers tend to fall a bit when companies are again asked in July.

But there is little doubt that interest in hiring in insurance remains high.

Part of it is due to more people than expected retiring in 2018, as well as an uptick in turnover, according to Jacobson. The industry turnover rate is typically about 10 percent, but that was up about two points last year for carriers. It typically runs higher for agencies than carriers.

The industry also appears to have pared down in certain areas in 2018 and may now be prepared to restock talent.

Steven Weisbart, chief economist for the Insurance Information Institute (III), looked at Bureau of Labor Statistics (BLS) data and found that for the 12 months ending January 2019, property/casualty carrier employment actually dropped by 12,200 (-2.3 percent) to 519,400. Most of this reduction occurred in the last seven months.

However, the agent/broker segment came close to creating about as many jobs as carriers cut. The agent/broker sector added 11,200 jobs January 2019 over January 2018 (up 1.4 percent) to 828,400. Employment totals in the agent/broker sector had stayed flat at about 650,000 from 2009 to 2013 but have generally been rising since March 2013. Since March 2013, agent/broker employment is up by 170,000 (+32.0 percent), the III’s Weisbart found.

The recent Jacobson Group-Aon study found job vacancies are still moderately difficult to fill. It takes about 49 days to fill a non-exempt position and 97 days to fill an executive position.

While technology is replacing some insurance jobs, Rieder said he thinks this has largely already taken place and there are areas where there are plenty of openings, many having to do with technology.

The need for technology, claims and sales/marketing staff is expected to grow the greatest in the next 12 months. Technology, executive, actuarial and analytics positions are the most difficult for the industry to fill.

Companies are using more temporary staff, and 18 percent of companies plan to increase their use, up from 12 percent in January 2018.

The retiring workforce and tight labor situations are not unique to the insurance industry.

According to a report released in late 2018 by the Manpower Group, Solving the Talent Shortage, 46 percent of U.S. employers say they can’t find people to hire with the skills they need. For large organizations, those with 250 or more employees, the percentage is even higher. Some 58 percent of larger organizations reported talent shortages in 2018.

Around a quarter of the employers surveyed for Manpower’s Talent Shortage report said they just aren’t getting applicants for the jobs they need to fill. And, for 21 percent of employers, the applicants they are getting don’t have the necessary skills.

The top 10 in-demand jobs across the U.S. today, according to the Manpower Group, are skilled trades, drivers, sales representatives, healthcare professionals, teachers, office support, technicians, management/executive, restaurant/hotel staff and manufacturing.

To improve their chances of attracting the candidates they need, companies are exploring new talent pools and different demographics that they might have overlooked before, utilizing both social and traditional media to reach potential candidates, increasing benefits such as more vacation time, and offering more money, according to the Manpower survey.

Topics USA Agencies Talent Training Development Market

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