The result of the Jacobson Group and the Ward Group’s Semi-Annual U.S. Insurance Labor Outlook Study is out. The twice a year study says property and casualty insurers are hiring at the fastest pace in years.
How good is the news? The Ward Group’s Jeff Rieder said 66% of the P&C insurers polled said they’re going to increase staff in 2015. It’s the highest percentage since the two groups started the survey in 2009.
The focus of the hiring will be specialty commercial lines underwriters and claims professionals.
The Jacobson Group CEO Greg Jacobson said, “We’re seeing the hottest P/C market since before the recession as companies are doing everything they can to add to staff in order to support their anticipated or actual growth.”
A year ago — Jacobson noted — 62% said they planned to add staff. And in 2014 the companies that actually did hire doubled the number they planned to hire. That’s the good news. The bad news — from a year ago — is that companies that cut staff cut much more staff than they said they were going to cut.
“My view on that is that it’s become clearer who the winners and the losers are in the drive for market share. Those companies that are not producing profitable growth are losing staff pretty quickly,” Jacobson said.
Rieder agree and says revenue growth is fueling the employment increase. He said 88% of the companies surveyed say to expect to increase revenue in 2015. That revenue growth will come from expanded market share.
That — Jacobson said — is creating a bit of a staff dilemma for carriers.
• 74% of property-casualty firms are going to increase staff in the next 12-months.
• That’s 17-points higher than personal lines companies.
• And it’s 10% higher than those writing both commercial and personal lines business.
Other than actuarial and executive-level positions, the Jacobson Group and Ward Group survey found all positions in insurance have become very hard to fill.
Here are other conclusions from the survey:
• Unemployment in insurance is at 2.3%.
• Voluntary turnover is 7% to 9%.
• Voluntary turnover used to be 4% to 7%.
• Temporary employees are now a large part of the insurance industry.
• Temporary employment is 2% of the U.S. economy.
Insurance Information Institute (I.I.I.) President Dr. Robert Hartwig said employment in the industry looks very good. In an article he recently posted on the I.I.I. website, Hartwig wrote, “For the 12 months ending in January 2015, P/C carrier employment rose by 10,000, or 1.9%. For the 12 months ending in January 2015, P/C carrier employment rose by 10,000, or 1.9%.”
In other words, things are looking pretty good. “In January 2015, on a year-over-year basis, virtually every subsector of insurance industry employment was up, with many subsectors rising solidly. Even life carrier employment, which has generally trended downward, rose,” Hartwig wrote.
Lastly, Hartwig looked at agent and broker employment. “The agent/broker segment gained 32,900 jobs in January 2015 vs. January 2014 (up 4.7%) to 726,900. After losing jobs in the Great Recession (from 682,100 in the first month of the recession, December 2007, to 652,900 in the first month of recovery, July 2009, and on to a trough of 638,200 in September 2010) the segment has been fairly steadily gaining jobs and has now passed the pre-recession peak of 684,500 reached in July 2007,” he added.
Hiring looks good. The jobs are there. But who’s going to fill them? And who is going to fill the jobs of those who will soon be retiring?
It’s a big — and very important question — being asked by McKinsey & Co. in a new report. While interpreting a Marshberry report, the company concluded the average age of today’s insurance agent is 59. It then went on to predict — because of the advanced average age of agents — 25% of the nation’s insurance agents will retire by 2018.
That’s a huge loss.
To keep up McKinsey & Co. said independent insurance agencies need to hire three producers for every producer retiring. And that has to start immediately.
“This data makes it clear that agencies cannot afford to continue to do business as usual when it comes to hiring new producers. The most relevant agencies of the next decade will not only hire aggressively in the short-term, they will work to improve their retention in the long-term to ensure success,” the report said.
But as you already know, millennials and young college graduates have a “less than favorable” opinion of the insurance industry. Several months ago Weekly Industry News reported on a study from The Institutes and the Griffith Insurance Education Foundation. It said young people view insurance as “boring.”
McKinsey’s survey offers a solution. It says hiring needs to focus on how insurance is a career of problem solving and helping people. “Messages need to avoid a focus on selling insurance, as this was the most common reason why millennials were not interested in working in the insurance industry. Also, the messaging needs to combat the image of a boring industry.”
In an interview with the online publication Insurance Business America, Working at Home Vintage Employees CEO Sharon Emek offers another idea. Tell the millennials and others considering an insurance career that they can also work from home or from remote locations. Being in the office is not that critical to insurance sales.
“If they know they’re working for an agency that offers the opportunity to have a career with flexibility, you will definitely have more young hires. It’s a good opportunity for young people to be mentored by aging workers with institutional knowledge, while having them stay engaged with the industry as long as possible,” she said.
Source links: Carrier Management and Insurance Information Institute and Insurance Business America