14% of operators intend to reduce the number of employees

Fourteen percent of insurance companies plan to cut headcount in the coming year, according to figures from the latest Aon and The Jacobson Group insurance job market study.

Jeff Rieder, partner at Aon and head of STG Performance Benchmarking, said this carrier cutback number has increased “significantly” since the initial pandemic recovery. The percentage of companies planning cuts peaked in July 2020, “but we’re almost back to that guy,” he said.

Greg Jacobson, CEO of The Jacobson Group, explained that the majority of companies that have reduced staff by more than 5% in the past 12 months have been exposed to personal lines. Taking a step back, half of the companies that cut staff exposed themselves to personal lines.

“I think personal lines drive a lot … or maybe most of the staff cuts,” he said. “We’re still seeing fairly steady hiring in the commercial lines and actually maybe more hiring than anticipated in the life and health side of the business.”

Aon and The Jacobson Group have conducted the biannual labor market survey for 15 years.

The study looks at current and future workforce trends for the insurance industry. The most recent survey covered about 293,000 employees who work for insurance companies – just over 18% of the industry as a whole. Eighty-three percent of participants work in property and casualty insurance.

The latest version of the study found that while 79% of insurance companies expect to increase their revenue, only 52% of companies plan to increase their staff and 34% plan to maintain their current staffing levels.

Automation is the most common reason companies plan to downsize in the next 12 months, the study reported, followed by areas that are overworked. Many companies are rebalancing their portfolios, Rieder explained, and many multi-line P&C companies have pulled back from personal lines operations.

Related: At the national level, it plans a 5% reduction in the number of employees

As companies rebalance their portfolios, they’re finding they may not need the claims processing customer service positions to support declining businesses. Human resources, finance, information technology are other areas that Rieder said can be strengthened as carriers see increased efficiency through their business.

Still, both Rieder and Jacobson don’t see the expected cuts reducing industry-wide jobs. Rieder said he believes many employees in displaced positions will find jobs with other insurance companies. Some may leave for other industries, he said, but he believes “a lot of positions will remain in the industry, particularly if they’re claims or underwriting or any type of distribution-focused position.”

The total number of employees working for insurance companies in the US is just over 1.6 million. Aon and The Jacobson Group predicted that carrier job growth would flatten in their early 2024 report, and “I think that’s pretty much what we’re seeing,” Jacobson said.

Moving beyond operators and to a total industry view that includes distribution, however, reveals a different story. In the past year, the industry added nearly 42,000 jobs, Jacobson said, to reach a total of 3.025 million employees.

This is the first year the number has crossed the three million mark.

“Hiring in insurance carriers is leveling off, but we don’t see a slowdown in overall industry growth overall,” Jacobson said.

Other notable numbers

• Sixty-four percent of small insurance companies plan to add staff over the next year. This is 12 points and 23 points higher than medium-sized companies, respectively.
• Seventy-nine percent of carriers expect to increase their revenue over the next 12 months. This is two points higher than reported in the previous version of the survey, recorded in January.
• In the next six months, 72% of companies expect most employees to work a hybrid schedule. After the next six months, 6% expect to change their approach to requiring more desk work. Currently, 4% of carriers require daily office work.
• Underwriting, claims and technology roles are expected to see the most growth over the next 12 months. Actuarial, executive and analytical roles were reported to be the most difficult to fill.
• With more than half of insurers planning to hire in the coming year, industry turnover has slowed slightly. The Jacobson Group and Aon report that recruiting is likely to remain “relatively difficult for the remainder of the year and into 2025.”

TOPICS
Carriers