insurance labor market study · january 2018 1 insurance labor market study the jacobson group and...
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January 2018
1
Insurance Labor Market Study The Jacobson Group and Ward Group, part of Aon plc (NYSE: AON), conducted a study to investigate
hiring trends within the insurance industry. The following presents the findings of an Insurance Labor
Market survey conducted in the first quarter of 2018.
Summary of Findings
58% of companies plan to increase staff during the next 12 months driven by 74% in commercial lines
and 71% in personal lines
11% of companies expect a decrease in staffing during the next 12 months, 5 points higher than a
year ago
76% of small companies plan to add staff during the next 12 months. This is 16 and 44 points higher
than medium-sized and large companies, respectively
Expectations to grow revenue are 2 points lower than July at 79%
Large companies are the most optimistic to increase revenue as 86% expect growth, compared to
80% for medium-sized and 72% for small companies
Optimism for revenue growth increased 13 points to 94% for Life/Health companies from July 2017
while Property/Casualty companies decreased 3 points to 77%. This is the second highest total for
the Life/Health segment since the survey began
65% of the companies stated that change in market share will drive their expected revenue changes with 20% referencing pricing
The primary reason to increase staff during the next 12 months is the expectation of expansion of business
or new markets. 51% of companies listed this as the primary reason-to-hire followed by 47% who reported
anticipating an increase in business volume
23% of companies report that automation will be the primary reason for reductions in staff during the next
12 months followed by reorganization at 17%
Technology, Claims, and Analytics roles are expected to grow the greatest during the next 12 months.
Sales/Marketing is the greatest need for Life/Health companies while Technology is for Property/Casualty
companies
The insurance industry continues to face an unprecedented talent recruitment environment. Today’s
increasingly challenging labor reality is being impacted by increased staffing demands, a growing mid-level
talent gap, impending retirements, virtually non-existent industry unemployment and a shallowing talent
pool
Technology, Actuarial, and Analytic positions are the most difficult to fill
Companies are requiring more temporary staff. 12% of companies are planning to increase their use, up from 11% last January
The Jacobson Group and Ward Group Insurance Labor Market Study 2
Notable Survey Trends from January 2017 to January 2018
The Total industry grew 0.79% versus an anticipated rate of 1.56%
The P&C industry grew 0.84% versus an anticipated rate of 1.79%
The L&H industry grew 0.55% versus an anticipated rate of 0.61%
Projection
If the industry follows through on its plans, we will see a 1.19% increase in industry employment during
the next 12 months, creating new jobs.
Projected Growth
Total Benchmark 1.19%
Life & Health -0.40%
Property Casualty (PC) 1.61%
PC Personal 0.98%
PC Commercial 2.01%
PC Balanced 1.58%
Survey Results
Participant Profile
The total average number of employees is 1,820
Regional 65%
National/Multi-
National 35%
Business Profile
Property Casualty
79%
Life/ Health 20%
Reinsurer 1%
27%
37%
36%
Over 1,000…
300-1,000 Employees
Under 300 Employees
Company Size
The Jacobson Group and Ward Group Insurance Labor Market Study 3
Unemployment Rates
*Percentage indicated 6-month trailing average
Source: U.S. Bureau of Labor Statistics
Insurance Carrier Employment
Source: U.S. Bureau of Labor Statistics
4.1%
2.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Overall Insurance & Related 6 per. Mov. Avg. (Insurance & Related)
1360
1380
1400
1420
1440
1460
1480
1500
1520
1540
In T
housa
nds
7.43%
105,500 new jobs since April 2011
The Jacobson Group and Ward Group Insurance Labor Market Study 4
78,200 new jobs since April 2011
Temporary Employment
Temporary employment is up by 43,000 jobs since July. The temporary penetration rate is now 2.03%
Source: U.S. Bureau of Labor Statistics
Revenue and Staffing Expectations
1.00
1.20
1.40
1.60
1.80
2.00
2.20
Penetr
ation R
ate
Increase Staff 58%
Maintain Staff 32%
Decrease Staff 10%
12-Month Staffing Plan
Increase Revenue
79%
Flat Growth
14%
Decrease Revenue
7%
12-Month Revenue Plan
The Jacobson Group and Ward Group Insurance Labor Market Study 5
12-Month Staffing Plans
12-Month Staffing Plans Increase vs. Expected Revenue Growth
79% of companies expect an increase in revenue growth, down 2 points from the July survey
94% of Life/Health companies expect an increase in revenue
14% of companies expect flat revenue growth, up 1 point from July
Both P&C and Life/Health companies responded that the primary driver for expected revenue
changes will be market share, at 67% and 59% respectively
58%
10%
32%
0%
10%
20%
30%
40%
50%
60%
70% July 2009 - January 2018
Increase Employees Decrease Employees Maintain Size
79%
58%
0%
20%
40%
60%
80%
100% July 2009 - January 2018
Expected Revenue Growth Increase Employees
The Jacobson Group and Ward Group Insurance Labor Market Study 6
12-Month Staffing Plans vs. Actual
12-Month Staffing Plans vs. Actual – By Industry
0.0%
0.0%
1.2%
3.6%
1.2%
28.9%
15.7%
24.1%
10.8%
12.0%
2.4%
0.0%
4.7%
2.3%
1.2%
2.3%
30.2%
16.3%
14.0%
14.0%
11.6%
3.5%
0% 5% 10% 15% 20% 25% 30% 35%
Decrease employees by > 20%
Decrease employees by 10-20%
Decrease employees by 5-9%
Decrease employees by 2-4%
Decrease employees by <2%
Maintain current size
Increase employees by <2%
Increase employees by 2-4%
Increase employees by 5-9%
Increase employees by 10-20%
Increase employees by > 20%
Actual Staffing January 2017 Plan
61.8%
26.5%
11.8%
64.1%
29.7%
6.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Increaseemployees
Maintaincurrent size
Decreaseemployees
Actual Staffing January 2017 Plan
Property/Casualty
47.1% 47.1%
5.9%
68.4%
26.3%
5.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Increaseemployees
Maintaincurrent size
Decreaseemployees
Actual Staffing January 2017 Plan
Life/Health
The Jacobson Group and Ward Group Insurance Labor Market Study 7
Job Openings in Finance and Insurance
Source: U.S. Bureau of Labor Statistics
12-Month Staffing Plans
74% of commercial lines P&C companies are expecting to increase staff during the next 12
months. This is 3 and 37 points higher than personal and balanced lines P&C companies,
respectively
Of the companies who plan to add staff during the next 12 months, 88% expect an increase in
revenue with 71% responding that it will be due to a change in market share
74% of companies who plan to maintain staff during the next 12 months are expecting an
increase in revenue growth
121
176 162
182
220 224
254 250
278
0
50
100
150
200
250
300
2009 2010 2011 2012 2013 2014 2015 2016 2017
0.0%
0.0%
1.2%
3.6%
1.2%
28.9%
15.7%
24.1%
10.8%
12.0%
2.4%
1.2%
0.0%
4.7%
1.2%
3.5%
31.4%
15.1%
14.0%
17.4%
10.5%
1.2%
0% 5% 10% 15% 20% 25% 30% 35%
Decrease employees by > 20%
Decrease employees by 10-20%
Decrease employees by 5-9%
Decrease employees by 2-4%
Decrease employees by <2%
Maintain current size
Increase employees by <2%
Increase employees by 2-4%
Increase employees by 5-9%
Increase employees by 10-20%
Increase employees by > 20%
January 2018 Plan January 2017 Plan
The Jacobson Group and Ward Group Insurance Labor Market Study 8
12-Month Staffing Plans - Comparison to January 2017 by Industry
12-Month Staffing Plans - By Employee Size
33% of medium-sized companies are expecting growth in revenue/premium greater than 10%. This
compares to 27% for large companies and 17% for small companies
82% of small companies responded that revenue growth will be driven by market share compared to
43% of medium-sized and 71% of large companies
86% of large companies expect revenue growth in the next 12 months with 68% planning to maintain
or decrease employees
In July, 75% of small companies were expecting to increase staff while 62% of medium-sized
companies and 48% of large companies were expecting the same
58.8%
32.4%
8.8%
64.1%
29.7%
6.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
IncreaseStaff
Maintain DecreaseStaff
January 2018 Plan January 2017 Plan
Property/Casualty
52.9%
29.4%
17.6%
68.4%
26.3%
5.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
IncreaseStaff
Maintain DecreaseStaff
January 2018 Plan January 2017 Plan
Life/Health
75.9%
17.2%
6.9%
60.0%
30.0%
10.0%
31.8%
54.5%
13.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Increase FTE Maintain current size Decrease FTE
Small (Under 300) Medium (300-1000) Large (Over 1000)
The Jacobson Group and Ward Group Insurance Labor Market Study 9
Use of Temporary Employees during Next 12 Months
Recruiting Difficulty Continues
On a scale of 1 – 10 (10 being most difficult), companies responded that positions are still
moderately difficult to fill
Positions rated 5 or above are considered moderate or difficult to fill
Product line has a significant impact on the ease of filling positions
3 of 12 categories have seen recruiting difficulty increase slightly over the past year
Increase 12%
Maintain 75%
Decrease 13%
0 2 4 6 8 10
Operations
Accounting
Claims
Underwriting-Reinsurers
Compliance
Sales/Marketing
Underwriting
Product Management
Executives
Analytics
Actuarial
Technology
January 2018 January 2017
The Jacobson Group and Ward Group Insurance Labor Market Study 10
Likelihood of Increasing Staff by Function
Most in Demand Least in Demand
Analytics is the area most likely to increase staff for large companies followed by Technology and
Sales/Marketing. Medium-sized companies are looking towards Technology then Underwriting in the
next 12 months. After Technology, small companies have the greatest need in Claims
Personal and balanced lines companies are most likely to increase staff in Technology in the next 12
months compared to Underwriting for commercial lines companies
In total, the industry’s greatest need is in Technology staff
0
1
2
3
4
5
6
7
8 P&C Balanced P&C Commercial P&C Personal Life/Health
Most Likely
Least Likely
The Jacobson Group and Ward Group Insurance Labor Market Study 11
Likelihood of Increasing Staff by Function by Survey Period
Most in Demand Least in Demand
*Analytics included as additional function in July 2013 survey.
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0 Jan-18 Jan-17 Jan-16 Jan-15 Jan-14 Jan-13Most Likely
Least Likely
The Jacobson Group and Ward Group Insurance Labor Market Study 12
Reason to Increase Staff during Next 12 Months
Reason to Decrease Staff during Next 12 Months
7%
9%
16%
31%
41%
47%
51%
0% 10% 20% 30% 40% 50% 60%
To Correct the Manager to Staff Ratio
Other
Reorganization
Improve Service Delivery
Areas Currently Understaffed
Anticipated Increase in Business Volume
Expansion of Business/New Markets
2%
2%
5%
6%
8%
17%
23%
0% 10% 20% 30%
Contraction of Business/DiscontinuingOperations
To Correct the Manager to Staff Ratio
Other
Anticipated Decrease in Business Volume
Areas Currently Overstaffed
Reorganization
Automation Improvement Requiring Fewer Staff
The Jacobson Group and Ward Group Insurance Labor Market Study 13
Contact Information
Jeff Rieder
Partner and Head of Ward Group
Aon Hewitt
+1.513-746-2400
Jeffrey.Rieder@wardinc.com
Greg Jacobson
CEO
The Jacobson Group
+1.312-884-0407
GJacobson@jacobsononline.com
About Ward Group
Ward Group is the leading provider of benchmarking and best practices studies for the industry. We
analyze staff levels, compensation, business practices and expenses for all areas of company operations
and help insurers to measure results compared to peer groups, optimize performance and improve
profitability. Since 1991, we have performed more than 2,500 operational and compensation
benchmarking exercises for companies of all sizes, including more than half of the top 100 U.S. insurance
carriers.
Ward Group is part of Aon plc (NYSE: AON). For more information, please visit wardinc.com.
About The Jacobson Group
The Jacobson Group is the leading provider of talent to the insurance industry. For nearly 50 years,
Jacobson has been connecting organizations with insurance professionals at all levels across all industry
verticals. We provide an array of services including executive search, professional recruiting, temporary
staffing and subject matter experts. Regardless of the need or situation, Jacobson is the insurance talent
solution. Further information is available at www.jacobsononline.com.
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