Study shows insurance jobs are resilient during economic downturns

National Underwriter

By Mark E. Ruquet

The employment picture for the insurance industry reflects the same downward trends the U.S. economy has experienced, but the numbers are better than overall U.S. employment declines.

In an analysis issued by the Insurance Information Institute, as of July 2010, the property and casualty insurance industry was down by 26,900 jobs, or 5.5 percent, to 464,200 jobs since the Great Recession began in December 2007, compared to overall U.S. employment decline of 7.2 percent. The figures do not include agents and brokers.

The numbers were even better for the life industry and health-medical insurance industry. Life industry jobs declined 2.9 percent, or 10,400 jobs, to 343,900. Health-medical insurance employment numbers declined 2.6 percent, or 11,300, to 430,600.

The figures are preliminary and subject to change, I.I.I. noted, and have not been seasonally adjusted.

The numbers reflect the effects of the continued soft market, difficult economy, outsourcing, productivity enhancements and job consolidations all contributing to the decrease in jobs, according to Robert P. Hartwig, president and economist for the I.I.I.

On a month-to-month and year-over-year basis, the jobs picture was either close to flat or demonstrated downward trends in most categories in July.

The biggest job loss was for health-medical insurers, down close to 1 percent from June to July, a loss of 4,100 jobs. On a year-over-year comparison, employment for this class was down close to 2 percent, or 7,200 jobs.

P&C insurers were almost flat on a month-to-month basis, down only 400 jobs. On a yearly comparison, insurer employment was down close to 4 percent, 17,700 jobs.

Insurance agents and brokers were slightly on the plus side on a month-to-month basis, gaining 700 jobs. However, employment on a yearly basis was down 2.5 percent, or 16,300 jobs. Since the recession hit in December 2007, agents and brokers have seen a 7 percent drop in employment, or 47,900 jobs, down to a total of 631,700.

Reinsurers and claims adjusters also experienced gains on a month-to-month basis but remained in negative territory on a year-over-year basis.

Claims adjusters witnessed the most gains at close to 1 percent, or 400 jobs, but suffered the greatest hit on a year-over-year basis with close to 10 percent job loss, or 4,800 jobs. Since the recession began, claims adjusters’ job numbers have dropped close to 16 percent, or 8,100 jobs.

Reinsurers’ monthly numbers grew slightly by 0.4 percent, or 100 jobs, but remained down for the year at 5 percent or 1,400.

Speaking with NU Online News Service, Mr. Hartwig said that, looking forward, the industry can expect to see a flattening or leveling off of the job numbers, but one should not expect to see “a great deal of” additional job losses.

With the combination of continued economic weakness and soft market conditions, there is not the “catalyst for significant hiring in the industry.” However, Mr. Hartwig said while not adding to the total number of jobs, the industry is poised to do a lot of hiring as a significant number of insurance executives reach retirement age.

“This is an example where you see the declines in employment are flat, but that obscures an underlying trend of large numbers of retirements, which is off the top end, but at the bottom end, there are going to be a significant number of people hired into the business,” said Mr. Hartwig. “For people who are new college graduates or work in other industries, there are plenty of opportunities.”