Insurance Labor Market Study · January 2018 1 Insurance Labor Market Study The Jacobson Group and...

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


Unemployment Rates

*Percentage indicated 6-month trailing average

Source: U.S. Bureau of Labor Statistics

Insurance Carrier Employment


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


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%


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


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


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 <2%

Maintain current size

Increase employees by <2%

Increase employees by 2-4%



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


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


Life/Health


Job Openings in Finance and Insurance


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 <2%

Maintain current size

Increase employees by <2%




Increase employees by > 20%

January 2018 Plan January 2017 Plan


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


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


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)


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


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


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


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


Contact Information

Jeff Rieder

Partner and Head of Ward Group

Aon Hewitt

+1.513-746-2400

[email protected]

Greg Jacobson

CEO

The Jacobson Group

+1.312-884-0407

[email protected]

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.

mailto:[email protected]

mailto:[email protected]

http://www.wardinc.com/

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Insurance Labor Market Study · January 2018 1 Insurance Labor Market Study The Jacobson Group and...

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