Annual Survey Reveals Risks, Rewards of Insurance Jobs

Thanks to additional distribution through the Florida Association of Insurance Agents, the annual Florida Underwriter salary survey enjoyed a wider response rate than ever before. The survey also pulled in answers from significantly more CSRs. Of the 2011 respondents, 21.9 percent were CSRs, compared to 5.6 percent in 2010. The rest of the occupation breakdown for 2011 versus 2010 was: Underwriters, 5.6 percent in 2011, 6.3 percent in 2010; Agents/Brokers, 53.6 versus 66.7; Others, 18.9 percent versus 21.5 percent.

As testimony to the long-term viability of the insurance profession, a vast majority of the respondents said they have been in the business for two decades or more;; the average for all respondents was 24.3 years. Fifty-two percent had college or post-graduate degrees. Males accounted for 42 percent of the respondents; females 58 percent. This varies significantly from 2010, when the gender ratio was males 66 percent, and females 34 percent. The average age of respondents was 50.8 years. The youngest respondent was 24; the oldest 76.

Compensation and Workplace Norms
A slight majority (56.1 percent) of the respondents reported that they were salary-based only. Those that did receive commission reported rates across the board, from 100 percent to one percent. Of those, 21 percent reported decreased commissions in 2011, 14.3 percent said their commissions stayed about the same, and 8.7 percent reported increases.

The average work week was 44.8 hours, similar to the 2010 numbers. Telecommuting seems to have lost some favor in the past year. In 2010, 40.6 percent said their companies allowed telecommuting versus 59.4 percent who said they were strictly office-bound. This year's survey showed only 31 percent on the telecommuting side, and 61 percent office-bound (9 percent did not know their company's policy).

Economic Conditions
The economy has caused a decrease in business for 68 percent of the respondents; 21 percent said business stayed the same, and 11 percent reported an increase.

The fall-off of business has inevitably affected the job market. According to the U.S. Bureau of Labor Statistics, since December 2007, there has been a 7.1-percent decline in the number of agents and brokers nationwide. The Independent Insurance Agents & Brokers of America, Inc., reported that the number of independent insurance agencies has fallen over the last decade. In 1992 there were 46,000 agencies, and in 2008 there were 37,500, as agencies declined in number but grew in size.

On a positive note, the Insurance Information Institute (I.I.I.) reported that in October 2010 the industry added 4,200 agents' and brokers' jobs, a 0.7 percent increase from the previous month.

In a comprehensive report on the industry's financial and market conditions released in January, I.I.I. said, “A gradual change is occurring in the property/casualty insurance marketplace. There are fewer multiline companies — those that sell both personal lines of insurance (auto and homeowners) and commercial insurance for businesses. Several personal lines companies are now selling products that used to be sold exclusively by other sectors of the financial services industry and many banks and some stock brokerage firms are selling insurance products. Some companies that used to distribute their products through their own employees are also using all distribution systems, including direct response and independent agents. In addition, many companies, large and small, are directing their attention to specialized market niches. And, as the large commercial lines insurers seek overseas markets, there is a growing divergence between these companies and small insurers with a more regionalized approach.”

The I.I.I. report continued: “Sophisticated commercial customers in recent years have turned increasingly to captives and other alternative markets. Overall, more than 40 percent of commercial lines premium has now left the traditional insurance market, according to the A.M. Best Co.”

The I.I.I. also noted changes in distribution systems: “About two-thirds of commercial insurance is sold by companies that use independent agents and about two-thirds of personal insurance is sold directly or through captive agents that work for a single company. However, an increasing number of auto insurance companies are experimenting with multiple distribution channels.  Several major companies in both personal and commercial lines business now use or plan to use both insurance agents and direct sale methods to reach consumers, including the Internet and phone. New insurance-related entities are springing up on the Internet. Some provide quotes from many insurance companies, others act as a conduit to insurance agents. Employers are also expected to become major distributors of insurance products, offering auto insurance and other coverages through payroll deduction plans.”

I.I.I. also cited a study by  Conning Research & Consulting showing that affinity sales, or selling through groups, represent a growing distribution channel.

In addition, I.I.I. said, banks are increasingly selling property and casualty insurance to their clients. In 2007, more than 80 percent of banks responding to a survey said they distributed property and casualty insurance to their banking customers.

Marketplace changes, economics, and new distribution systems aside, when asked to rate the employment outlook for the insurance industry in general, 50 percent of our survey respondents judged it positive, and 78 percent said they would recommend their profession to others. That's good news for all of us.