Compared to last year, 31% of companies said recruiting has gotten moderately better. (Credit: ink drop/Adobe Stock)
Insurers plan to boost revenue next year — but not necessarily staff, according to the 2024 Insurance Labor Market Study from Aon and The Jacobson Group.
While 79% of insurers said they expect revenue to increase in the next 12 months, only 52% said they plan to increase staff. It’s the second year in a row in which the two metrics haven’t aligned.
The study also found that 14% of companies have plans to decrease their staffing, up from 10% last year.
“Historically we’ve seen a very strong correlation between revenue growth and employee growth,” said Jeff Rieder, a partner and head of performance benchmarking with Aon, in a webinar. “This marks the first time in a two-study period where those did not sync up quite the way they have been.”
Efficiencies could be playing a role — increased automation and overstaffing were the top two reasons companies cited for reducing staff. Rate increases and rebalancing are likely part of it too. On the personal lines side especially, property & casualty insurers have been leaving states where rate increases weren’t approved and even pulling out of personal lines altogether.
“In many cases revenue increases have been due to rate increases while the company is actually decreasing their underlying exposure,” Reider said. “So that means lower policy count, smaller customer base, fewer number of claimants to support — that might be helping companies think through their staffing requirements.”
P&C insurers are less optimistic about hiring in the year ahead than life & health insurers. While 69% of life & health insurers plan to increase staff, only 51% of P&C insurers said the same. Fully 16% of P&C insurers expect to decrease staff, compared to 6% of life & health insurers.
Last year, 65% of P&C insurers said they planned to add employees, but only 59% actually did. And 19% decreased staff, even though only 10% had expected to.
On the bright side, turnover in the industry has come down from previous peaks, and many insurers report that finding quality candidates has gotten easier. Compared to last year, 31% of companies said recruiting has gotten moderately better.
And, overall, the insurance employment picture is fairly stable. Carriers have counted roughly 1.6 million employees for the last several years, and wider insurance industry employment is at about 3 million people now.
“I certainly see a slowing of the market,” said Greg Jacobson, CEO of The Jacobson Group. “But I don’t necessarily see a huge decrease in the number of employees in the industry happening anytime soon unless we go through a significant recession.”
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