Insurers optimistic about hiring, revenue

Insurers are showing hiring optimism as 67% of them have plans to increase their staff during the next 12 months, driven by the property/casualty segment at 69%. In addition, 79% of companies expect to grow revenue during the next 12 months. This is according to a study by The Jacobson Group and Ward, part of Aon plc.

Commercial lines P/C companies are ,most optimistic when it comes to increasing revenue, as 81% expect growth, compared to 78% of balanced lines companies and 67% of personal lines companies, the survey said.

In addition, 93% of life/health companies expect an increase in revenue, and 50% of the companies stated that change in market share will drive their expected revenue changes. Thirty-five percent also cited pricing factors.

The primary reason companies plan to increase staff during the next 12 months is an expected increase in business volume, the survey said. More than two-thirds of companies (37%) listed this as the primary reason to hire, followed by areas being understaffed.

In addition to these plans for growth, 10% of companies are planning to decrease their number of employees. When it comes to reductions in headcount, 8% of companies report that reorganization will be the primary reason for this activity during the next 12 months.

Areas where insurers plan to add staff

Insurers continue to determine their needs and expectations for moving forward. Although recruiting difficulty has eased slightly, there has been a realignment of talent as carriers establish long-term plans.  Sales/marketing and product management are the top two areas where companies are looking to add experienced staff. Operations and actuarial roles were identified as areas that are the most likely to add entry-level positions.

Small companies have the greatest need in claims, followed by technology. In the life/health segment technology, sales/marketing and actuarial are the most likely areas for hiring.

Insurers address the new world of work

Since the pandemic, the world of work has changed for many industries, and the insurance industry is no exception. The survey said 92% of companies offer a hybrid model to their employees, followed by 69% with full-time remote, and 52% with flexible work hours.

Nearly three-quarters of companies (72%) said that during the next six months, they expect their employees to be in the office at least one day a week (hybrid) and 18% of companies expect their employees to be required in the office more frequently by mid-2023. Personal lines companies are the most likely to offer full-time remote work at 40%, compared to commercial and balanced lines at 30% and 19%, respectively.

The only respondents expecting employees in the office every day were small companies (9%). This segment is also more likely to offer full-time remote work (30%), compared to large and medium-sized companies.

Key takeaways from the study

The main takeaways from the survey are that despite the financial challenges of inflation and recession concerns, most insurance companies are planning to increase their staffing level in 2023, explained Jeff Rieder, partner with Ward Benchmarking Aon.

Recruiting difficulty has eased since 2022 but still remains difficult compared to pre-pandemic levels, Rieder said. Roles in technology, underwriting and claims remain in high demand. In addition, he said, 72% of positions are expected to be filled with experienced staff against the backdrop of 386,000 job openings in finance and insurance.

Implications for agents and advisors

So what does this mean for agents and advisors? The need for the agent is as strong now as it has ever been and these labor challenges reinforce the need for strong relationships between agents/advisors and their customers to help deliver on customer expectations, Rieder explained.

Also, because agents and advisors are often competing for the same type of talent found within the insurance carriers, this will add more pressure on insurers and agents/advisors to have competitive compensation programs and keep increases in pay higher than what has been seen in the past 10 years.

In addition, Rieder pointed out, the demand for experienced staff will make it difficult to meet hiring targets. “Companies that have developed strong training and development programs will be in a better position to build their own staff with the labor shortage,” he said.

The Insurance Labor Market Study was conducted in the first quarter of this year to investigate hiring trends in the insurance industry.

Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].      

© Entire contents copyright 2023 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].