Fewer Insurers Planning to Increase Staff in 2024

Fifty-two percent of insurance companies plan to increase staff during the next 12 months, driven by the property/casualty (P&C) segment at 53%, according to the latest labor market study by The Jacobson Group and Aon-Ward. In a webinar about the study’s findings, Greg Jacobson, CEO of The Jacobson Group, noted that 52% “might sound great, but that’s the lowest the number—if you take out the year of COVID-19—has been since 2012, just when we were coming out of the financial crisis.”

However, the “Q1 2024 Insurance Labor Market Study,” which analyzes labor trends and staffing expectations and challenges, found that although the number of companies planning to increase staff is dropping, it is because more companies are planning to maintain staff, rather than reduce staff.

Last year, 69% of companies planned to increase staff, but only 54% did; meanwhile, greater percentages maintained (33%) or decreased (13%) employees than planned. This year, throughout the overall industry, 38% of companies plan to maintain staff, while only 10% plan to decrease staff. As a result, there does not appear to be a plan for mass layoffs, Jacobson noted. Furthermore, the overall unemployment rate is 3.7%, according to the report, and in the insurance industry it is only 2.3%.

The P&C industry mirrors overall insurance industry trends, as 37% of companies plan to maintain staff, compared to only 22% who said they planned to maintain staff in January 2023, while 10% plan to decrease staff, compared to 9% in January 2023. Notably, 66% of commercial lines P&C companies are expecting to increase staff during the next 12 months. “This is 32 and 16 points higher than personal lines and balanced lines P&C companies, respectively,” states the study.

When it comes to staffing plans according to employer size, the report states, “Since July, overall expectations to add staff decreased 11 points to 52%. [Fifty-one percent] of small companies are expecting an increase compared to 82% in July 2023. Both medium-sized and large companies increased their 12-month expectations from 50% in July to 53% in January 2024.”

The total industry headcount grew 1.17% versus an anticipated rate of 1.67%, and the P&C industry headcount grew 1.22% versus an anticipated rate of 2.07%. The study projects, “If the industry followed through on its plans, we will see a 1.21% increase in industry employment during the next 12 months, creating new jobs.”

Staffing Needs by Function

Like last year, the industry’s greatest overall need is technology staff, with P&C commercial lines being the most likely to hire technology staff, followed by P&C balanced, and then P&C personal lines. Once again, technology is followed by underwriting staff as the second greatest need, and claims staff is third. “Large companies are most likely to hire technology roles in the next 12 months, followed by analytics and [o]perations. Medium-sized companies are looking toward actuarial then underwriting, while small-sized companies have the greatest need in technology, followed by claims,” according to the report. Claims is most in-demand for P&C commercial lines, followed by P&C balanced, and then P&C personal lines.

Overall, the employee levels most likely to be added in the insurance industry are entry-level at 27%, experienced at 72%, and management/executive at 1%. When it comes to claims, significantly more (40%) entry-level positions are being sought, behind only operations (51%). Eighty-one percent of companies are seeking experienced technology staff, while 17% seek entry-level staff, and 2% management/executive staff.

The number-one reason to increase staff was anticipated increase in business volume (34%), while the top reason to decrease staff was automation improvement requiring fewer staff (8%).

Recruiting

The study found that claims and technology are slightly less difficult to hire for this year compared to last year, although recruiting difficulty overall remains relatively high. “In total, 14% of companies feel the ability to hire talent has become more difficult compared to the prior year,” states the report. “This is down from 17% in January 2023. [Thirty-two percent] feel hiring difficulty has eased in the past year.”

Meanwhile, 4% of respondents feel hiring talent has become “significantly better,” 28% of respondents feel it has become “moderately better,” while 53% feel it is “about the same.” Only 11% felt that it has become “moderately worse” and 3% “significantly worse,” making the overall outlook overwhelmingly positive.

Revenue

Overall, 77% of companies expect to increase revenue during the next 12 months, which is five points higher than the July 2023 survey, the study states. Twenty-one percent expect flat growth, and only 2% expect a decrease in revenue during the next 12 months. “Commercial lines P&C companies are the most optimistic to increase revenue as 84% expect growth, compared to 78% of personal lines and 75% of balanced lines companies,” according to the study. Furthermore, “This is the first time since July 2012 that P&C companies responded that the primary driver for expected revenue changes will be pricing, at 43%.”

In the industry overall, “Of the companies who plan to add staff during the next 12 months, 89% expect an increase in revenue with 60% responding that it will be due to a change in market share. Of those planning a decrease in staff, 11% of companies expect a decrease in revenue.” Likewise, 64% of companies that plan to maintain staff size during the next 12 months are expecting an increase in revenue growth, while 3% of those companies are expecting a decrease.

Voluntary vs. Involuntary Turnover

“At 9.3%, 12-month voluntary turnover is nearly two points lower than January 2023. This is a similar ratio for the six-month voluntary turnover,” according to the report. However, “Twelve-month involuntary turnover is just slightly higher than January 2023, at 4.2% compared to 3.6%.” Furthermore, compared to small- and large-sized companies, medium-sized companies reported the lowest 12-month turnover percentage overall.

Within the P&C industry specifically, “Personal lines companies had the highest 12-month voluntary turnover at 12.6%, compared to balanced lines and commercial lines companies at 8.3% and 7.2%, respectively,” the report states.

Workplace Flexibility

Eighty-six percent of surveyed companies offer flexible hours and 14% do not, according to the study. Overall, only 6% of companies require every day full-time in-office work, while 46% of companies require one to two days of in-office work per week, 30% require three to four in-office days per week, and 18% rarely require in-office days and instead allow full-time remote work. “During the next six months, 82% of companies are expecting most employees in-office at least one day per week, up from 76% last January.” However, 76% have a hybrid model compared to 72% last year.

Eighty-one percent of P&C companies expect most employees to come in at least once per week. Specifically, “Commercial lines P&C companies are most likely to have the majority of employees working remotely full time at 23%, compared to personal and balanced lines companies at 18% and 16%, respectively,” according to the study.

For the future, only 16% of companies anticipate expecting their employees to be in the office more, while 84% of companies expect to keep the same model; however, no companies were found to expect employees to be in the office less after six months. “Within P&C, personal lines companies are most likely to require employees in the office more after six months, at 28%, compared to 15% for balanced lines and 9% of commercial lines.”