More Carriers Plan to Cut Staff Compared to a Year Ago: Survey

Seventy-nine percent of insurance companies expect to grow revenue during the next 12 months, according to the latest labor market study by The Jacobson Group and Aon-Ward. This is two points higher than the January 2024 survey. Balanced lines property and casualty (P&C) companies “are the most optimistic to increase revenue as 90% expect growth, compared to 80% of commercial lines and 71% of personal lines companies. Seventy-five percent of life/health companies expect an increase in revenue,” states the report.  

Staffing Plans: The Numbers

Despite this anticipated increase in revenue, however, 14% of companies are planning to decrease their number of employees, up from 10% in the July 2023 study. Fifty-two percent of companies plan to increase their staff during the next 12 months, while 34% plan to maintain staff.   

“[Sixty percent] of balanced lines P&C companies are expecting to increase staff during the next 12 months,” explains the report. “This is 39 and five points higher than personal lines and commercial lines P&C companies, respectively.” Forty-three percent of personal lines P&C companies are expecting a decrease in staff over the next 12 months.

“Of the companies who plan to add staff during the next 12 months, 91% expect an increase in revenue with 62% responding that it will be due to a change in market share,” the report states. “Of those planning a decrease in staff, 13% of companies expect a decrease in revenue.” Likewise, 68% of companies planning to maintain staff expect an increase in revenue, while 3% expect a decrease over the next 12 months.

When it comes to company size, 64% of small companies are expecting an increase in staff, compared to 51% in January. “Medium-sized companies slightly decreased their 12-month expectations from 53% in January to 52% in July. Large companies decreased from 53% to 41%,” the report finds. As far as revenue, “54% of small companies and 42% of large companies expect growth in revenue/premium greater than 10% over the next 12 months. This compares to 21% for medium-sized companies.” All company sizes expect revenue changes to be driven primarily by market share.

“The insurance industry remains relatively stable with modest job growth expected for the next year,” says Gregory P. Jacobson, co-chief executive officer of The Jacobson Group. “While recruiting difficulty has slightly eased, insurance unemployment is low and turnover is slowing.”

Staffing Needs by Function

“As companies continue their efforts toward building a resilient business and workforce, underwriting, claims and other technical roles remain in demand,” said Jeff Rieder, partner and head of Performance Benchmarking at Aon’s Strategy and Technology Group, in a webinar about the study.

For the first time in the history of the study, technology is not the area most in demand overall. “Large companies are most likely to hire underwriting roles in the next 12 months, followed by technology and claims,” states the report. “Medium-sized companies are looking toward analytics then technology, while small-sized companies have the greatest need in claims, followed by underwriting.”

Recruiting

“On a scale of one to 10 (10 being most difficult), companies responded that most positions are at least moderately difficult to fill,” states the report. “Compared to July 2023, recruiting difficulty has eased in eight of 11 categories.” Currently, the most difficult positions to fill are actuarial, executives, and analytics, all of which are more difficult than the previous year.

“In total, 11% of companies feel the ability to hire talent has become more difficult compared to the prior year. This is down from 17% in July 2023. Thirty-two percent feel hiring difficulty has eased in the past year,” however. Fourteen percent of medium-sized companies feel it has been more difficult to hire talent, compared to large companies at 12% and small companies at 8%.

Voluntary vs. Involuntary Turnover

“At 8.6%, 12-month voluntary turnover is 1.7 points lower than January 2023,” according to the report. “This is slightly higher than the change in 6-month voluntary turnover, which was down 1.4 points.” The 12-month involuntary turnover, on the other hand, is at 3.5%, slightly lower than 3.7% in July 2023.

“Within P&C, personal lines companies had the highest 12-month voluntary turnover at 11.6%, compared to balanced lines and commercial lines companies at 9.3% and 7.4%, respectively,” states the report. “Compared to small and large companies, medium-sized companies reported the highest 12-month voluntary and involuntary turnover percentages.”

Workplace Flexibility

“During the next six months, 76% of companies are expecting most employees in-office at least one day per week, down from 82% in January,” the report states. “Seventy-two percent have a hybrid model compared to 76% in January.” Seventy-three percent of life/health companies and 78% of P&C companies expect most employees to come in at least once per week; commercial lines P&C companies “are most likely to have the majority of employees working remotely full time at 30%, compared to balanced lines and personal lines at 10% and 7%, respectively.”

Hybrid staffing models are most common for large companies (76%), followed by small (71%) and medium-sized (69%) companies, according to the report. Four percent of companies overall are requiring employees in-office every day, down from 6% in January. “After the next [six] months, 94% of companies expect no changes to in-office requirements. Six percent anticipate requiring employees to come in more,” while “13% of small companies expect employees to be required in the office more after six months, compared to large at 2%. Medium-sized companies expect no changes.” Overall, no companies expect employees to be in the office less after six months.