By Dr. Steven Weisbart, Chief Economist, Insurance Information Institute
On a seasonally-adjusted basis, the number of people working for property/casualty (p/c) insurers has been dropping continually for two years (since February 2017), from 551,200 to 520,700 (the preliminary estimate for February 2019).
Seasonal adjustment plays a small part in determining these numbers. The not-seasonally-adjusted p/c carrier employment for February 2017 was 549,500, and the February 2019 preliminary estimate was 518,600.
What’s going on? Is this a trend? Based on the numbers alone, it’s hard to tell. Consider the following graph of seasonally-adjusted p/c carrier employment since January 2011 — 18 months after the official end of the Great Recession:
Don’t be misled by the spike in March 2015-March 2016. This is how the Bureau of Labor Statistics incorporates a change in classification—that is, in this case, some people who were previously not considered employed by p/c carriers were, as of March 2015, now considered as employed in this industry. Rather than an instant change, the adjustment is made over twelve months beginning and ending in March.
Since the data that begin in March 2016 also show a downtrend, it is easy to infer that, if there had been no reclassification in 2015-16, the downward trend that started (on the graph) in 2011 would in 2019 probably show p/c carrier employment at or below 500,000.
Although we don’t readily have policy counts over that span, it is reasonable to assume that, with growth in the population and the economy, p/c carriers are growing, and doing so with fewer employees. It is likely that at least some of this is due to the use of digital methods for activities that humans previously did. P/C carriers are becoming more productive.
The Triple-I blog received the terrific opportunity to ask State Farm life insurance agent, Robert Stevenson, a few questions about getting the most out of the often-misunderstood financial product.
What is your educational background and what was the path that led you to become a life insurance agent?
Robert Stevenson: I grew up in Savannah, Georgia and attended Hampton University in Virginia. I was working on my master’s degree when I accepted an opportunity with State Farm Insurance Corporate Headquarters. My job was to help the company expand its presence on the east and west coast. During that time, I learned about becoming a State Farm agent, and fell in love with it. I worked hard, and in December of 2000, opened my agency in New York, New York. As a State Farm agent, I’m a small business owner – I get to know people on a personal level. Helping them manage the risks of everyday life, recover from the unexpected, and realize their dreams is truly rewarding. I’ve never looked back.
What advice would you give students that are considering becoming life insurance agents?
RS: You have to listen and you have to care. This is more than a job. It’s helping people protect what’s most important to them. People don’t always want to talk about life insurance. It’s uncomfortable. But, let’s be honest. Someday you will die. No one in the history of the world has ever cheated it. That’s why, you have to make sure people are protected, and that they understand the bigger picture. You’re taking care of families and protecting the lifestyle they spent years building. While nothing can bring someone back, a family’s dreams can still be achieved because their loved one had life insurance. It’s truly a gift of love. You need to help people understand this.
What is the most common misconception that your clients have about life insurance?
RS: That they don’t need it. That they have enough. Often, I’ll hear the response, “I have it through my employer.” But, there’s a chance that benefit can be taken away. Also, if you have life insurance though an employer, and you get a new job, you might not receive the same coverage in your new position. Or, if you retire, it’s likely you won’t receive the same amount you once had. It’s wise to be proactive and read the fine print. Health and age also play a role in life insurance. I often hear, “I’ll wait till I’m married or have kids to get it.” Problem is, as we get older, our health tends to decline. Therefore, if you wait to get life insurance, you’ll likely end up paying more for it.
How do you help a client determine how much insurance they need and what type of policy is best for them?
RS: I start by forecasting. I ask customers questions like, “Where do you want to be in five, 10, 20, 30 years? Do you want to be married? Own a business? Have children? Travel? What’s your dream?” It’s vital for people to understand the importance of investing so they can generate more income as the years go by. Life insurance is not an afterthought. It’s the foundation of an investment strategy. You can’t invest in mutual funds, or stocks, or your child’s college, or buy rental properties, etc., if you don’t have the income. If something happens to you – your family is able to replace your income and still achieve their dreams.
It’s also important to help customers understand the difference between term life and whole life. Term does exactly what it sounds like – it covers you for a period of time. If you die within that period of time, your family is covered. But, think about this. Let’s say you’re 35, and you want to buy 20 or 30 years of term life insurance. Do you think you’ll be living 20 or 30 years from now? When I ask people that question, most answer, “Yes.” That’s when I remind them, when 20/30 years goes by and they’re still living, they won’t receive this payout. Whole life covers you for the entire length of your life. No matter what. It guarantees your family will get paid. It’s more expensive up front, but you’re guaranteeing a payment – it builds value you can cash out.
How does one make sure that their life insurance policy does not get lost and that their beneficiaries get paid as quickly as possible after their death?
RS: When we sell a life policy, we tell our clients, “Make sure your loved ones are aware of the policy and each of you know where important documents are located.” For example, the safe in your house. Also, as life changes, periodic updates with your State Farm agent or financial planner are a smart idea to ensure everyone is on the same page.
What professional achievement are you most proud of?
RS: That’s a tough one. I’d say, when I got my securities license. It allows you to sell packaged investment products like mutual funds and variable annuities. Getting this takes a lot of work and involves rigorous testing. I had one opportunity to pass it. That was a lot of pressure. But it was worth it. Getting my securities license gave me the opportunity to open my office and help people.
What do you like to do in your spare time?
RS: I enjoy reading and golf. Having activities like these lets me to unwind. But more so, I love spending time with my family. I have a son and a daughter who keep me busy. Family time is important. All things in equal parts. That’s what keeps life joyful.
In this hour-long live session, part of February Insurance Careers Month, a panel of experts shared insights and best-practices for engaging top young talent from non-RMI backgrounds and optimizing recruitment, onboarding and retention to better contend with emerging disruptive forces (Insurtech, virtual workspaces).
By Lynne McChristian, I.I.I. Non-resident Scholar and Media Spokesperson
The first slide of my presentation to a group of college students on Valentine’s Day last week was an image of an “I Love Insurance” button. Absent the foresight to bring such buttons for all, Plan B involved bringing heart-shaped chocolates. It fit in a way many of us in this profession would understand, as pathways into insurance are often a Plan B. Many universities are interested in helping students make a career in insurance their A-Game Plan, and that is exactly the type of student group I met with last week at the Gies College of Business at the University of Illinois at Urbana-Champaign (UIUC).
More than 20 students are participating this semester in the University of Illinois’ AXIS Risk Management Academy. In a partnership with global specialty insurer/reinsurer AXIS Global Holdings, UIUC established the Academy to interest students from various disciplines in the myriad of career paths available in the insurance industry. Students in this year’s Academy are studying actuarial science, math and finance, financial planning and atmospheric science. Bringing professionals into their meetings to discuss jobs and career paths helps them see the opportunities, and it demonstrates how someone with a degree outside of insurance and risk management can put those skills to work within the insurance field.
I typically start a presentation to insurance newbies with the negative perceptions of the industry. It’s the “elephant in the room” that needs to get out of the way. Using images from various recent natural disasters, I talk about what happened, who was affected, how much it cost, what we learned – and spend time pointing out what is obvious to many of us but not so much to neophytes; simply, that too often people are surprised by the devastation because they are in denial about their risks. With that message conveyed, I can show that insurance is a people business, in which we help people recover from whatever disaster befalls them.
Insurance is personal, and that is a theme that resonates with Gen Z. How do I know? It’s not deep research on my part, but when students come up after a presentation with spark of light in their eyes that shows you’ve got their interest? That’s proof enough.
Lynne McChristian is the director of the Office of Risk Management & Insurance Research at the University of Illinois at Urbana-Champaign, where she is also a senior instructor teaching insurance and enterprise risk management classes.
There amid perfect weather, things got “risky” as hundreds of KSU students ran a giant inflatable obstacle course and engaged with representatives from I.I.I. member companies, Lockton and Farmers, to learn about internships and job openings, collect free swag and enter for a chance to win prizes.
The obstacle course created a sensation. But what really brought people back was the desire to learn more about insurance careers and internships and the amazing possibilities they can unlock. If one anecdote could best summarize the day, it would be the following exchange:
I.I.I. staffer: “Hi! Run the obstacle course; sign up for the raffle; learn about insurance!?”
KSU student: “No time. I’m here to talk to these guys about an internship.”
Brent Carris, Research Assistant at the Insurance Information Institute, files this report from the PennApps hackathon.
The Policy Incubator and the Insurance Information Institute (I.I.I) teamed up to sponsor a “hack-for-resilience” route at this year’s PennApps, the nation’s first student-run college hackathon which took place on September 7-9.
Presentations were given by: Howard Kunreuther, Carolyn Kousky, and Brett Lingle of the Risk Center at the Wharton School; and the I.I.I.’s Brent Carris. Presenters discussed innovative tech-driven, insurance and disaster-relief/preparedness solutions. Student interest exceeded expectations, with 44 teams entering the hack-for-resilience.
First place was awarded to a hack called Babble. This team created a mesh network that can be used when Wi-Fi is down to facilitate post-disaster communications, coordinate help, triage assistance, and give better information to first responders. Second place was awarded to a hack called Eleos that would match disaster victims’ needs directly with those who have resources to help. Eleos along with many other hacks were created in response to recent events, such as the California wildfires, and inspired by students whose family and friends survived disasters. You can see all other entries and winners here.
The I.I.I. is proud to partner with universities across the country to recruit the next generation of insurance professionals. Stay tuned for next week’s post from Kansas State University’s career event.
By Sean M. Kevelighan, CEO, Insurance Information Institute
Dear College Graduate:
Do you know exactly where you want to work after graduation? If your answer is no, then you’re in good company.
A lot of people I’ve encountered during my time in the insurance industry share a common story: Looking back at their college years, they’re still a bit surprised to be working in insurance. However, now that they’re here, they cannot imagine being in any other field. And this is the essential truth about insurance careers: That you can make the most of your knowledge, talent, passions and ambitions, no matter what you’ve studied or where you want to go. So here’s your chance not to be “surprised” by the amazing range of careers in insurance. Instead, we urge you now to take control of what could be the opportunity of a lifetime.
Making a real difference in the world—every day
Insurance has a long heritage as the bedrock on which progress is built that dates back to the Age of Exploration. Today, the insurance industry is growing and evolving. We’re looking to recruit and hire the people who will power the future by embracing and innovating the breakthroughs that will help us fulfill our primary mission: to make communities safer, more resilient, and more productive—and to rebuild lives, households, and businesses after a loss.
Presently, the insurance industry employs more than 2.8 million people—art historians and actuaries; data scientists and drone pilots; marketers and M & A specialists; underwriters and overachievers of every stripe—all of whom enjoy careers that offer opportunities to earn and grow, and serve. Insurers invest in their workers by building corporate cultures that embrace diversity and inclusion, offer outstanding work/life balance, and serve their communities through organizations such as the Insurance Industry Charitable Foundation.
Take the first step—you’ll be glad you did
As you embark on a path that will take you through life, I encourage you to investigate the limitless opportunities that insurance careers offer. To give you a sense of what you will find in the insurance industry, here are some facts and figures, as well as five stories of students and young professionals who are making their education and experience count: https://www.iii.org/article/careers-in-insurance.
On behalf of everyone at the Insurance Information Institute, we offer our congratulations on earning your degree and wish you the best of luck as you meet the next great challenges in life.
… over the past few months the insurance market has quietly started to relax its strict tie policy. While it has not yet formally repealed the rule, it is no longer enforcing it strictly.
A spokesperson for Lloyd’s said that the new policy was “in keeping with the norms of business dress in the City”.
One underwriter who works at Lloyd’s welcomed the move. “It’s the right thing to do,” he said. “If you had walked around without a tie 10 years ago it would have been the same as wearing a yellow mankini but this is part of general modernisation.”
Students considering a career in insurance would do well to look into marine underwriting, a fascinating specialty that calls for a variety of diverse skill sets and abilities.
A recent blog post by Sean M. Dalton, Head of Marine Underwriting for North America at Munich Re highlights the many ways prior education is applied in marine underwriting.
Geography and History: Understanding climates, economies, cultures, histories, natural resources, trade, politics, conflicts and more, is at the core of what marine underwriters insure.
Communication: written, verbal, and presentation skills, are of critical importance. This applies whether drafting business correspondence, preparing a quote/proposal, or servicing your business.
Mathematics: Strong skills in math including finance, statistics, economics, algebra, and calculus all are important and useful in analyzing profitability, developing technical rates, and understanding trends and developments in results.
Science: Fields including chemistry, physics, meteorology, and biology are all important to marine underwriters and brokers.
Computer Sciences: Utilization of the latest IT capabilities and an understanding of how technology impacts the risks we insure are keys to success. CAT modelling and the application of predictive analytics are some specific examples where the power of technology is helping advance the business.
Social Skills: The insurance industry is a “people” business and how we interact with others is of great value. From marketing, negotiation, problem solving, and networking, social and interpersonal skills are keys to a successful career.
The unemployment rate for the insurance industry in January 2018 was 2.2 percent, significantly lower than the national average of 4.1 percent, according to the Bureau of Labor Statistics. A study recently released by the Jacobson Group and Ward Group takes a closer look at the insurance industry labor trends.
“Anticipated increases in business volume and expansion into new markets continue to drive hiring demands,” said Gregory P. Jacobson, co-chief executive officer of Jacobson.
Highlights from the study include:
58 percent of insurance companies plan to increase staff during the next 12 months.
Technology, actuarial and analytic positions are the most difficult to fill.
The top 3 reasons for increasing staff were cited as: Expansion of business/new markets (51 percent); Anticipated increase in business volume (47 percent); And areas currently understaffed (41 percent).
Companies that are decreasing staff sited automation improvement (23 percent) as the top reason, followed by reorganization (17 percent) and areas currently overstaffed (8 percent).
Companies are requiring more temporary staff. Twelve percent of companies are planning to increase their use, up from 11 percent in January 2017.
The Insurance Information Institute tracks insurance industry employment statistics here