Insurance Industry Employment Trends: 1990-2015 (July 2015)

The U.S. Labor Department’s Bureau of Labor Statistics (BLS) just published data as of July 2015 on detailed insurance industry employment, and the I.I.I. website contains updated multi-decade trend data in chart form. (The insurance industry/sector-specific data are not seasonally adjusted and are one month behind the national data; accordingly, the report released on September 4 provides national data for August 2015 and industry/sector-specific data for July 2015.) Data for the last few months are preliminary and are often revised later, but revisions are usually small. The I.I.I. slides show employment trends for property/casualty P/C, life/annuity, health (mainly medical expense) insurers, reinsurers, agents and brokers, independent claims adjusters, and third-party administrators.

For the economy overall, the latest report was positive but weak. BLS preliminary data say that on a seasonally-adjusted basis, the economy created 173,000 jobs—the second-weakest this year (after March) and the third time in 2015 that job growth was under 200,000. The national unemployment rate dropped by another 0.1 of a percentage point (from 5.2 to 5.1), but this seems to have been because the size of the labor pool dropped, possibly because of a greater number of retirements.

However, in July 2015, on a year-over-year basis, virtually every subsector of insurance industry employment was up, with many subsectors rising solidly. For the twelve months ending July 2015, P/C carrier employment rose by 5,800, or 1.1 percent to 527,700. P/C carrier employment has generally been rising after a nearly-steady five-year downward run and is now back to where it was in the middle of 2012.

Employment by life/annuity carriers rose in July 2015 vs. July 2014 (up 18,300, or 5.3 percent) to 365,100. This is the largest year-over-year percentage growth in life/annuity carrier employment in nine years (since September 2006). Life/annuity carrier employment stayed in a range of 340,000 plus or minus 2,000 for all of 2013 and half of 2014, but it broke out of that corridor on the upside in June 2014. In prior years it was higher—in 2010, for example, it was more than 370,000 for the first half of the year and even though sinking in the second half topped 355,000 in every month but December. Life/annuity carrier employment has not fallen for 15 consecutive months (and rose in 14 of those months). We can say that the long downward trend is over, although the gains are still small in historical context.

The health carrier segment has been gaining jobs quite steadily for decades. In July 2015 vs. July 2014 it rose sharply (up 26,400, or 5.3 percent) to 520,200. At least some of this growth is undoubtedly connected with the flood of health insurance applications, purchases and claims attributable to the Affordable Care Act (ACA), and some to population growth, but it is important to acknowledge that a high rate of growth has been characteristic of this sector for decades—long before the ACA was proposed. It will be interesting to watch whether, in the coming months, the recently-announced mega-mergers of major healthcare insurance carriers results in a reversal of this long-term trend.

The agent/broker segment gained 25,900 jobs in July 2015 vs. July 2014 (up 3.6 percent) to 737,900. After losing jobs in the Great Recession, from 682,100 in the first month of the recession, December 2007, to 652,900 in the first month of recovery (July 2009) and on to a trough of 638,200 in September 2010, the segment has been fairly steadily gaining jobs and passed the pre-recession peak of 684,500 reached in July 2007. From the recent trough through July 2015, this segment has gained 99,700 jobs.

Among the smaller industry segments, reinsurance carrier employment in the United States rose in July 2015 vs. July 2014 (up 500, or +2.0 percent). Employment at independent claims-adjusting firms on a year-over-year basis for July 2015 fell by 4,000 to 51,200. Year-over-year employment in the category of third-party administration of insurance funds rose by 8,100 (+4.7 percent) to 178,800. This category has grown quite steadily for over two decades, though not as fast as employment at medical expense insurers. It was set back slightly by the Great Recession, but has generally added jobs since then.