Insurance Industry Employment Trends: 1990-2017 (December 2017)

By Steven Weisbart, Chief Economist 

Employment in the general U.S. economy continues to be surprisingly strong; employment in December 2017 rose by 2.3 million, up 1.6 percent, (not seasonally adjusted) over the prior December. The U.S. Labor Department’s Bureau of Labor Statistics (BLS) just published data as of December 2017 on detailed insurance industry employment, and the Insurance Information Institute (I.I.I.) website contains updated multi-decade trend data in chart form. The I.I.I. slides show employment trends for property/casualty (P/C), life/annuity, health (mainly medical expense) insurers, and reinsurers, agents and brokers, independent claims adjusters, and third-party administrators.

The insurance industry/sector-specific data we report are not seasonally adjusted and are one month behind the national data; accordingly, the report released on February 2 provides national data for January 2018 and industry/sector-specific data for December 2017. Data for the last few months are preliminary and are often revised later, but month-to-month revisions are usually small. However, the February 2 BLS report also adjusts data to reflect new information on the size and composition of the U.S. population. This adjustment is appropriate because the numbers reported each month are merely the result of applying employment survey data to preliminary population estimates.

For the 24 months ending December 2017, P/C carrier employment ranged between 545,000 and 560,000, reaching 556,700 in December 2017. From December 2016 to December 2017, employment was up 6,200 (1.1 percent). Employment changes each month in this segment in 2017 were volatile. In May through July, employment rose by 6,200, then fell in August (down 3,800); rose in September (up 3,200), then fell in October and November (down 5,600), and then rose in December (up 2,900).

Employment by life/annuity carriers fell in December 2017 vs. December 2016 (down 4,600, or -1.3 percent) to 346,800. Employment in this segment has fallen in seven of the 12 months in 2017. For a longer-term perspective, we can start with March 2006, when BLS finished reclassifying some employment that was previously in life/annuity carriers into other subsectors. From then, employment in the life/annuity a segment has generally ranged from 320,000 to 366,500. It has remained close to 348,000 for two consecutive years.

For the 12 months ending December 2017, health carrier employment rose by 17,500 (+3.6 percent) to 507,000, The health carrier segment had been gaining jobs quite steadily for decades. However, the health carrier sector had a major reclassification that began in March 2015, which reset the sector’s employment from 517,900 in March 2015 to 457,200 in March 2016. Since then, employment in this sector rose by 49,800 or +10.9 percent. This rise is somewhat surprising, especially given the uncertainty in the medical care and health insurance marketplaces; it is likely that this will cool off in the coming months.

The agent/broker segment gained 9,600 jobs in December 2017 vs. December 2016 (up 1.2 percent) to 808,800. Employment growth in this category in the four years March 2013 to March 2017 was extremely strong. In March 2013 this segment employed 658,400, so that in 48 months, employment rose by 141,700, or 21.5 percent. More granularly, employment in this segment rose by 31,600 in 2013, by 52,300 in 2014, by 27,400 in 2015, and by 23,600 in 2016. But the spurt slowed in 2017 (up by 9,600). Some of the spurt might simply have been a recovery from the drop in employment in this segment in the years 2007 to 2011, when employment dropped from 667,200 in January 2007 to 645,000 in February 2011 (down by 22,200, or -3.4 percent).

Among the smaller industry segments, reinsurance carrier employment in the U.S. was down by 100 in December 2017 vs. December 2016 to 25,900. Employment at independent claims-adjusting firms on a year-over-year basis for December 2017 fell by 600 to 59,300. This is due, as expected, to adjusting employment after the rash of hiring to handle claims from the extensive destruction caused by Hurricanes Harvey, Irma and Maria, now that most of the claims adjustment period is over. Year-over-year employment in the category of third-party administration of insurance funds rose by 1,500 (0.8 percent) to 190,500. This category has grown quite steadily for more than 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. It is currently at an all-time peak.