Insurance Industry Employment Trends: 1990-2018 (January 2018)

By Steven Weisbart, Chief Economist

The U.S. Labor Department’s Bureau of Labor Statistics (BLS) just published data as of January 2018 on detailed insurance industry employment, and the Insurance Information Institute (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 March 9 provides national data for February 2018 and industry/sector-specific data for January 2018.) 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, and reinsurers, agents and brokers, independent claims adjusters and third-party administrators.

Employment in the general U.S. economy continues to be strong. In February 2018, there were 2.7 million more people employed than a year earlier—a remarkable rise this late in the business cycle. As for the insurance industry, on a year-over-year basis, employment in most major segments of the insurance industry was up varying degrees.

For the 12 months ending January 2018, P/C carrier employment rose by 2,800 (+0.5 percent) to 552,100. Taking the month of January by itself, P/C carrier employed rose by 3,200 (following a 3,800 drop in August). Employment growth in this segment in January is unpredictable; since 1991 it rose 14 times and fell 13 times. From another perspective, in the 48 months since the low point of January 2014, employment in this segment has surged—up by 38,600 (+7.5 percent).

Employment by life/annuity carriers fell in January 2018 vs. January 2017 (down 3,900, or -1.1 percent) to 345,500. Employment in this segment has fallen in five of the last seven months, and in seven of 12 months in 2017. It is hard to see longer-term employment trends in the BLS data for life/annuity carriers. This is because three times since March 2005, BLS has reclassified some employment that was previously in life/annuity carriers into other subsectors, making it hard to know what to use as a baseline. The most recent reclassification ended in March 2015. From then, employment in the life/annuity segment has risen from 318,500 to 345,500 (up 27,000, or 8.5 percent). It has remained in the range of 345,000 to 350,000 for 26 consecutive months.

For the 12 months ending January 2018, health carrier employment rose by 16,100 (+3.3 percent) to 507,100. The health carrier segment had been gaining jobs quite steadily for decades. However, the health carrier sector had a major reclassification beginning 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 44,500 or +9.7 percent.

The agent/broker segment gained 7,100 jobs in January 2018 vs. January 2017 (up 0.9 percent) to 804,800. Employment growth in this category in the four years from 2013 through 2016 was extremely strong. 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 10,200). Some of this growth 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 642,500 in February 2011 (down by 24,700).

Among the smaller industry segments, reinsurance carrier employment in the U.S. was up by 200 in January 2018 vs. January 2017 to 25,900. Employment at independent claims-adjusting firms on a year-over-year basis for January 2018 fell by 2,000 at 58,800. This is due, as expected, to returning to a more normal workforce after substantial hiring (7,300 in September 2017—up 12.8 percent over the August employment level) in the wake of the extensive destruction caused by Hurricanes Harvey, Irma, and Maria. Year-over-year employment in the category of third-party administration of insurance funds rose by 700 (0.4 percent) to 188,500. 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. It is currently near an all-time peak, which was reached in December 2017 at 190,500.

 

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