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

By Steven Weisbart, Chief Economist

The U.S. Labor Department’s Bureau of Labor Statistics (BLS) just published data as of July 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 in our charts are not seasonally adjusted and are one month behind the national data. Accordingly, the BLS report released on September 7, 2018, provides national data for August 2018 and industry/sector-specific data for July 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.

In the past year, employment in insurance has not grown as fast as other sectors of the economy. Overall, employment in the U.S. continues to be strong. In July 2018 there were 2.41 million more people employed in nonfarm civilian jobs than one year earlier (+1.6 percent)—an unusually strong increase this late in the business cycle. In the service sector, employment was up by 1.4 percent, year-over-year in July 2018. Within the service sector, in “insurance carriers and related” activity, employment grew by only 0.6 percent. The lesser growth in insurance employment might actually be a good thing if increased productivity is the reason why job growth was more muted than in other sectors of the economy. Within the “insurance carriers and related” group, employment changes varied by line of business and by type of activity.

For the 12 months ending July 2018, P/C carrier employment fell by 6,400 (-1.1 percent), to 553,600. Taking a slightly longer perspective, employment in the P/C sector has stayed in a small range of 549,000 to 560,000 for the past 30 months. From time to time, BLS reclassifies workers into sectors that it believes better describe the work they do. The last major reclassification in the P/C carrier subsector took place in 2004-2005, when BLS dropped P/C carrier employment from 599,000 in March 200 to 547,000 in March 2005. Since then it sank to a low of 513,500 in January 2014, but grew strongly in 2015 (up 30,500 for that year, or +5.9 percent).

Employment by life/annuity carriers was nearly flat in July 2018 vs. July 2017 (up 200, or 0.1 percent) to 350,000. Employment in this segment has fallen in 10 of the last 16 months. Even so, it has remained in the range of 345,000 to 350,000 for 30 consecutive months.

For the 12 months ending in July 2018, health carrier employment rose by 10,500 (+2.1 percent) to 511,200. 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 54,000 or +11.8 percent.

The agent/broker segment gained 2,500 jobs in July 2018 over July 2017 (up 0.3 percent), to 809,300. Employment growth in this category in 2018 was highly variable. It dropped in January 2018 (down 4,700); mostly restored that in February (up 4,000); dropped again in March (down 800); rose again in April (up 1,000); was essentially flat in May (up 400); rose in June (up 1,200), but fell in July (down 1,200). This continued a pattern from the end of 2017 (down 400 in November, up 500 in December). Employment totals in this subsector have stayed in the 800,000 to 810,000 range for 18 months (since February 2017).

Among the smaller industry segments, reinsurance carrier employment in the U.S. was up by 500 (+1.9 percent) in July 2018 vs. July 2017 to 27,100. Employment at independent claims-adjusting firms on a year-over-year basis for July 2018 rose by 1,500 to 60,000, (up 2.6 percent). Year-over-year employment in the category of third-party administration of insurance funds rose by 6,500 (3.5 percent), to 194,700. 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.

 

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