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

By Steven Weisbart, Chief Economist

The U.S. Labor Department’s Bureau of Labor Statistics (BLS) just published data as of December 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 February 1, 2019, provides national data for January 2019 and industry/sector-specific data for December 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 surprisingly strong. In December 2018 there were 2.66 million more people employed in the country than a year earlier (+1.79 percent)—an unusually strong increase this late in the business cycle. In the private service-sector overall, employment was up by 1.58 percent, year-over-year in December 2018. As for the insurance industry, on a year-over-year basis, employment changes in most major segments of the insurance industry were mixed.

For the 12 months ending December 2018, not-seasonally-adjusted P/C carrier employment dropped by 17,900 (-3.3 percent) to 519,500. This continues an employment drop that began roughly in the fourth quarter of 2017 and continued throughout 2018. At the end of the third quarter, P/C carrier employment was 547,200; one quarter later it was 537,400; and the quarterly markers in 2018 were 528,500 at the end of Q1, 531,200 at the end of Q2, 521,200 at the end of Q3, and 519,500 at the end of Q4. Employment is now back where it was in 2013. The employment spurt in 2016-17 (when the count was in the 540,000-550,000 range) now looks like an anomaly.

In contrast, not-seasonally-adjusted employment by life/annuity carriers rose over the 12 months ending December 2018 (up 6,000, or +1.8 percent) to 345,200. Virtually all the increase occurred in the last five months of 2018. Employment in this segment was 339,200 in December 2017 and 339,800 in July 2018.

For the 12 months ending in December 2018, health carrier employment rose by 19,300 (+3.7 percent) to 536,900. The health carrier segment had been gaining jobs quite steadily for decades. However, this sector had a major reclassification beginning in March 2015, which reset the sector’s employment from 517,900 in March 2015 to 457,000 in March 2016. Since then, employment in this sector rose by 79,900 or +17.5 percent.

The agent/broker segment gained 10,600 jobs in December 2018 over December 2017 (up 1.3 percent), to 828,600. Employment growth in this category in 2018 was variable. It rose in January 2018 (up 200), February (up 3,800), March (up 2,200), April (up 1,300), and May (up 100); dropped in June (down 700), July (down 200), August (down 600), and September (down 400); rose again in October (up 2,200) and November (up 5,200) and dropped in December (down 2,500). Employment totals in this subsector are near the highest that they have been in recent history.

Among the smaller industry segments, reinsurance carrier employment in the U.S. was up by 2,100 in December 2018 vs. December 2017 to 29,800 (+7.6 percent). Employment at independent claims-adjusting firms on a year-over-year basis for December 2018 dropped by 1,800 to 56,100 (down 3.1 percent). Year-over-year employment in the category of third-party administration of insurance funds rose by 8,900 (+4.6 percent) to 204,400. 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.