LABOR STUDY RESULTS - Jacobson

LABOR STUDY RESULTS2021 Semi-Annual Insurance Labor Market Study ResultsQuarter One

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February 2021

1

Insurance Labor Market Study The Jacobson Group and Ward, part of Aon plc (NYSE: AON), conducted a study to investigate hiring trends within the insurance industry. The following presents the findings of an Insurance Labor Market Survey conducted in the first quarter of 2021.

Summary of Findings − 56% of companies plan to increase staff during the next 12 months driven by the Personal Lines P&C

segment at 72%

− 9% of companies are planning to decrease their number of employees. This is down from the 17% expected in the July study

− 61% of small and medium-sized companies plan to add staff during the next 12 months. This is 17 points higher than large companies

− Expectations to grow revenue is at 67%, 9 points higher than the July survey

− Optimism for revenue growth decreased 4 points to 71% for Life/Health companies from July while Property/Casualty companies increased 11 points to 68%

− Balanced lines companies are the most optimistic to increase revenue as 77% expect growth, compared to 71% of commercial lines companies and 50% of personal lines

− 56% of the companies stated that change in market share will drive their expected revenue changes, while 25% cited pricing

− The primary reason to increase staff during the next 12 months is areas being understaffed. 53% of companies listed this as the primary reason to hire

− 19% of companies report reorganization will be the primary reason for reductions in headcount during the next 12 months

− Technology, Analytics, and Claims roles are expected to grow the greatest during the next 12 months

− Recruiting is still considered difficult across most roles. Steady employment growth and the need for experienced staff will continue to create a challenging recruiting environment

− Technology and Analytics are the top two areas where companies are looking to add experienced staff. Operations and Claims roles were identified as areas most likely to add entry positions

− Analytics, Actuarial, and Technology positions are the most difficult to fill

The Jacobson Group and Ward Insurance Labor Market Study 2

Notable Survey Trends from January 2020 to January 2021 • The Total industry grew 0.60% versus an anticipated rate of 0.77%

• The P&C industry grew 0.74% versus an anticipated rate of 0.54%

• The L&H industry grew 0.01% versus an anticipated rate of 1.45%

Projection If the industry follows through on its plans, we will see a 0.74% increase in industry employment during the next 12 months, creating new jobs.

Projected Growth

Total Benchmark 0.74%

Life & Health 0.49%

Property/Casualty (PC) 0.76%

− PC Personal 0.84%

− PC Commercial 0.80%

− PC Balanced 0.74%

Survey Results

Participant Profile

The total average number of employees is 2,600

Regional55%

National/Multi-

National45%

Business Profile

Property/Casualty

86%

Life/ Health

9%

Reinsurer5%

29%

23%

48%

Over 1,000 Employees

300-1,000 Employees

Under 300 Employees

Company Size


Unemployment Rates

*Percentage indicated 6-month trailing average

Source: U.S. Bureau of Labor Statistics

Insurance Carrier Employment

Source: U.S. Bureau of Labor Statistics 8,200 new jobs since April 2011

2.2%

6.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Overall Insurance & Related 6 per. Mov. Avg. (Insurance & Related)

1300

1350

1400

1450

1500

1550

1600

1650

1700

In T

hous

ands

1.2%

19,700 new jobs since March 2020


Revenue and Staffing Expectations

12-Month Staffing Plans

Increase Staff56%

Maintain Staff35%

Decrease Staff 9%

12-Month Staffing Plan

Increase Revenue

67%

Flat Growth

30%

Decrease Revenue

3%

12-Month Revenue Plan

56%

9%

35%

0%

10%

20%

30%

40%

50%

60%

70% July 2009 - January 2021

Increase Employees Decrease Employees Maintain Size


12-Month Staffing Plans Increase vs. Expected Revenue Growth

• 67% of companies expect an increase in revenue growth, up 9 points from the July survey and 10 points lower than the January 2020 outlook

• In July, 17% of companies were expecting a decrease in staff. January 2021 expectations reduced to 9% driven by the P&C segment

• 30% of companies expect flat revenue growth which is the same total as the July survey and 13 points higher compared to January 2020

• P&C companies responded that the primary driver for expected revenue changes will be market share at 55%. All Life/Health companies responded that market share will be the driver

67%

56%

0%

20%

40%

60%

80%

100% July 2009 - January 2021

Expected Revenue Growth Increase Employees


Prior Year 12-Month Plans vs. Actual Staffing

44% of companies added staff since January 2020, while only 24% reduced staff

Prior Year 12-Month Staffing Plans vs. Actual - By Industry

0%

0%

2%

2%

3%

31%

15%

21%

13%

8%

5%

0%

4%

1%

5%

14%

32%

14%

12%

11%

6%

1%

0% 5% 10% 15% 20% 25% 30% 35%

Decrease employees by > 20%

Decrease employees by 10-20%



Decrease employees by < 2%

Maintain current size

Increase employees by < 2%

Increase employees by 2-4%



Increase employees by > 20%

Actual Staffing January 2020 Staffing Plan

58%

33%

9%

43%

31%

26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Increaseemployees

Maintaincurrent size

Decreaseemployees

January 2020 Staffing Plan Actual Staffing

Property/Casualty

71%

24%

5%

72%

14% 14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Increaseemployees

Maintaincurrent size

Decreaseemployees

January 2020 Staffing Plan Actual Staffing

Life/Health


Job Openings in Finance and Insurance

Source: U.S. Bureau of Labor Statistics

12-Month Staffing Plans

• 72% of Personal Lines P&C companies are expecting to increase staff during the next 12 months. This is 22 and 18 points higher than Commercial and Balanced Lines P&C companies, respectively

• Of the companies who plan to add staff during the next 12 months, 77% expect an increase in revenue with 66% responding that it will be due to a change in market share. Of those planning a decrease in staff, 57% expect revenue decreases to be driven by pricing

• 50% of companies who plan to maintain staff size during the next 12 months are expecting an increase in revenue growth. None of those companies are expecting a decrease in revenue

108

173 166 181217

234257 264

288 300266

234

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0%

0%

2%

2%

3%

31%

15%

21%

13%

8%

5%

0%

1%

0%

1%

7%

35%

14%

18%

14%

4%

6%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Decrease employees by > 20%Decrease employees by 10-20%

Decrease employees by 5-9%Decrease employees by 2-4%Decrease employees by < 2%

Maintain current sizeIncrease employees by < 2%Increase employees by 2-4%Increase employees by 5-9%

Increase employees by 10-20%Increase employees by > 20%

January 2021 Plan January 2020 Plan

*Percentages in chart rounded to nearest whole number


12-Month Staffing Plans - Comparison to January 2020 by Industry

12-Month Staffing Plans - By Employee Size

• Since July, expectations to add staff have increased. Small companies were expecting an increase of 48% compared to 61% in January. Medium-sized companies moved from 50% to 61%. Large companies differed in that 44% expect to increase employees compared to 47% reporting the same in July

• 37% of small companies are expecting growth in revenue/premium greater than 10%. This compares to 17% for both medium-sized and large companies

• All company size groups responded that expected revenue changes will be driven by market share

57%

34%

9%

58%

33%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

IncreaseStaff

Maintain DecreaseStaff


Property/Casualty

43% 43%

14%

71%

24%

5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

IncreaseStaff

Maintain DecreaseStaff


Life/Health

61%

34%

5%

61%

33%

6%

44%39%

17%

0%

20%

40%

60%

Increase FTE Maintain current size Decrease FTE

Small (Under 300) Medium (300-1000) Large (Over 1000)


Use of Temporary Employees during Next 12 Months

Recruiting Difficulty Continues

• On a scale of 1 – 10 (10 being most difficult), companies responded that positions are still moderately difficult to fill

• Positions rated 5 or above are considered moderate or difficult to fill

• Product line has a significant impact on the ease of filling positions

• Recruiting difficulty is increasing! 7 of 11 categories have seen recruiting difficulty increase slightly over the past year

Increase13%

Maintain75%

Decrease12%

0 2 4 6 8 10

Operations

Claims

Accounting

Sales/Marketing

Compliance

Underwriting

Product Management

Executives

Technology

Actuarial

Analytics

January 2021 January 2020


Likelihood of Increasing Staff by Function

Most in Demand Least in Demand

• In total, the industry’s greatest need is in Technology staff

• Analytics is the area most likely to increase staff for large companies, followed by Technology and Sales/Marketing. Medium-sized companies are looking towards Technology then Analytics in the next 12 months. After Technology, small companies have the greatest need in Operations

• Actuarial and Analytics are the most likely areas for hiring in the Life/Health segment

0

1

2

3

4

5

6

7P&C Balanced P&C Commercial P&C Personal Life/Health

Most Likely

Least Likely


Likelihood of Increasing Staff by Function by Survey Period

Most in Demand Least in Demand

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0 Jan-21 Jan-20 Jan-19 Jan-18 Jan-17Most Likely

Least Likely


Employee Types Most Likely to be Added

Reason to Increase Staff during Next 12 Months

54%

36%

24%

24%

23%

22%

20%

20%

15%

14%

7%

43%

64%

76%

73%

77%

78%

76%

76%

83%

86%

82%

2%

3%

4%

5%

2%

11%

Operations

Claims

Actuarial

Overall

Compliance

Sales/Marketing

Underwriting

Accounting

Analytics

Technology

Product Management

By Function

Entry Experienced Management/Executive*Percentages above rounded to nearest whole number

8%

10%

11%

28%

35%

44%

53%

0% 10% 20% 30% 40% 50% 60%

To Correct the Manager to Staff Ratio

Other

Reorganization

Improve Service Delivery

Expansion of Business/New Markets

Anticipated Increase in Business Volume

Areas Currently Understaffed


Reason to Decrease Staff during Next 12 Months

Flexible Options for Employees When Offices Reopen From COVID-19

3%

3%

4%

9%

13%

15%

19%

0% 10% 20%

Other

Contraction of Business/Discontinuing Operations

To Correct the Manager to Staff Ratio

Anticipated Decrease in Business Volume

Areas Currently Overstaffed

Automation Improvement Requiring Fewer Staff

Reorganization

8%

8%

53%

48%

77%

4%

5%

47%

56%

77%

0% 20% 40% 60% 80%

Other

No Changes

Flexible Hours

Full-time Remote

Occasional Work-from-Home

January 2021 July 2020

About the Jacobson Group

The Jacobson Group is the leading provider of talent to the insurance industry. For 50 years, Jacobson has been connecting organizations with insurance professionals at all levels across all industry verticals. We provide an array of services including executive search, professional recruiting, temporary staffing and subject matter experts. Regardless of the need or situation, Jacobson is the insurance talent solution. Further information is available at jacobsononline.com.

About Ward

Ward is the leading provider of benchmarking and best practices studies for the industry. We analyze staff levels, compensation, business practices and expenses for all areas of company operations and help insurers to measure results compared to peer groups, optimize performance and improve profitability. Since 1991, we have performed more than 3,000 operational and compensation benchmarking exercises for companies of all sizes.

Ward is part of Aon plc (NYSE: AON). For more information, please visit ward.aon.com.

Contact Information

Jeff RiederPartner, Head of Ward [email protected]

Greg JacobsonCEOThe Jacobson [email protected]

http://jacobsononline.com

http://ward.aon.com

mailto:jeffrey.rieder%40wardinc.com?subject=Labor%20Study

mailto:gjacobson%40jacobsononline.com?subject=Labor%20Study

LABOR STUDY RESULTS - Jacobson

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