The Insurance Industry’s
“Talent Gap”
Griffith Foundation
Insurance Education & Career Summit
Atlanta, GA
September 25, 2011
Steven N. Weisbart, Ph.D., CLU, Senior Vice President & Chief Economist
Insurance Information Institute  110 William Street  New York, NY 10038
Tel: 212.346.5540  Cell: 917.494.5945  stevenw@iii.org  www.iii.org
The Industry Employs
Younger Workers in
Proportion to their Numbers
in the Labor Force
2
Age Distribution: P-C Workers
vs. the U.S. Labor Force, 2008
100%
6%
13%
17%
30%
29%
17%
75%
32%
20%
14%
23%
39%
50%
23%
26%
25%
27%
40%
25%
27%
22%
11%
14%
Reinsurers
U.S. population
65+
55-64
45-54
35-44
25-34
16-24
23%
0%
Personal Lines
carriers
Commercial
Lines Carriers
Brokers
It appears that the workers at P-C personal lines carriers are, in general,
younger than, and commercial lines employees and brokers are no older
than, the U.S. workforce in general.
Only reinsurance workers might be a little older
Sources: McKinsey, Building a Talent Magnet, Exhibit 2; BLS; Insurance Information Institute
3
Does the P/C Insurance
Industry Pay as Well as
Other Employment?
5
Average Hourly Earnings, Employees in
Selected Financial Services, Mar 2006*–May 2011
P-C carriers
Commercial banking
Ins Agents & Brokers
Securities brokerage
$40
$35
$30
$25
Jun 11
Mar 11
Dec 10
Sep 10
Jun 10
Mar 10
Dec 09
Sep 09
Jun 09
Mar 09
Dec 08
Sep 08
Jun 08
Mar 08
Dec 07
Sep 07
Jun 07
Mar 07
Dec 06
Sep 06
Jun 06
Mar 06
$20
From April 2007 through October 2009, average hourly earnings at P/C insurers
were essentially flat at about $29. In the 21 months since then, average hourly
earnings grew by roughly $3 (nearly 10%), but lost $1 in June and July 2011
*start of BLS series; not seasonally adjusted
Source: http://data.bls.gov/PDQ/servlet/SurveyOutputServlet
6
Can We Attract New Hires
to a Shrinking Industry?
7
U.S. Employment in the Direct
P/C Insurance Industry: 1990–2011*
Thousands
525
500
475
As of May 2011, P/C insurance industry employment
was down by 33,600 or 6.8% to 457,500 since the
recession began in Dec. 2007 (compared to overall
US employment decline of 5.2%).
450
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
*As of May 2011; Not seasonally adjusted; Does not including agents & brokers.
Note: Recessions indicated by gray shaded columns.
Sources: U.S. Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institute.
8
U.S. Employment in the
Reinsurance Industry: 1990–2011*
Thousands
48
44
40
As of May 2011, US employment in
the reinsurance industry was up by
400 or 1.5% to 27,300 since the
recession began in Dec. 2007
(compared to overall US
employment decline of 5.2%).
36
32
28
24
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
*As of May 2011; Not seasonally adjusted; Does not including agents & brokers.
Note: Recessions indicated by gray shaded columns.
Sources: U.S. Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institute.
9
U.S. Employment in Insurance
Claims Adjusting: 1990–2011*
Thousands
Katrina, Rita, Wilma
60
From 1990 to 2008, the number of
claims adjusters grew by an average
of about 1.5% per year. Some of this
slow growth may be due to use of
new technology.
55
50
45
Jan-11
Apr-10
Jul-09
Oct-08
Jan-08
Apr-07
Jul-06
Oct-05
Jan-05
Apr-04
Jul-03
Oct-02
Jan-02
Apr-01
Jul-00
Oct-99
Jan-99
Apr-98
Jul-97
Oct-96
Jan-96
Apr-95
Jul-94
Oct-93
Jan-93
Apr-92
Jul-91
Oct-90
Jan-90
40
Since October 2008, when employment peaked at 56,200, about 8,000 adjuster jobs were
shed. Some of this may be due to strategies to pay small claims without adjustment.
*As of June 2011; Not seasonally adjusted.
Note: Recessions indicated by gray shaded columns.
Sources: U.S. Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institute.
10
Is the Recent Decline
in the Number of
Agents/Brokers
Temporary or Permanent?
Is it a Result of a Trend
to Online Shopping for Insurance?
11
U.S. Employment in Insurance
Agencies & Brokerages: 1990–2011*
Thousands
700
650
600
550
As of May 2011, employment at
insurance agencies and brokerages
was down by 37,900 or 5.6% to
641,700 since the recession began in
Dec. 2007 (compared to overall US
employment decline of 5.2%).
500
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
*As of May 2011; Not seasonally adjusted. Includes all types of insurance.
Note: Recessions indicated by gray shaded columns.
Sources: U.S. Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institute.
12
Ideally, Where Do Young
People Want to Work?
13
Top 150 Organizations Where Young
Professionals Want to Work
Group
Top 50
Ranked
51-100
Ranked
101-150
Insurers
Organization (% naming)
Google (#1: 24.8%) Apple (#2: 13.5%)
Disney (#3: 9.4%) U.S. State Department (#4: 9.3%)
Amazon (#5: 8.8%) FBI (#6: 8.3%)
Berkshire
Nordstrom (#51: 2.3%) U.S. Air Force (#52: 2.3%)
(#61: 2.1%)
Federal Reserve Bank (#53: 2.2%)
USAA (#81: 1.65%) Accenture (#54: 2.2%) Time Warner (#55: 2.2%)
Liberty Mutual
(#126: 0.65%)
Travelers
(#128: 0.64%)
NY Life
(#130: 0.51%
Hartford
(#135: 0.45%)
Munich Re
(#143: 0.16%)
Sources: Universum survey of 10.306 professionals with 1 to 8 years of experience, November 2010-January 2011,
at http://online.wsj.com/public/resources/documents/st_COMPANIES0321_20110321.html
14
How Will We Know We’ve
Closed the “Talent Gap”?
By Attracting People from the Most
Prestigious Universities?
15
Top 10 Insurance Companies, CEO’s
and College Information
Rank
1
Company
Berkshire Hathaway
CEO
Warren E. Buffett
College
Columbia Business School
University of Nebraska–Lincoln
2
American International Group
3
State Farm Insurance Cos.
4
MetLife
Robert H. Benmosche Alfred University
Edward B. Rust Jr.
Southern Methodist University
Steven A. Kandarian Clark University
Georgetown University Law Center
Harvard Business School
5
6
Prudential Financial
New York Life Insurance
John R. Strangfeld Jr. Susquehanna University
Darden School of Business at the University of
Virginia
Theodore A. Mathas Stanford University
University of Virginia
7
Liberty Mutual Insurance
Group
Edmund F. Kelly
Queen's University, Belfast
Massachusetts Institute of Technology
8
TIAA-CREF
9
Allstate
10
Massachusetts Mutual Life
Insurance
Roger W. Ferguson Jr. Harvard University
Northwestern University's J.L. Kellogg
Thomas J. Wilson
Graduate School of Management
Roger W. Crandall
Degree/Major
MS in Economics
BS in Business Administration
BS in Mathematics
JD & MBA
BA
JD
MBA
BS in Business Administration
MBA
AB
JD
Bachelor's Degree
PhD
B.A. in Economics magna cum
laud,JD & PhD
Masters degree in management
University of Michigan
BS in Business Administration
University of Vermont
Bachelor's degree in Economics
Note: Top companies as featured in Fortune 500. Source: Insurance Information Institute.
16
Insurance Information Institute Online:
www.iii.org
Thank you for your time
and your attention!