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Jobs growth expected as insurers foresee higher revenues

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Nearly half of the insurers participating in a recent insurance industry labor market study indicate they plan to add employees in 2010, largely to address anticipated business growth.

And, contrary to the views of many industry analysts, the Jacobson/Ward Group Insurance Industry Labor Market Study finds a healthy majority of the insurance companies surveyed anticipate revenue growth this year.

The survey, conducted in January by the Chicago-based staffing and executive search firm Jacobson Group and Cincinnati-based consulting firm Ward Group, collected information from 150 U.S. insurance companies. It's the second such survey, with Jacobson and Ward planning to conduct the surveys each January and July.

In the most recent survey, “44% of the companies surveyed expect to increase staff in 2010, while only 13% expect to decrease staff,” said Greg Jacobson, co-CEO of the Jacobson Group in Chicago. “In particular, sales and marketing positions have the greatest likelihood of staff expansion.”

In the July 2009 Jacobson/Ward survey, 34% of companies indicated they planned to add staff. Meanwhile, 22% of those surveyed in July anticipated staff reductions.

“We do expect fewer staff reductions and, in general, there are not many substantial layoffs expected,” said Jeff Rieder, president of Ward Group in Cincinnati. In the January survey, “only two companies expected to make staffing reductions greater than 10%,” he said, with both of those the result of reorganizations rather than declines in business volume.

Of companies planning to reduce staff in the January survey, 27% attributed the reductions to automation improvements and 19% said the cuts would address areas of the business that were overstaffed.

“We also expect staffing increases to proceed at a greater rate in 2010 than 2009,” Mr. Rieder said. “National carriers are 15% more likely to be adding staff than their regional counterparts.”

In addition, “I was very surprised to see that 63% of companies expected revenue increases in 2010,” Mr. Rieder said. “It's counter to what many outside analysts and experts project.” The figure is up from 54% of companies that anticipated revenue increases in the July 2009 survey.

“Companies are more optimistic about their own results than the outside experts are,” the Ward Group president said. “That may also be why they're projecting growth in staff.”

Companies surveyed reported the most difficulty recruiting actuarial employees and executives, but those surveyed in January generally indicated it was easier to recruit needed talent than companies reported last July. Recruiting technology employees also remains a challenge, according to the January survey, particularly for regional insurers.

The January survey also found that property/casualty companies reported 12% greater difficulty in recruiting needed staff than did life/health companies. That difference might reflect the fact that there is a larger pool from which to recruit in the life/health side of the industry than in the property/casualty side, Mr. Rieder said. “The data really show you that recruiting is not easy for property/casualty.”

The 150 insurance company participants in the January Jacobson/Ward study averaged 1,516 employees. Of the participants, 122 were property/casualty companies and 28 were life/health.

Ultimately, based on the January survey results, Jacobson and Ward project a nearly 2% increase in U.S. insurance industry employment in 2010, resulting in approximately 26,500 new jobs, based on a baseline of nearly 1.4 million insurance company employees.

“I think we're really excited about being able to come up with a number like that,” Mr. Jacobson said. “We believe that this is the only study that gives a forward-looking insight into the insurance industry's labor market.”