Fourteen percent of insurance companies plan to decrease staff in the next 12 months while also 79% are projecting a revenue increase during the same timeframe, according to a recent Insurance Labor Market Study released by Aon and The Jacobson Group. 

During a webinar last week, Jeff Rieder, Aon partner, said that a 14% staff reduction is larger than the industry has seen in recent years. 

“We haven’t seen those numbers since the post-recovery time from the last recession during the 2008 to 2012 time period,” Rieder said. 

There could be a few reasons why companies are predicting revenue increases and staff reductions. He said companies could be concerned by an upcoming recession. 

Companies that are rebalancing portfolios, such as pulling back or removing personal lines, could find some of their staff including claims processing or customer service aren’t needed, he said. 

This could also be true for companies that have pulled out of states like California because they haven’t received rate increases needed for profitability, Rieder said. 

Some companies also might be expecting profit from rate increases while they decrease their underlying exposure, he said. Staffing requirements could be lowered with fewer customer counts, he said. 

Greg Jacobson, Jacobson Group CEO, said companies also appear to be reducing staff at higher percentages than previously planned. 

Insurance companies said they planned to reduce staff by 10% in an Insurance Labor Market Study from February, Jacobson said. Yet, companies reduced staff by 18%. 

“Personal lines are driving the reduction of staff,” Jacobson said. “We are still seeing hiring in commercial lines and maybe more so in life and health lines.” 

Rieder and Jacobson agreed that anyone displaced from personal lines would likely find a job somewhere else in the industry. 

Jacobson said there’s been a shift of staff moving between carriers to brokers. He said this wasn’t something seen often in the industry prior to about five years ago. 

“Some of the growth in jobs overall for the industry is still there, but maybe not as much on the carrier side as it used to be,” Jacobson said. 

About 83% of participants in the study represent property and casualty insurance companies, Jacobson said. Another 14% represent life and health insurance companies and 3% represent reinsurers. 

Forty-seven percent of respondents represent a company with less than 300 employees, 20% represent companies with 300-1,000 employees and 33% represent companies with more than 1,000 employees. The total average number of employees is 1,640, a webinar presentation says. 

While 78% of insurers predict an increase in revenue, 21% expect revenue to stay flat. One percent are projecting a decrease in revenue, according to the presentation. 

Fifty-six percent of the respondents plan to increase staff and 37% plan to maintain staff, the presentation says. 

Nationwide recently announced it plans to cut 5% of its workforce over the next year, according to a statement the insurance company previously provided. 

The layoffs will result from global sourcing partnership expansions within its property and casualty and technology departments. Some positions will be moved to the new partners, some within Nationwide, and some eliminated.

“As markets change and the company continues our modernization journey, we are positioning our Property & Casualty and supporting technology teams to serve our members and agents for years to come,” Nationwide said. “These periodic business strategy updates typically include shifts in staffing — with some areas increasing and others decreasing — based on evolving business needs.

P&C insurers represented the largest portion of insurance-related layoffs in 2023, according to an S&P Global Market Intelligence analysis released in December.

At least 6,800 jobs were cut throughout the year in the P&C space with 20 companies trimming back on staff to “refocus their businesses or decelerate cash burn.”

Farmers Insurance topped S&P’s list of layoffs after the company let go of 2,400 people in August, or 11% of its employees across all its business lines. It said at the time that it was shifting to a “more simplified and streamlined organizational structure.”

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