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Latest Insurance Talent Perspectives

Building and Maintaining a Strong Employer Brand

In today’s competitive labor market, a strong employer brand is a key differentiator in recruiting top talent, reducing costs, enhancing the candidate pool, and retaining high performers by instilling pride in their roles and company. 

View our latest white paper for tips to ensure your company represents itself as an employer of choice.

Q3 2024 Insurance Labor Market Study Results

The Jacobson Group and Aon conduct a Semi-Annual Insurance Labor Market Study to examine industry hiring and revenue trends and projections. The findings of our Q3 2024 iteration reflect a relatively stable labor market, with modest job growth.

Download the results to explore 2024’s staffing forecasts and hiring plans for the insurance industry.

Combatting the Finance and Accounting Talent Shortage

Faced with a shallowing pool of emerging talent and a workforce nearing retirement, finding qualified accounting and finance professionals has been an intensifying challenge for the industry. A comprehensive multi-prong approach is necessary to cultivate a workforce that can meet evolving demands and ensure operational continuity.

Read our blog post for insights on staying ahead of the growing finance and accounting talent crisis.

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The ROI of Succession Planning

At the National Association of Mutual Insurance Companies (NAMIC) Operations Conference this year, we moderated a panel on a topic that we here at Jacobson hold close: succession planning. We brought a dynamic panel of CEOs and a board chairman together to share their personal insights gleaned from all stages of the succession process. The speakers provided valuable insights from their own succession journeys. Perhaps one of the most interesting takeaways shared came from an audience member. Lee Webster, Director of Human Resources Standards with the Society for Human Resource Management (SHRM), brought up the ROI of succession planning—certainly an issue that deserves a deeper look. The measurement of the ROI of a succession planning process is a vital component that allows organizations to evaluate and adjust. As Webster said, “The succession planning dialogue must include a progressive and dynamic component on the effect of choosing the right leader, as well as the effect the leader has on the capital value of the enterprise. We must create the opportunity to look at risks from a human capital point of view. When we focus on the return, we can begin to account for how well we are doing.” This is certainly interesting food for thought for the insurance industry as the industry faces up to the challenge of an aging workforce. As the industry strengthens its talent pipeline, we must keep the end goal in sight by continuously measuring the value of our succession and engagement strategies.

Impacts of the Supreme Court Validation of PPACA

With its ruling released on June 28th, the Supreme Court has, absent an unexpected legislative repeal, cemented the Patient Protection and Affordable Care Act (PPACA) into U.S. law. Now that the judicial challenges have run their course, there is some clarity around the impacts this law will create. In the short term, I view this development as moderately positive for the health Insurance industry and perhaps even stimulative for the health insurance labor market. Over the past several months, as the uncertainty around the Supreme Court decision grew, I have seen countless health insurance decision makers put developmental projects on hold until some clarity emerged. I now expect a bit of a dam break in the flow of these projects. Additionally, health insurers can now plan for an expected increase in covered lives due to the survival of the “individual mandate tax.” Together, these impetuses should lead to a modest, industry-wide uptick in hiring over the near term. Moreover, the industry avoided what would have been a major negative shock had the Supreme Court struck down the individual mandate but upheld other aspects of the law including the “Guaranteed Issue” provision. My view of the longer term impacts of this law is less sanguine. The health care crisis in this country is a crisis of cost, not one of evil health insurers who need to be reigned in via a central authority dictating the terms of their market. Throughout history, central control of markets has invariably led to mal-investment, skewed markets and unintended consequences. I have argued since 2009 that the health care cost crisis needed to be solved with market friendly reforms that took advantage of the immense power of capitalistic choice (aka consumerism). One can make a strong argument that the seeds of our cost crisis were planted by the very body that passed the PPACA, as the endless stream of Washington generated coverage mandates, managed care restrictions and cost-less (to the consumer) benefit increases led to an economic imbalance that ensured consistent health care cost inflation. The long-term consequences of yet more market interference is not in doubt. We will see continued and likely accelerated, cost escalation. Further, the medium to long-term marginal impact of this law on the labor market will clearly be negative. For all the talk of job creation, every high school economics student understands that an increase in tax decreases economic activity. In this case we have both an individual tax and a tax on employment – and one that will disproportionately impact the segment of the economy most responsible for job growth: small businesses. All that said, this is not the first time that lawmakers – in their zest to improve the conditions of their constituents – have passed counter-productive laws. Even with the PPACA, the United States continues to have one of the most supportive economies for entrepreneurship and innovation. I expect that our health insurance organizations and other businesses will learn to innovate within the framework of the new law and our economy will continue to outpace the rest of the developed world.

On Death and Taxes

Our business at times offers great insight into the concerns of the industry. Unusually large numbers of ‘permanent’ job openings in a specific area across multiple organizations usually mark a shift in industry trends. For instance, the growth of the use of predictive modeling, primarily in P&C personal lines, led to an emphasis on recruiting financial and data mining expertise. Unusually large numbers of temporary positions often mark an industry-wide reaction to an event or series of events. The latest trend in the life insurance industry is clearly related to a number of state government actions known collectively as “Death Master” settlements. In a bid to raise revenues, many states have aggressively pursued “unclaimed property” on behalf of their citizens. Most states have taken the stance that they can collect such property and then spend the money on whatever budget shortfalls they have. If the property is later claimed by the rightful owner, the states make good on the claim. However, in most cases this never happens (I have seen different numbers on this, but it seems like the high end for return rates is about 30 percent) and the funds become part of the state’s general fund. As we all know, states have become more and more desperate to raise revenue to avoid benefit cuts. The latest hunting ground has proven to be unpaid life insurance policies. Just this week, MetLife agreed to a $500M settlement with California, North Dakota, Florida, Illinois, New Hampshire, and Pennsylvania to settle claims by these states that MetLife failed to use the Death Master index to identify deceased policyholders. This is simply the latest (and largest) in a line of these settlements going back to the Manulife settlement in April of last year and including the well-publicized Prudential Life settlement in February of this year. I expect more to come. As part of these settlements, the insurers are typically required to perform quite a bit of research on beneficiaries, and this is where we have seen tremendous demand. Many of our clients are now trying to get ahead of the curve and are instituting procedures similar to those required in the Prudential settlement. Others are simply reacting to state investigations. In either case, the demands upon the claims departments are often overwhelming.

Homework: Insights on Telecommuting

My two youngest children are home from school today due to a scheduled day off. Because my wife has returned to college to prepare for her next career, one in healthcare, I volunteered to work out of my home office. There are certainly advantages to doing so: the elimination of the commute and the ability to work on projects with limited interruption (well, maybe it’s just a different kind of interruption) are the first that come to mind. I am fortunate that The Jacobson Group runs large work-at-home projects for our clients, because that means we have the technology and expertise in place to make my telecommute pretty simple. If you are a regular reader of our newsletter or participate in our industry-focused webinars, then you know that we have been talking a lot about work-at-home lately. Interestingly, but not surprisingly, this topic has been our most popular in a while. We have seen a significant boost in telecommuting in the past two years. The number of telecommuting projects that we run on behalf of our clients has exploded over the past 24 months, and these arrangements now make up roughly 40% of our projects. This shift is not surprising considering the need to manage costs carefully these days. On the ‘permanent’ side of the labor market, we have also seen a pretty significant change, though that change began in earnest 20 years ago and has been more gradual. These days, virtually every management role we fill, involves the oversight of offsite staff, nearly always including some telecommuters.

Hurricane Season Predicted to Heat Up

Last week, Business Insurance published updated projections from Colorado State University’s Tropical Meteorology Project and from NOAA (National Oceanic Atmospheric Administration). Basically, both organizations expect storm season to heat up any day now and are still expecting a rather active season – CSU calls for ten hurricanes; NOAA calls for eight to twelve. We are seeing an interesting dynamic occurring as the industry prepares for the height of the hurricane season. We typically have a number of clients who work with us to proactively prepare their catastrophe response by staffing up their operations as the season approaches. This year we are seeing a lot more activity than normal. This dynamic is not surprising considering the changes over the past several years. Looking at employment segments within the property and casualty industry, we saw the most significant losses of jobs within claims adjusting (NAICS 524291) organizations. Employment peaked in October of 2008, with 56,200 and, as of June 2010, had fallen to 43,500, a loss of 22.5% in less than two years. Taking this information as a proxy for all P&C claims employment is perhaps a bit of a stretch, as one could argue that perhaps carriers had in-sourced much of this activity. However, during the same period, employment at P&C carriers declined by just over 5%; and our experience in the industry confirms anecdotally a sharp drop in overall claims employment. With an expected increase in storm activity and claims organizations extremely lean, we expect strong demand for claims experts as the summer progresses. So far, it seems that the industry agrees. I’ll keep you posted as to how this plays out.

Labor Market Direction Question from Compass

I penned the article in this quarter’s Compass, our executive newsletter, detailing my thoughts on the labor market recovery and expanding on some of the ideas you have read about in this blog. The response to this article has been terrific – and we really appreciate the feedback – and included a thought-provoking question that happened to be asked by a few different people. I’ll paraphrase: Does the rise in temporary employment really suggest general job growth or is this a reflection of a new paradigm in the labor market whereby organizations shift their labor mix toward temporary staff? This is an intriguing hypothesis and one that I have heard about before. Even the SIA has recently predicted higher temporary penetration rates than ever before in the future. That said, I remain skeptical that we are seeing the beginning of a new paradigm and that the growth in temporary jobs since September portends anything markedly different than what it has meant in the past: coming job growth. The nature of a dynamic economy is to reward specialization and efficiency. It is accepted fact that both of those traits require workers who know and understand the niches or micro-niches they serve very well, but I further postulate that organizational knowledge is equally important for most day-to-day business. While I believe strongly in the value that can be provided by temporary expertise at all levels – for the very same reasons of specialization and efficiency – much of the knowledge required by organizations for day-to-day business is organization-specific; thus it is hard for me to envision a wholesale change in the current balance between temporary and more traditional employment. As I pointed out in the Compass article, the numbers seem to be just now starting to affirm the job growth story. This morning we had one more piece of confirmation – the NABE (National Association of Business Economists) released their April Industry Survey, which highlighted expected job growth. Within The Jacobson Group, we continue to see demand for both temporary and traditional staff at much higher levels than 2009. What are you seeing?