Dire predictions in the insurance agent and broker sector—including McKinsey & Co.’s suggestion that one-fourth of the industry’s workforce will retire by 2018—may not actually come to fruition.
Thanks to an influx in hiring activity and the reticence of baby boomers to retire, economist Dr. Steven Weisbart with the Insurance Information Institute believes an oncoming employment crisis is not in the cards. In fact, the situation may be just the opposite.
According to a March report from the Bureau of Labor Statistics, the agent/broker sector gained 12,500 jobs in January 2014—up 1.9% from the same period last year—to a current total of 672,500 jobs in the life/health and property/casualty markets.
That’s just 2,400 jobs shy of the sector’s pre-recession peak of 684,500 reached in July 2007 and—if the trend continues—it is on track to outpace potential retirement in the future, says Weisbart.
“In some ways, we’re actually ahead of the pace,” Weisbart said. “The number of people working in the agent/broker category has been growing pretty amazingly rapidly. I’m pretty confident that both in the near term and longer term, there will be a good, healthy supply of agents to continue to perform the functions they have already been performing quite well.”
The growth of the labor force, particularly in the 65- to 69-year-old category, is also impressive. As producers remain productive into their 60s and even 70s, new lines of business will open up and new clients will emerge.
When these Baby Boomers do eventually retire, “we’ll probably have a pretty good supply o agents to replace them,” Weisbart said.
The only potential flaw in the system that Weisbart foresees is a major change in technology that would replace the function of agents and brokers. However, he concedes that while it is a possibility, “given what’s happening recently, it’s an unlikely possibility.”
