Despite relatively stable employment trends in the bulk of the insurance industry, the agent and broker sector is humming along at a healthy pitch. In fact, recent trends indicate producers will soon hit a historic job growth peak.
According to recently published data from the US Labor Department’s 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 positions 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.
“The number of agents and brokers before the Great Recession had been increasing pretty consistently since ’92 or ’93,” said Dr. Steven Weisbart, chief economist with the Insurance Information Institute. “During the Great Recession, there was a major cutback and about 50,000 agency jobs disappeared but they’ve almost all come back now in the past three years.”
Weisbart noted that the growth trend is continuing despite “some forecasts that people would be buying insurance over the internet.”
“That’s not true at all—at least at the moment,” he said.
The new job growth is particularly welcome, given concern over aging trends among producers. According to management consultancy MarshBerry, the typical independent agency owner turned 53-years-old in 2012 and the average producer, 48.
That would take three young producer hires for every producer currently employed in order to maintain the same number of independent agents and brokers by 2020. So far, it seems those standards are being met.
“Obviously if the baby boomer generation was simply being replaced, it would just be different people filling those jobs and the numbers would stay the same, but they’re not,” Weisbart said. “The economy is continuing to grow, so there’s more demand for insurance and as long as agents and brokers play a constructive role in helping those who need it get insurance, I think companies will continue to employ them in increasing numbers.”
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.”