By Josh Chetwynd
A major worry for Connecticut’s economy is the fact that the state’s insurance industry employment numbers haven’t rebounded since the start of the nation’s most recent recession, according to top Connecticut government economists.
Patrick Flaherty, the Assistant Director of Research and Information for the Connecticut Department of Labor, told guests at the Connecticut Business and Industry conference on Sept. 11 that the combined finance and insurance businesses have “recovered less than 15% of the jobs lost” since the economic downturn, which began in December 2007.
In a follow-up discussion with IBAmag.com, Flaherty provided numbers showing just how hard hit the insurance business has specifically been in the state. During the fourth quarter of 2007, which was the first quarter of the recession, insurance carriers and related business boasted 65,315 jobs; during the first quarter of 2015, that number was 56,233.
Despite Flaherty’s initial response at the conference about the worrisome nature of this drop, he emphasized that the situation should not be considered dire, indicating a number of less-than-disheartening potential reasons for the dip.
“I disagree with the word struggling,” he said. “I don’t know why employment in this sector has lagged, but some possible explanations include continued productivity or technological improvements reducing the need for back office staff; consolidations and mergers; or eliminations of particular lines of business.”
In parsing the numbers, Flaherty was hopeful that some of the drop is a reflection of a simple reorganization by agents and carriers.
“There is some evidence that some insurance companies have outsourced some of their IT functions, reducing employment in the insurance industry although not necessarily leading to an overall reduction in jobs as the work is still being done [in state] but by folks whose employers are IT consulting companies,” he said.
Nevertheless, Flaherty indicated that while this downturn may not reflect any difficulties individual agencies or carriers in the state may be suffering, he did believe that the drop is something to watch carefully.
“Fewer employees in finance and insurance working in Connecticut means fewer people earning the wages paid by that sector in our state,” he said.
