The Great Recession put a sizeable dent in the employment of independent insurance agents and brokers, but the sector has shown itself to be the industry’s “comeback kid.”
According to a new report from the Bureau of Labor Statistics, the agent/broker segment gained 24,900 jobs in October of this year—up 3.7% from the same period last year—and has now passed its pre-recession peak of 684,500 reached in July 2007.
Agents and brokers, like other insurance industry sectors, shed a significant number of jobs in the early part of the recession. Employment for July 2009, the first month of the recovery, was down to 652,900 after a job count of 682,100 during the first month of the recession, December 2007.
The Insurance Information Institute believes the trends reflect growth in youth employment, as well as increased demand due to the changing risk landscape.
“From our perspective, things are getting better on the employment front,” said III spokesperson Loretta Worters. “Many young people, who have traditionally been interested in finance and banking, are starting to see the opportunities in this industry.”
As a result, Worters said, the employment of insurance agents is expected to grow through 2018.
Before independent agencies break out the champagne, however, a word of warning is necessary. A
recent study from the Center for American Progress found that for positions earning less than $75,000 a year—including most insurance producer positions—the cost of turnover is roughly 20% of the positions salary.
That means the cost of a bad hire is roughly $9,490 for the average independent agency.
To avoid turnover costs and enjoy the employment boom, Worters recommended hiring agents “who are multilingual and those who have a strong knowledge of relevant technical and legal terms.”
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