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Insurance Industry Sees Job Losses as 2008 Came to a Close

Source: AM Best Company

Posted on 12 Jan 2009

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According to seasonally adjusted data released on Friday by the U.S. Bureau of Labor Statistics, employment in the U.S. insurance industry plummeted by 5,200 jobs from November to December, as the industry closed out 2008 with 7,300 fewer positions than when it began.

For the month, the industry's payrolls fell to 2.309 million, from a seasonally adjusted 2.317 million in November, as the number of insurance jobs now has contracted in four of the past five months. Total non-farm payrolls, which fell all 12 months of 2008, were down 524,000 in December, while November's losses were revised upward to 584,000.

In total, the economy lost 2.6 million jobs in 2008, the steepest slide in more than 60 years, while the unemployment rate jumped to a 16-year high of 7.2%. The National Bureau of Economic Research has marked December 2007 as the recent peak of economic activity and the start of a recession.

Year-over-year, insurance payrolls moved into negative territory, down 0.3% from the 2.317 million jobs the industry recorded in December 2007, compared with a 1.9% decline for non-farm payrolls. The financial services sector was down 14,000 jobs from November to December, and the sector has shed 148,000 jobs over the past year, a 1.8% drop.

Total insurance industry payrolls are reported on a seasonally adjusted basis, along with the current month's non-farm payrolls, the first Friday of each month. Separately, data by industry segment — broken out by various insurance carrier and noncarrier categories — are available only on an unadjusted basis for the prior month.

Based on the just-released November 2008 data, reinsurers saw payrolls surge over the past year, up 13.2% from November 2007 to 31,800. Payrolls for health insurers rose 3.6% to 447,800, while claims adjusters were up 1.5% over the past year to 52,600; third- party administrators were up 0.9% to 133,000; life insurers were up 0.7% to 360,900.

Title insurers again saw the most significant job declines, down 11.5% to 78,800. Job losses also were seen among agents and brokers, down 1% to 671,000; property/casualty insurers, down 0.4% to 491,700; and in the "other" segment, which declined 4.5% to 48,800.

Average weekly earnings for the industry's nonsupervisory positions rose 6.8% from November 2007 to November 2008, from $828.06 to $884.71, and wages were up in all eight industry categories.

Life insurer employees saw the greatest gains, with weekly earnings rising 11.3% to $974.36. They were followed by title insurers, up 8.3% to $844.52; health insurers, up 7.2% to $928.23; claims adjusters, up 3.4% to $892.84; third-party administrators, up 1.9% to $787.05; and reinsurers, up 1.2% to $772.64.

The property/casualty segment remained the most highly compensated, with employees averaging $996.23 a week, up 6.1% from November 2007. Agent and broker employees were least well-compensated, but were up 3.6% to $748.75.