Posted on 09 Feb 2009
According to seasonally adjusted data released on Friday by the U.S. Bureau of Labor Statistics, the U.S. insurance industry shed 2,500 positions in January, as the overall unemployment rate surged to a 17-year high.
For the month, the industry's payrolls fell to 2.289 million, from a seasonally adjusted 2.292 million in December, as the number of insurance jobs now has contracted in five of the past six months. The agency's revised figures for December showed the industry had 17,000 fewer positions than the 2.309 million previously reported.
Total nonfarm payrolls were down 598,000 in January, the steepest single month drop since December 1975. Total job losses since the start of the recession in December 2007 have now topped 3.6 million, with roughly one-half of the decline seen in the past three months, BLS reported. The jobless rate climbed 40 basis points from December 2008 to 7.6% in January, the highest rate since September 1992.
Year-over-year, insurance payrolls fell 1% from the 2.312 million jobs the industry reported in January 2008, compared with a 2.5% decline for nonfarm payrolls. The financial services sector was down 42,000 jobs from December to January, and the sector has shed 255,000 jobs over the past year, a 3.1% drop.
Total insurance industry payrolls are reported on a seasonally adjusted basis, along with the current month's nonfarm 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 December 2008 data, reinsurers' payrolls grew the most over the past year, up 8.9% from December 2007 to 29,300. Payrolls for health insurers rose 3.9% to 459,300, while claims adjusters were up 2.5% over the past year to 53,300.
Life insurers' payrolls were exactly flat, at 354,300, while every other segment of the industry saw job losses. The most severe cuts were in the title insurance segment, which shed 16.5% of its employees in 2008 to end the year with 71,300.
Job losses also were seen among agents and brokers, down 2.9% to 659,600; third-party administrators, down 2% to 128,500; property/casualty insurers, down 1% to 486,000; and in the "other" segment, which declined 5.2% to 52,700.
Though average weekly earnings for the industry's nonsupervisory positions rose 2.5% from December 2007 to December 2008, from $851.20 to $872.38, wages actually fell in half of the eight industry categories.
Third-party administrators saw the steepest earnings decline, with wages falling 4.3% to $758.85 a week. Also seeing wage drops were claims adjusters, down 2.5% to $877.21; agents and brokers, down 2% to $735.78; and employees of reinsurers, down 1% to $757.77.
Making the biggest gains in earnings, possibly due to the segment having shed many lower-paying positions, were title insurance employees, whose average wages were up 7.7% to $829.58. Also gaining were employees of life insurers, up 7% to $956.78; health insurers, up 4.8% to $920.92; and property/casualty insurers, whose average wages remained the industry's highest at $980.44, up 1.6% from a year earlier.