Insurance Industry Job Outlook

Demand for insurance will increase, but employment in the insurance industry will increase more slowly than employment growth across all industries.

Wage and salary employment in the insurance industry is projected to grow about 3 percent between 2008 and 2018, compared to the 11 percent growth projected for wage and salary employment in all industries combined. While demand for insurance is expected to rise, job growth will be limited by industry consolidation, corporate downsizing, productivity increases due to new technology, and increasing use of direct mail, telephone, and Internet sales. Additionally, the recent financial crisis has resulted in large losses for the insurance industry, phenomena that will result in more prudent risk management and lower revenues. However, insurers should rebuild their capital and continue to expand into the broader financial services field, resulting in some job growth.

Significant growth is expected over the long term, even though increasing health insurance premiums have recently become difficult for some people to afford. As the members of the baby boom generation grow older and a growing share of the Nation's population moves into the older age groups, more people are expected to buy health insurance and long-term-care insurance, as well as annuities and other types of pension products sold by insurance sales agents. If reforms are enacted that makes health insurance affordable to more people, the number of people covered by some form of health insurance will likely be affected.

Population growth also will stimulate demand for auto insurance and homeowners insurance. Also, population growth will create additional demand for businesses to service the needs of more people, and these businesses will need insurance as well. In addition, growing numbers of individuals and businesses are purchasing liability policies to protect against possible large awards from lawsuits brought by people claiming injury or damage from a product.

Many successful insurance companies will recognize the Internet's potential as a powerful marketing tool, increasing employment growth of some occupations while slowing growth of others. Growing use of the Internet might reduce costs for insurance companies, but it also could enable many clients to turn first to the Internet to get information on their policies, obtain price quotes on possible new policies, or submit claims. As insurance companies begin to offer more information and services on the Internet, employment in some occupations, such as insurance sales agents, could be adversely affected.

Productivity gains caused by the greater use of computer software will continue to limit the growth of certain jobs within the insurance industry. For example, upgrades to underwriting software have helped increase underwriter productivity. Automated underwriting quickly rates and analyzes insurance applications, reducing the need for underwriters. In addition, adoption of this technology into other segments of insurance, such as life and health and long-term care, will result in declining employment of underwriters. Workers in claims now may not have to visit the site of customers' damage; they may use satellite imagery to inspect the damage from their computers. In addition, the Internet allows insurance investigators to handle an increasing number of cases by drastically reducing the amount of time it takes them to perform background checks, limiting the additional investigators that must be hired to handle a growing workload. Also, computers have made communications easier among sales agents, adjusters, and insurance carriers—making all much more productive—by linking them directly to the databases of insurance carriers and other organizations. Furthermore, insurance carriers contain costs by increasing using customer service representatives to deal with the day-to-day processing of policies and claims.

Workers in property and casualty insurance, particularly in auto insurance, will be most affected by increasing reliance on the Internet. Auto policies are relatively straightforward and can be issued more easily without the involvement of a live agent. Also, auto premiums tend to cost more per year than do other types of policies, so people are more likely to shop around for the best price—and the Internet makes it easier to compare rates among companies.

Insurance companies will continue to face increased competition from banks and securities firms entering the insurance markets. As more of these firms begin to sell insurance policies, they will employ increasing numbers of insurance sales agents. In order to stay competitive, more insurance companies are expanding the range of financial products and services they offer, or are establishing partnerships with banks or brokerage firms.

Although employment in the insurance industry is expected to grow slowly, thousands of openings are expected to arise reflecting the need to replace workers who leave the industry, retire, or stop working for other reasons. Despite the fact that the internet allows many people to buy policies online, many sales agents still will be needed to meet face-to-face with clients; some customers prefer to talk directly with an agent, especially regarding complicated policies. Opportunities will be best for sales agents who sell more than one type of insurance or financial service. Opportunities should be good for adjusters because they will still be needed to inspect damage and interview witnesses as the insurance industry, the Nation's population, and the number of claims all grow. Even though the number of available jobs will be small, opportunities should be good for qualified actuaries because many people are discouraged from following this career path due to the stringent requirements of the examination system.

Source: Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2010-11 Edition