Market shifts and technology advances might be cutting employment levels at some life, health and annuity issuers.
Analysts from the Jacobson Group, Aon and Aon's Ward unit published insurance company hiring survey data raising that possibility last week.
About 30% of the participants at life, health and annuity issuers who were polled in July said their companies had cut staffing levels over the previous 12 months.
Roughly 70% increased staffing, and none held headcounts steady.
A year earlier, 69% of the executives polled expected to increase staffing, 25% expected to stay the same size and only 6% thought their companies would shrink.
Jeff Rieder, a partner at Aon, said during a webinar that Aon and Jacobson held to go over the latest survey results that he thinks that one driver might be issuers' high-level strategic decisions.
"Some of this may be influenced by the product focus within those organizations," Rieder said.
In other cases, he said, reductions in force might be driven by factors such as decisions to let employees spend at least part of the week working at home.
Insurers with more employees working at home may need fewer support personnel in the office, Rieder said.
What it means: Life, health and annuity issuers could be facing a bigger divide between the organizations with growing staffing and those with shrinking staffing.
It's not clear from the survey data and the webinar whether the shrinking organizations are becoming more efficient, and making more money with fewer people, or are facing dwindling market share.
If shrinking headcounts reflect dwindling market share, rather than increased efficiency, that could be a sign that about 30% of life, health and annuity issuers are under stress. Issuers under stress might offer better deals but have less ability to meet long-term benefits obligations.
The big picture: The number of finance and insurance job openings reported by the U.S. Bureau of Labor Statistics fell to 307,000 in June.
That was down from a 2022 peak of 393,000 but higher than the monthly average reported for any year before the start of the COVID-19 pandemic.
The percentage of life, health and annuity executives who expect their companies' revenue to grow in the next 12 months has increased to 90%, from 75% in July 2024.
The executives are predicting that their companies' total staffing will rise 0.97% over the next 12 months. That's down from 1.47% in July 2024 but up from 0.42% in January.
About 60% think their companies will increase staffing over the next 12 months, 30% think they will stay the same size and 10% think they will shrink.
Who's hot: When the survey team asked the life, health and annuity executives about the likelihood of increasing staff by function, the executives were most likely to say they would expand technology and analytics teams.
They were least likely to say they would expand compliance and loss control teams.
Layoffs: Some insurers have implemented big reductions in force over the past few years, and some have talked recently about implementing new reductions in force.
Rieder of Aon said during the results presentation webinar that he thinks reduction-in-force activity may decrease.
Announcements about big reductions in force do not necessarily lead to large numbers of actual job cuts, he said.
"Oftentimes, it's fewer than 200 employees, or maybe 100 employees, or maybe 50 employees here and there," Rieder said.
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