Technology positions are some of the top roles that insurance carriers will seek to fill over the next 12 months but they will also some of the most difficult positions to recruit for, as the “War for Talent” within the industry starts to “overheat,” according to 2014 U.S. Insurance Labor Outlook Study by the Jacobson Group and Ward Group.
Technology topped the list as an area where carriers are most likely to increase staff, registering at 6.5 on a scale of 1 to 10, according to executives at the two companies, who on Tuesday discussed the survey’s results during a webinar. That score compares to 5.9 in the January 2013 study.
However, technology positions are also among the top five positions most difficult to fill, registering 6.5 in this year’s survey. It did fall slightly from last year’s score of 6.6.
The trend for those types of positions getting high marks in both survey questions over the past several years reflects the growing importance of the use of technology across all business functions, but particularly in underwriting, said Jeff Rieder, partner and head of Ward Group.
“We see a striking difference in the growth projections between the companies that have embraced technology versus those that have not,” Rieder said. “Underwriters that utilize technology can handle larger books of business.”
Other functions where carriers are most likely to increase staff include underwriting, which scored 5.7, compared 4.8 last year; and claims, which scored 5.2, unchanged from last year.
Actuarial scored highest on the list of functions most difficult to recruit for, with carriers rating the level of difficulty at 7.2, compared to 6.9 last year. Analytics scored 6.8, compared to 6.0 in the July, 2013 study, the first time the function was added to the semi-annual survey. Executives scored next on the list, at 6.8, compared 6.7 a year ago.
The overall labor picture for the insurance industry looks far better than the general U.S. workforce, said Gregory Jacobson, co-CEO of The Jacobson Group. While the U.S. unemployment rate is now 6.6 percent, the unemployment rate within the insurance industry is just 2 percent. Since April 2011, roughly 26,400 permanent jobs have been added within the industry, to total nearly 1.45 million.
“Employment within the industry is starting to overheat, creating increasing competition for workers,” Jacobson said.
Nearly two-thirds (62 percent) of carriers expect to increase staff during the next 12 months, almost 7.5 points higher than the July survey. Roughly half (55 percent) said the primary reason is due to an expected increase in business volume, while 48 percent account their increase to planned expansion into new markets.
Only 4 percent of carriers expect a decrease in staffing during the next 12 months nearly five points lower than in July, and the lowest point in the history of the survey. About a fifth (17 percent) of those cited automation as the primary reason for reductions in staff, far lower than the historical average of 21 percent.
The use of temporary workers will rise slightly over the next 12 months, with 15 percent of carriers reporting they expect to increase their temporary staff, while 13 percent intended to decrease temporary staff. Nearly three-quarters (72 percent) expect to maintain their levels of temporary workers.
Some of this holding pattern is attributable to the uncertainties over how the implementation of the federal Patient Protection and Affordable Care Act (PPACA) and its employer mandates will actually play out, Rieder said.
“We’ve seen a number of companies reluctant to hire full-time due to the unknown costs of health care, so they are maintaining higher temporary staffing levels,” he said., “They are playing it safe before they understand what the full impact will be.”
The PPACA’s final rules over how to count temporary workers in the overall calculations regarding coverage under the employer mandate have yet to be published, Jacobson added.
“Most likely many temporary positions will be captured, but not all will be, so it’s going to have some impact on the costs for temporary employment,” he said.
The firms’ labor study gathered data from participating industry organizations across all sectors from January 13 through January 29.
