Michigan’s insurance industry should continue adding jobs in the years ahead, although it faces a tough issue that’s hitting many economic sectors today: attracting and competing for talent.
That was one of the findings from Ferris State University insurance, actuarial and risk-management students who conducted a survey with insurance companies, agents and brokers, as well as service providers to the industry.
A key challenge to recruiting talent comes in hiring people with business acumen needed to work in insurance.
“Employers are in need of applicants that possess the basic business skills such as proper etiquette and strong communication skills,” according to a report on the survey results. “These are relatively small yet important parts of the job that if not learned can cost firms business. Teaching these necessities can also be frustrating, tiresome, and expensive for managers.”
A majority of the available jobs in the industry are in claims, underwriting and information technology. The talent issue comes despite the insurance industry paying average annual total compensation of $85,000, versus $59,250 for all Michigan workers, according to a 2016 analysis by the East Lansing-based Anderson Economic Group.
The Ferris State report largely confirms what the insurance industry has been facing recently, said Lori Conarton, director of communications for the trade group Insurance Alliance of Michigan.
“As an industry, talent and recruiting talent is going to be important because a lot of the workforce is retiring in the next five to 10 years, and on top of that, our industry is growing,” Conarton said. “So not only do we need people to fill our jobs as we grow, but also to fill those jobs that are being vacated. We’re really at a place that we have to be advocates for ourselves.”
The insurance industry in Michigan employs about 41,000 people in a wide range of fields that ranges from agents, brokers, underwriters, and claims processors and investigators, to marketing, finance, accounting, legal and information technology positions.
Respondents to the Ferris State survey in late 2016 and early 2017 indicated they had grown their workforces by a collective 5 percent in the past year. Agencies, brokerages and service providers grew at double-digit percentages with “relatively low” employee turnover.
According to the report, respondents reported that it’s “expensive to train new hires and teach them the technical aspects of their job.”
“Many firms are limited because of training cost and time requirements. One respondent noted that it takes three years for their firm to begin to turn a profit on a new hire,” according to the report’s authors. “With this kind of commitment of resources, it is critical that new hires be committed to working for the firm for an extended period of time.”
In one tactic designed to address the talent problem, insurance carriers have been working with high schools in five districts in the Lansing and Flint areas to introduce the industry to students. The program involves partnerships between insurance companies and individual schools to introduce students to jobs in the industry through classroom speakers and job shadowing.
Farm Bureau Insurance, for example, works with Eaton Regional Service Agency in Charlotte. Students at the intermediate school district spend two hours a day, five days a week at the insurance company learning about industry jobs. Students earn nine college credit hours that they can use at Ferris State, Northwood University or Olivet College — each of which offers degrees in insurance and risk management.
The initiative expands this fall to schools in Oakland County and Traverse City, Conarton said.
“It’s a direct pipeline to give kids that introduction to the insurance industry and show them that it isn’t boring, that it’s fun and every day is a challenge,” she said. “Once they get to know the insurance industry a little bit more, hopefully, (they will) go on and pursue a degree and a career in insurance.”
The Insurance Alliance also coordinates a public awareness campaign, “Insuring our Future” initiative, to promote the industry as a career.
Despite the talent challenge, survey results indicate that insurance in Michigan is a stable and growing industry, said David Brown, a student adviser and risk management and insurance coordinator at Ferris State.
The survey suggests real employment growth of 4 percent for the industry in the coming 12 months and a 9.4-percent increase over a two-year period.