Employment in insurance: Number of US agencies on the rise

The potential demise of the traditional insurance agent is a topic of constant debate in the insurance industry. New technologies are spreading like a plague, offering efficiency gains and potential cost-savings across all links in the insurance value chain.

In that increasingly busy playing field, it’s the insurance agents and brokers who are feeling the brunt of the disintermediation hype … but employment data from the Insurance Information Institute (III) suggests intermediaries are so far managing to buck that trend.

According to the III, the number of insurance agencies and brokers in the US has increased from 653,300 in 2009 to 825,200 in 2018. This increase suggests there remains enough confidence in the US agent and broker distribution channel to continue opening and offering new businesses.

Here’s the III’s reported employment figures for insurance agencies and brokers from 2009 to 2018:

• 2009 – 653,300
• 2010 – 642,300
• 2011 – 649,200
• 2012 – 659,600
• 2013 – 672,300
• 2014 – 720,000
• 2015 – 762,800
• 2016 – 783,500
• 2017 – 809,600
• 2018 – 825,200

In the past five years, the number of insurance agencies and brokers in the US has grown consistently by about 20,000 every year. That is no insignificant increase and there are no signs of that trend reversing dramatically any time soon, despite the technological revolution.

So, what are agencies and brokers doing to buck the disintermediation hype? They’re adapting and finding new ways to bring value to their clients. Ashish Nangla, senior director of insurtech & digital transformation at Synechron, told Insurance Business: “The latest technology trends will definitely change how the market works and how people interact with each other, as well as how things are presented in the market. There’s going to be a lot of change around customer engagement and how insurers communicate with their customers, and that might lead to disintermediation.

“The agents that are just doing sales, they will be disrupted for sure. But agents who are working on value-added services, and who are establishing value in the insurance chain, will be able to continue as a business.”

In that light, it makes sense that employment in other insurance-related activities is also on the rise, according to III data, because insurance firms are looking for partners who will add more value to their clients. In the category of ‘other insurance-related activities,’ the institute includes claims adjusters, third-party administrators of insurance funds and other service personnel such as advisory and insurance ratemaking services. Employment in this category has risen annually from 254,200 in 2009 to 343,700 in 2018.

Overall, the number of people employed in the US insurance industry (including direct insurers – both life & heath and P&C – reinsurers, insurance agencies and brokers, and other insurance-related activities) has risen pretty much year-on-year since 2009, with one slight blip in 2010. The figures are as follows:

• 2009 – 2,379,600
• 2010 – 2,340,600
• 2011 – 2,336,400
• 2012 – 2,368,300
• 2013 – 2,388,900
• 2014 – 2,465,800
• 2015 – 2,538,300
• 2016 – 2,592,700
• 2017 – 2,659,600
• 2019 – 2,690,400

All of the statistics shared by the III were sourced by the US Department of Labor.