Insurance companies are gearing up to hire more staff in 2025, but they are focusing on experienced professionals rather than entry-level workers. This trend comes from the latest Insurance Labor Market Study conducted by Jacobson Group and Aon, which surveyed insurers about their hiring plans.
According to the January 2025 survey, 55% of insurers expect to increase their workforce this year. However, the study shows that only 16% of the new hires will be entry-level positions. This marks a significant drop from previous years, where entry-level roles made up 27% of anticipated hires in both January 2023 and January 2024.
Jeff Rieder, a partner at Aon, highlighted this decline during a recent webinar. He pointed out that this is the lowest percentage of entry-level hiring seen in their surveys. The decline is particularly noticeable in key areas like underwriting, where only 14% of new hires are expected to be entry-level, down from 38% just two years ago.
Claims functions are still a bit of an exception. About 30% of new hires in claims are expected to be inexperienced, but overall, the trend is clear: companies are looking for experienced candidates. This shift raises concerns about the future talent pool in the insurance industry. Rieder noted that the decrease in entry-level hires might be linked to a drop in birth rates two decades ago, which could lead to fewer young professionals entering the workforce.
The study also reveals that insurers are less inclined to hire entry-level workers in operations and actuarial functions. In the past, operations roles welcomed many new candidates, but this year, only 28% of operations hires are expected to be entry-level. Similarly, only 15% of actuarial positions will go to newcomers, a sharp decline from previous years.
The challenges don’t stop there. Rieder mentioned that some companies are struggling to fill loss control positions, with no entry-level hires expected in this area. This could lead to difficulties in servicing clients, as these roles are crucial for risk management.
Compensation trends are also changing. While insurance companies have been increasing pay to attract experienced talent, overall merit increases have fallen to around 3.2-3.5%, down from 4.2% in previous years. However, incentive compensation remains a priority, with many companies offering short-term and long-term incentive plans to attract and retain talent.
The outlook for hiring in the insurance sector is shifting. As companies look for experienced professionals, the industry may face challenges in building a strong talent pipeline for the future.