Insurance Salaries: What You Need to Know
Insurance is essential to the financial landscape, providing people and businesses with the financial protection and security they need to stay afloat. As such, it’s no surprise that an increasing number of people choose to pursue an insurance career, and with the current salaries, why wouldn’t they? But what are the wages like in the insurance sector, and what factors contribute to those salaries? Read on to find out more about insurance salaries.
The History of Insurance Salaries
Insurance salaries have changed drastically over the years. In the past, wages were lower, and the profession was generally viewed as a financial backup plan. However, as the demand for insurance grew, so did the salaries associated with insurance jobs. At present, insurance salaries are on the rise and beginning to rival salaries in other financial sectors. The average salary for insurance professionals in the US right now is between $49,000 and $114,000 per year. I can readily accept that the average wage here is probably landing somewhere in that range if recent evidence of graduate salaries is anything to go by. With rising costs of living, increasing house prices, inflation and a general uplift post pandemic in everyone’s expectations, it’s clear that the average salaries were going to rise too. But at what cost?
Reasons for High Insurance Salaries
There are several reasons why insurance salaries are so high. Firstly, the demand for insurance professionals is off the scale. This is due to the increasing complexity of insurance policies and the need for skilled professionals who can understand and implement them. Secondly, the supply of insurance professionals is relatively low. Insurance companies are willing to pay more for experienced and qualified professionals because there is a shortage but also to retain the people they’ve already got. Finally, insurance companies often need a wide range of skills and expertise, so they are willing to pay higher salaries to professionals with these skills. An example would be the recent rise in demand for Compliance and Risk professionals, many of whom didn’t start their careers in this space. A rising tide lifts all boats.
Current Issues Surrounding Insurance Salaries
Despite the high salaries associated with insurance jobs, several issues can still affect the sector. Firstly, the high insurance cost can be an issue, as insurance companies may be forced to raise premiums to cover salaries. If shareholders see the profitability and dividends impacted by rising wage demands, they’re going to seek alternative margin gains and where better than off premiums. Secondly, the dearth of available talent has forced many employers hands when it comes to salary negotiations, believing (incorrectly in my opinion) that “it’s a candidate driven market” and unless we bow to their demands, we’ll neither attract nor retain the talent we seek. This belief needs to be challenged because the market cannot sustain the rapid wage inflation experienced over the past three years without it significantly impacting current and future hiring processes and in my view more cost effective alternatives will be sought. Some of these may well involve outsourcing key functions to other jurisdictions where labour costs are deemed to be more aligned with the balance sheet. And let’s not ignore the threat that AI might present in the coming years.
In conclusion, insurance salaries are on the rise. This is due to the high demand for qualified and experienced professionals and the limited supply of these professionals. Overall, insurance salaries will likely continue to increase, but for how long? With the rise of AI as a compelling alternative to many of the human-led openings in the market, could the days of the Underwriter and Broker be under threat? I believe we may already have jumped the shark with Insurance salaries. At some point in the not-too-distant future, insurance firms will take a harder line on remuneration and benefits, which will dramatically impact the employment landscape and potentially mean many will seek better-paid alternative sources of employment and a significant decline in the quality of candidate available to the industry. There’s already a shortage of good talent but does that mean that we have to pay exponentially higher salaries in order to attract or retain the people we have? Curious to your thoughts?
Campbell Rochford – Turning Good To Great!