Insurance Industry Jobs Impacted By Internet Access

June 30, 2008
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GRAND RAPIDS — The employment growth outlook is sluggish for the insurance industry, even while demand for insurance is on a steady rise.

According to the Bureau of Labor Statistics, wage and salary employment in the insurance industry should grow by 7 percent between 2006 and 2016, as opposed to an 11 percent growth rate in all other industries.

Much of the slower rate in the insurance industry is due to the implementation of technology.

“I went through college and I think I used a computer once my senior year, and it was the size of Texas,” laughed Meg Goebel, president of the Paul Goebel Group, professional insurance administrators. “We’re seeing that more and more with programs where you just input the information and the computer tells you, ‘Yes, this person is approved and at what rate. Here’s the level of the risk.’ It’s not going to totally take away from an individual reviewing something, but for some of the simpler things — yeah, we’re seeing that happen.”

While the baby boomer generation has heavily impacted America’s aging population — causing the demand for health insurance to rise — new technologies have streamlined the insurance process, resulting in the need for fewer workers, according to the bureau.

The Internet has been the power player in this process. The bureau reports in its 2008-09 Career Guide to Industries that many companies will recognize the Internet’s potential as a powerful marketing tool, slowing growth of some occupations.

The report states that the Internet enables clients to search for price quotes for policies or to submit claims online, instead of going to an insurance sales rep. Jobs that are most in jeopardy, the bureau believes, are property and casualty insurance, predominantly auto insurance. The traditionally high prices and straightforward nature of auto insurance means that customers are likely to shop around online and compare policies and prices.

“I can see purchasing an auto policy or even a life insurance policy online because of the simplicity of these types of things and the types of questions they’re going to ask,” said Goebel. “Buying health insurance online? Oh my gosh, that just boggles my mind. If somebody’s able to do that, bless ’em!”

Other technologies are also affecting the industry. Computer software has helped increase productivity in the office. One such software program automatically analyzes and rates insurance applications, thus impeding the employment of underwriters. And satellite imagery may relieve the need for claims workers to have to physically visit the site of damages, allowing them to view it from their computers instead.

Some professions within the industry, however, are expected to do well. Insurance companies will hire more sales agents to help compete against banks and security firms that are spreading into the insurance field. Agents who sell multiple services are more likely to succeed. Although they account for a small number of jobs, actuaries and adjusters who inspect damage and interview witnesses will be in need because of growth in the industry and the population.

“When it comes down to sheer customer service and having an insurance agent advocate on your behalf, that’s where the Internet fails miserably,” said Goebel. “You call up an independent agency like mine, and if you’re dealing with home or auto insurance, you’re dealing with the same one or two or three people all the time, so you have somebody that knows you. If you run into problems with a claim with a company, we have the ability to advocate on your behalf. You’re not going to get that on the Internet.”

Goebel noted that the insurance industry has stood up well against the tough economy, and while people are not buying second homes or upgrading their insurance, they are looking for a product that costs less.

“What I’ve seen, not only in Michigan but with some of my colleagues in the country, is that insurance agencies are fairly recession proof,” she said. “Insurance is not a luxury, it’s not like advertising or a spa treatment or something like that. I’m not in any position to lay off any employees and I have no intention of doing so, and I’m not really seeing that as a trend. What I am seeing is that we’re basically working twice as hard to keep the business we have.” 

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