Despite Tough Times, Insurance Industry Employee Benefits Secure

Independent insurance agencies and carriers’ top concerns for 2010 may be profit margins, cash flow, sales volume and marketing, the down economy and the possibility that it might falter again, but that doesn’t mean these companies are decreasing or reducing employee benefits to build up reserves. Instead, insurance industry businesses are using more social marketing to develop business, a recent survey reveals.

From 2009 to 2010, the majority of companies (68.4 percent) that responded to San Diego Insurance Staffing’s “Competitor Survey” said they had not discontinued any employee benefits, such as 401(k) matching, medical or vacation pay. Most (55.9 percent) had no plans to eliminate benefits in 2010 that they used to offer.

According to the survey, most insurance companies said they were not implementing hiring freezes in 2010, and if they did have to reduce benefits, they would only do so with sick pay and flexible schedules.

Independent agencies likewise said they did not plan on decreasing or reducing employee benefits, but if forced to do so, they would only cut costs with the 401(k) mating program or paid employee vacation time.

In fact, to keep staff motivated during tough economic times, many companies (58.1 percent) said they were providing incentives for a staff bonus, and 51.6 percent said they were providing staff party/lunches.

Despite that good news, the majority of companies (54.5 percent) that responded to SDIS’ survey said although they weren’t making cuts for 2010, they were not giving cost of living increases to their staff. Additionally, many companies (72.7 percent) said they were relying on their existing employees and cross-training them to take on additional roles.

The results from the survey, while somewhat predictable, were generally more positive than SDIS expected given the down economy, the company said.

To keep small commercial line accounts profitable, many survey respondents said they service these clients in-house. The profit margin for these accounts with less than $5,000 in revenue, is in the 3 percent to 5 percent range, most respondents said.

By and large, companies said referrals from current clients were the most frequently used method of developing business. Independent agencies in particular said they were using a lot more social marketing in business development.

For more information on SDIS’ Competitor Survey, visit www.sdisstaffing.com.