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What the Numbers Say: Boomers On The Way Out

statisticsInsurance is a business of numbers.

One of the most important is the number of people an independent agency has on its staff.

Now matter how great technology gets, it still takes people to underwrite, process, service, and renew business. At a microeconomic level, every agency principal has to wrestle with that staffing number at least once a year, if not more often.

For just about every agency I know, the ongoing soft market in commercial lines property/casualty has put pressure on agency principals to keep this number level or cut it. When a cutback is needed, turnover and firings/layoffs are ways that owners manage this number.

The rare, small surplus of candidates in the current slow economy shouldn’t fool anybody in the long term. On the contrary: Agency decision-makers may face a shortage of qualified staff in the very near future, despite today’s high unemployment rates.

The fact is: The workforce for the insurance industry is starting to retire in droves.

To prove the point, let’s take a look at the macroeconomic numbers, courtesy of a new study recently published by The National Alliance Research Academy and created in conjunction with WAHVE. Called “The Looming Professional Gap: The Aging of the National Insurance and Risk Management Workforce” and available for download at www.SCIC.com, the study reports some eye-opening numbers:

— In the U.S, the ‘baby boomer’ generation (born 1946-1964) represents 78 million people.

— In 2006, boomers made up more than one of four Americans (26% of total U.S. population).

Boomers start to retire en masse in the next couple of years, and that means changes for the people in the insurance industry who make staffing and hiring decisions.

In your view, how are pending retirements going to impact agencies that you know?

To be continued. Next time: What is the sound of baby boomers retiring?

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