Hello! Thanks for your question about the average employee churn rate in the top 5 property insurance companies in the US, with emphasis on how much is spent per year on training and continuing education. The short answer is that the quantitative data about how expensive it is to keep and train employees isn't available publicly. However, 'pain points' of big insurance companies have been successfully analyzed at length when it comes to employee churn and training. Below you will find a deep dive of my findings.
METHODOLOGY
I searched corporate websites, industry reports and rusted media sites to provide information on top five property insurance companies and how much of their spending goes to training and continuing education. Unfortunately, insurance companies do not appear to publicly report how much they spend on employee retention or training. Therefore, I used other resources to gather all available data about employment figures, employee turnover, churn rate and figures regarding how much U.S.-based businesses spend on training new salespeople which is a major component of the insurance workforce.
FINDINGS
Top five property insurance companies in the U.S. are as following:
Direct premiums amounting to $59.361 billion and market share of 10.09%. State Farm's estimated revenue is $87.9 billion for 2016. The estimated number of employees right now is 65,000, with the number having been at 151,000 at the beginning of 2016. The estimated employee churn rate for State Farm is therefore 132%.
Reports for 2018-2021 plans for the company state that State Farm plans of letting go of additional 4,200 workers because of the $7 billion annual underwriting loss last year on auto policies. They plan to do that by closing 11 facilities and moving offices.
Direct premiums amounting to 30.18 billion and market share of 5.13%. Allstate's estimated revenue is $25.6 billion for 2016. The estimated number of employees right now is 43,050, with the number having remained the same since the beginning of 2016. The estimated employee churn rate for Allstate is therefore 0%.
Direct premiums for Berskshire Hathaway amount to $29.967 billion and market share of 5.09%. Berkshire's estimated revenue is $156.5 billion for 2016. The estimated number of employees right now is 45,500, with the number having remained the same since the beginning of 2016. The estimated employee churn rate for Berkshire is therefore 0%.
Direct premiums amounting to $19.05 billion and market share of 3.24%. Farmers' estimated revenue is $13 billion for 2016. The estimated number of employees right now is 41,335, with the number having been ad 49,644 at the beginning of 2016. The estimated employee churn rate for Farmers is therefore 20.1%.
Direct premiums amounting to $16.744 billion and market share of 2.85%. Farmers' estimated revenue is $5.3 billion for 2016. The estimated number of employees right now is 32,140, with the number having been at 30,000 at the beginning of 2016. The estimated employee churn rate for Farmers is therefore 6.6%, with the company hiring an additional 2,140 employees during 2016.
Employee churn rate for the insurance finance industry in general in 2016 was at 1.98%. The average workforce amounted to 6,089.4 employees in January 2016, and rose to 6,212.7 in January 2017. This information can provide insight into a general industry trend, but does not indicate the cost associated with employee churn and subsequent training.
Further explanation of the turnover rates in the industry can be found in two additional reasons. Alongside companies either retaining the same number of employees or working on letting go of their workforce, McKinsey & Co. report that the average age of a US insurance agent in 59 which means that by 2018 every fourth insurance employee will be expected to retire. Millennials find insurance positions to be boring, with fewer than one in 10
reported being highly interested in working in the insurance industry. Companies are therefore faced with having to find a way to show that insurance companies aren't just about selling insurance but also can be focused on career development, problem solving and helping people.
When it comes to training statistics, U.S. companies invest over $70 billion annually on training, and an average of $1,459 per salesperson. This amounts to an almost 20% bigger amount spent of training salespeople (including insurance salespeople) than on workers in all other functions. However, the ROI of sales training is only 20% as studies show that participants in traditional curriculum-based training forget more than 80 percent of the information they were taught within 90 days. To boost the effectiveness of training, companies are encouraged to offer additional training at times of need, as well as allow salespersons opportunities to practice their skills in time frames connected to actual buying processes. On top of that, training has been proven to yield 65% better results when pictures are added to information.
Additionally, according to a 2014 Deloitte research survey, more than 60% of organizations do not know exactly how much they are spending on training, and fewer than a quarter of these same companies rate themselves as “good” or better at demonstrating value or return on investment (ROI) on their learning investment. The Deloitte research further investigates trends in the movement of human capital in the insurance market that could have potential to be further researched as qualitative data.
CONCLUSION
To wrap it up, I was not able to find exact numbers as to how expensive it is for companies to keep employees, but the provided insight into employee churn rates, current trends in the insurance markets and deep research of five leading property insurance companies should enable enough insight into insurance employee retention and training.
