Special Report: The Highs and Lows of Insurance Industry Pay »

SPECIAL REPORT

THE HIGHS AND LOWS OF INSURANCE INDUSTRY PAY

High inflation and the ever-growing high cost of goods and services has a lot of us examining our income level. Weekly Industry News is no exception. What has us intrigued is a story we found on the Business Insurance website on the five highest paid insurance execs.

So, we took a look at average salaries, too. ZipRecruiter is a firm that specializes in finding employees for employers. On May 16, 2022, the company published a report on all insurance jobs, and all salaries within the industry.

The average annual pay for insurance industry jobs is $67,421. On average, the pay is $32.41 an hour, $1,297 per week and $5,618 a month.

ZipRecruiter says it has seen salaries go as high as $143,500 and drop as low as $22,500.

Insurance agency owners can bring in $120,787 a year on average while the independent insurance agent will average $97,996. Brokers can make an average of $98,079.

Salary.com has a little different take on agents. It says the average insurance agent salary in April of this year lands somewhere between $48,258 and $59,604. The dead center average is $52,839.

Insurance Agent Salaries by Percentile Percentile Salary

10th Percentile Salary $44,087 25th Percentile Salary $48,258 50th Percentile Salary $52,839 75th Percentile Salary $59,604 90th Percentile Salary $65,764

How much income an agent, or another position in insurance, can get is the product of a number of factors. They are education, certifications, designations, other skills they bring to the table, and — of course — the number of years they’ve been in the business.

That’s the lows and highs of average income for insurance agents and other industry positions. Here’s the statistics on the five highest paid people in the industry.

1. Evan Greenberg — Chubb

Salary: $1,400,000 Bonus: $7,500,000 Stock awards: $10,125,007 Option awards: $2,996,944 Other: $1,159,233

Total — $23,181,184

(14% rise from 2021)

2. Peter Zaffino — AIG

Salary: $1,482,693 Stock awards: $9,379,956 Option awards: $2,874,994 Nonequity incentive: $8,000,000 Other: $167,577

Total — $21,905,220

(down 9% from 2021)

3. Alan Schnitzer — Travelers

Salary: $1,300,000 Stock awards: $6,900,051 Option awards: $4,598,852 Nonequity incentive: $6,500,000 Change in pension: $471,951 Other: $82,843

Total — $19,853,697

(4.5% positive change from 2021)

4. Ajit Jail — Berkshire Hathaway

Salary: $16,000,000 Bonus: $3,000,000 Other: $14,500

Total: $19,014,500 — not measurable

5. David Long — Liberty Mutual

Salary: $1,450,000 Bonus: $4,712,500 Appreciation units: $9,571,283 Restricted units: $2,392,739 Other: $327,815

Total — $18,454,337 (up 3.3% from 2021)

Sources: Salary.com, Zip Recruiter, Business Insurance

COMMERCIAL RATES CONTINUE TO RISE

HERE’S WHY

The American Property Casualty Insurance Association (APCIA) has taken a look at why commercial insurance rates continue to climb. Spokesman Robert Gordon — who is an APCIA senior vice president — said there are three main drivers that are pushing prices skyward.

“Insurers and agents continue to look for ways to reduce costs while still meeting all obligations to policyholders,” Gordon said. “But as claims and other costs have increased dramatically insurers are under pressure to raise rates on a variety of insurance policies typically utilized by small businesses.”

Here are the three main drivers that Gordon mentioned.

1. Inflation. It has contributed to the increase in payouts for insurers. March 2022’s consumer price index (CPI) leapt 8.5% from the same month in 2021.

2. Abuse of the legal system. Lawsuits against insured businesses often lead to large verdicts. The cost of policies often go to cover the cost to insurers for those decisions. As an example, Gordon said the losses for general liability rose over 57% since 2017.

3. Cyber. Ransoms. Ransoms. Ransoms.

They very often top $1 million. Business interruption costs are stuck on top of that.

Small and medium-sized businesses will see a noticeable jump in premiums when they renew their policy, or when they purchase a new one. This is going to be the case even if they have not made a claim in the past year.

Gordon noted a survey from the Council of Insurance Agents and Brokers (CIAB). In the 4th quarter of 2021, medium-sized businesses saw premiums jump 10.6%. Small businesses were hit — on average — 6.3%.

Source: Insurance Business America