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Insurance Market Analysis – The Other Shoe Starts to Drop


Insurance Market Analysis – 11% of Workers Laid Off At One Carrier

Until earlier this week, my insurance market analysis was one of “wait and see” what happens in the near future. On Monday afternoon, a news blast was sent out from Insurance Journal that came as no shocker.  One of the major California insurance carriers had just laid off 2,400 workers.  You can find the article here.  Due to legalities, I will not name the insurance company in the article.

insurance market analysis -shoe drops
Public Use License – Matti Blume

Imagine nine people in a meeting.  You get up to grab a cup of coffee at the back of the room, and one of the attendees has left the meeting.  You will notice that missing person.  The same is true for the carrier – 11% of the staff is now or will be gone in the near future.  This move will be noticed and remembered for quite some time in the future.

Is this a situation of overly aggressive management decisions or the correct response to the market conditions that I covered last month?

By the way, if you have not signed up for the Insurance Journal’s newsletter – you should look into its newsletters.  The Insurance Journal has always been a newsletter that I read weekly for an overall insurance outlook, not just Workers Comp.

The Insurance Journal is on my list of places to research for my weekly articles. Their insurance market analysis articles are very informative.

What The Carrier’s CEO Said

I wanted to cover some of the statements made by the carrier’s CEO.   The CEO’s statements cover more than just the one carrier that he/she leads. Many insurance carriers are presently developing the same outlook.

  • …must manage risk and prudently align its costs as the industry continues to face macroeconomic challenges.
  • …the moves are being made to better position itself for long-term profitability by creating a more streamlined organizational structure, and follow a thorough evaluation and reduction of operational expenses across the company.
  • … plan to “reinvent how insurance is delivered, simplifying systems and introducing innovation”

Any of the three statements above could have originated from any CEO at any company today.  Macroeconomic challenges were bolded as that is the likely source of the layoffs. These challenges may reach beyond any insurance market analysis to the economy as a whole.

Article Comments

I rarely ever comment on any article comments.  This one came from someone undoubtedly deep in the insurance business.  It was unanimously upvoted by the article readers.


“Our leaner structure will make us more nimble and better able to pursue opportunities for growth and ultimately make the carrier more responsive to the needs of our insured customers and agents,” said the CEO.”

That’s not how customer support and agent services work. Leaner structures (code for running skeleton crews) mean longer wait times, the inability to respond to upticks in service needs, and overburdening employees.


Insurance Market Analysis – Three Contacts Made

Three people that I know work for this carrier.  I decided to chat/email them to see how they were doing in the midst of the layoffs.  Two of them will likely not suffer a layoff as they are in senior positions.

They both confirmed they do not see a layoff upcoming – yet.  The third is now not with the carrier.  That makes a 33.3% layoff rate for the people that I know who worked there.  My contact was in the Customer Service area.  The above comment from the article looks to be correct.



James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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