2014 Salary Survey For Independent Insurance Agencies Shows Across-The-Board Increases, But…

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Insurance Journal has released its latest annual Agency Salary Survey for 2014, and according to the overall numbers, salaries and total compensation are on the rise at every level of the independent insurance agency for the second year in a row.

“This year all levels of agency personnel averaged between a 2 percent to 3 percent salary raise in 2013, but managers and producers earned even more — a 5 percent average increase in compensation as higher revenues triggered other forms of income,” said IJ contributor Andrea Wells.

The full survey was released in the February 24 edition of Insurance Journal magazine, and included the following highlights:

  • Agency owners, principals and management reported salary increases of 4.3 percent for 2013, an increase of 1.5 percent over 2012’s 2.8 percent rise.
  • Producers/sales claimed average salary increases of 5.1 percent last year, up close to twice 2012’s 2.9 percent increase.
  • Agency support staff received a 2.5 percent increase in 2013, compared to the previous year’s 2.2 percent increase.
  • In total income, agency owners/principals/managers reported a significant 7.2 percent increase — this includes benefits on top of salary — compared to 4.5 percent for 2012.
  • Also on total income, producers/sales reported the biggest gain with 8.8 percent, compared to just 5.5 percent for the previous year.
  • Support staff saw a 2.8 percent increase in total income, a tad higher than 2012’s 2.3 percent increase.

While all this data sounds like good news to those working within the independent agency system, rising costs of healthcare are a bit of an X-factor as to whether these employees will ultimately be taking home more money.

According to the survey results, “employee benefits such as health coverage for agency employees appear to be trending up was well, but at a higher cost to employees.”

More of the agencies surveyed said they were offering health insurance than in the previous six years of the study, said Paul Osborne, senior consultant for Demotech Inc., IJ’s official research partner who assisted with this year’s results.

“Generally, an agency needs to pass the $5 million in premium volume mark before healthcare is covered more often than not,” he said. “While there are dramatic differences by region as to whether healthcare is offered, when it is offered, the survey revealed that agencies pay on average nearly 75 percent of premiums in all regions.”

And if an agency does not offer health insurance coverage, Osborne points out, they “offer a subsidy or higher salary for the employee to purchase their own.”

Concerning the increase in shared costs related to health insurance, Megan Bosma, senior vice president of the Ohio-based MarshBerry, a national consulting services organization for independent agencies and brokerages, said she’s seeing “a lot more cost sharing plans, high deductible plans, and HSA plans where employees are being asked to pay for a larger percentage of the overall health insurance.”

According to IJ’s survey, 15.1 percent of responding agencies shifted costs of health coverage to employees in 2013, while just 9.4 percent shifted costs in 2012.

Here’s the full report from Insurance Journal.

 

In Summary

No doubt that 2013 was a good year for the insurance industry, particularly those on the independent agency front. This latest report shows that salaries and total compensation are continuing to trend upward with the lion’s share of the increases going to producers, owners, managers, and primary principals and a smaller share going to support. However, a number of insurers have expressed concern that health coverage for 2015 could see “double-digit price increases,” according to a recent post from the Chicago Tribune. And with more benefit costs being shifted to the employee, we’ll have to wait until late 2014 to see how these increases are reflected in take-home pay.

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