Remote Work’s Impact on the Insurance Industry

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Posted by: CMR December 6, 2023 No Comments

The concept of working from home isn’t entirely new. In fact, it’s been around since well before the digital age, although most “work from home” jobs back then were agricultural or artisan in nature. Over time, as technology advanced to allow people the ability to connect without being in the same physical space, working from home (or another remote location) grew in popularity.

Prior to the COVID-19 pandemic the number of people working remotely in the U.S. doubled about every 15 years: creeping slowly up from less than one percent of the workforce in the 1960s to over four percent in 2019.

In the months before pandemic shut downs went into place, between four and five percent of American employees worked from home. This number jumped the equivalent of 40 years forward to reach over 60 percent in the early days of the pandemic. Since then, despite many companies’ attempts to get employees to return to the office (known as RTO), working from home, and to an even greater degree, hybrid work, have remained popular.

While remote work is widely expected and accepted in the technology and healthcare fields these days, the insurance industry has always included some degree of working outside the office. Insurance agents and adjusters both have good reasons to be in the field with customers and often use their homes as their offices when not traveling or onsite with clients. Taking remote work beyond those traditionally field-based roles, however, can be the subject of more pushback in an industry that’s been around for hundreds of years.

As 2023 draws to a close, we’ll take a look at the latest research on the state of working from home in the U.S., along with some benefits insurance employers should consider when making their work from home (WFH) and return to office (RTO) policies.

What’s the state of remote work in 2023?

The current state of working from home in the U.S. varies greatly by industry. Across the entire U.S. economy, data from WFH Research shows that by July 2023:

  • 12 percent of full-time employees remained fully remote;
  • 29 percent of full-time employees participated in a hybrid remote/office work situation;
  • And 59 percent of full-time employees were entirely on-site at their place of employment

WFH Research’s studies reveal a lot more details about each type of employee, which can give useful insights we can apply to the insurance industry.

Working from home stats and figures

Although lower than its peak pandemic popularity, working 100 percent from home (or remotely) remains popular among employees who have the option to do so. On the other hand, entirely remote work isn’t many employers’ top choice. This discrepancy between employees’ desire to work entirely from home and employers’ demands to have people back in the office could lead companies to lose people who aren’t willing to go back to the office at all. The up-side to that could be that previously unavailable talent may look at new careers in industries they hadn’t considered before (hint: insurance) – if those jobs allow for remote work.

According to data from WFH Research:

  • Working from home is more common for employers located in the top 10 most populous U.S. cities. Its prevalence goes down as the city’s population goes down.
  • Working from home is still most prevalent in the technology, finance, and professional and business services industries.
  • There’s a discrepancy between the number of days employers want their employees to be remote and the number of days employees would prefer.

With insurance industry respondents reporting they work an average of 2.19 days each week from home (topped only by the information/tech industry’s 2.44 days), the insurance industry is positioned to capture the large swath of WFH-hungry employees across the U.S.

Return to office stats and figures

The pandemic made it clear that some employees simply didn’t have the choice to work from home. Those “essential workers” who ran our grocery stores, hospitals, waste disposal, and public transportation (among many others), never went remote, and thus, never returned to the office.

For the majority of other workers, however, offices were vacant for 2020 and much of 2021, if not longer. But companies have good reasons for wanting people to come back to the office: everything from increasing collaboration and mentorship to making good use of purchased or leased spaces.

According to data from WFH Research:

  • The most heavily weighted age group for both fully in-office and fully remote work are employees in their 50s and 60s. Younger employees have greater levels of hybrid employment.
  • As you might expect, hospitality, food service, and retail have the highest percentage of fully onsite employees across all industries.
  • Employers offer far greater onsite job opportunities than employees really want. Around 34 percent of jobs require people to be in the office full-time but only 18 percent of employees prefer that arrangement.

Transitioning to fully remote work during the pandemic was rarely controversial. Yet, as companies try to bring their workers back to the office – even when that was the expectation pre-COVID – they’re facing pushback.

According to one survey of financial services executives, two-thirds of those who currently work a hybrid arrangement would quit their jobs if they were mandated to come into the office full-time. Even tech companies, from Amazon to Zoom and beyond, accept they’ll lose some staff as they insist on employees returning to the office.

Hybrid work stats and figures

For many companies and employees alike, a hybrid work model is ideal because it combines the freedom and flexibility of remote work with the collaboration and social benefits of office work. In this respect, the insurance industry may be ahead of the curve which could help it gain new talent where other industries refuse to compromise.

Case in point: The Insurance Information Institute (III) conducted an informal survey in October 2022 and found that 41 percent of respondents say they work an average of five days per week from home. Combined, a total of 68 percent of respondents said they work from home more than three days per week. While not a scientific study, this survey gives evidence that a lot more insurance industry employees are enjoying the benefits of remote work for more than the average number of days each week.

According to data from WFH Research:

  • Within the finance and insurance sectors, 69 percent of workers are either hybrid or fully work-from-home. Only 31 percent work entirely from an office.
  • Hybrid employees report spending only 50 percent of their time doing individual work (they attribute the other half to meetings). This is far less than the 75 percent reported by both their fully in-office and fully work-from-home counterparts.
  • Across all industries, for employees who have the ability to either work from home or in an office, 45.8 percent are in a hybrid situation compared to solely office or from home.
  • Hybrid workers claim to have more interactions with their colleagues than do both fully in person or fully remote workers.
  • A hybrid work environment greatly impacts workers’ choices to stay away from the office when they’re sick.

How remote work can benefit the insurance industry

Based on the data we’ve got, the insurance industry (along with other financial and business services) is already ahead of the curve in taking advantage of remote and hybrid work. This trend is likely already benefiting the industry, and will continue to do so in a variety of ways.

1. Remote work can reduce workers compensation insurance claims

This benefit is double-sided for the insurance industry. For individual insurance carriers, agencies, brokerages, MGAs, MGUs, and other business entitites, having a remote (or at least hybrid) workforce can translate into fewer workers comp claims because employees aren’t onsite to have injuries and accidents.

For insurance carriers that underwrite workers compensation claims, the benefit is even greater. When more companies have remote and hybrid workforces, workers comp claims go down and workers compensation insurance carriers could see improved loss ratios and greater profitability.

2. Remote work can attract new talent to fill the insurance talent gap

The insurance industry’s talent gap is an ongoing topic of conversation. As a large portion of the industry’s tenured employees retire, there aren’t enough new people joining to replace them. By embracing remote work opportunities where other industries don’t, insurance companies and agencies can stand out among talented workers looking for a career that meets their lifestyle needs.

3. Remote work can increase employee satisfaction, which translates into customer satisfaction

There’s no question that most employees prefer remote work, or at least partially remote work, over being required to come to an office every day. Giving employees what they want in terms of remote work and flexible office schedules can go a long way in increasing their job satisfaction, which in turn enhances their job performance and leads to greater customer satisfaction.

4. Remote work can improve diversity, equity, and inclusion

The insurance industry is making strides towards a more diverse workforce and remote work can open doors for all sorts of people who can’t work in an office. For example, some people with disabilities find working remotely to be a reasonable accommodation; people with children find remote work allows them to remain in the workforce while juggling parental responsibilities; and People of Color often prefer remote work due to fewer daily encounters with microaggressions and racism.

It’s not just anecdotal: A Deloitte and Workplace Intelligence study recently showed that those with caregiving responsibilities (who are more often than not, women) were 1.3 times more likely to say they’d leave their company if remote work options were eliminated.

Working from home requires modern insurance infrastructure

As forward-thinking as the insurance industry is in its remote work capabilities and practices, some companies are still doing things the way they’ve always done them: And that’s costing them even more time and money when staff aren’t in a centralized office location.

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Article Written By: Ellen Lichtenstein

Author: CMR

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