National Underwriter
Changes in property and casualty insurance company employee compensation and further reductions in employee benefits at these firms are expected throughout 2010, according to a new study.
Ward Financial Group, a Cincinnati-based consulting firm, conducted the “HR Practices and Employee Benefits Study” with the Property Casualty Insurers Association of America (PCI).
The study notes that employee compensation is about 30 percent of the average p&c insurance company’s underwriting and loss adjusting expenses.
Because of the soft market and the increasing cost of benefits, insurance companies are reviewing their structure of employee benefit plans and other compensation to manage expenses, according to Ward Group.
Total compensation per insurance company employee is projected to increase 2 percent in 2010, with increases in ordinary compensation, incentive compensation, retirement plan funding, major medical expenses and other benefits expenses, said the report.
The study found that merit increases at insurance companies have dropped from 2009 to 2010 and are 30 percent lower than 2008.
Additionally, the study notes that 20 percent of companies have frozen salaries for 2010, while 3 percent are considering it for the future.
The report also states that since 2004, the average insurance company has reduced health care contributions by 5 percent and is requiring the employee to pay for more of these costs directly. Health care offered to retired employees has declined by 30 percent since 2006.
Additionally, the number of companies offering a defined benefit pension plan has decreased 27 percent since 2006, and 40 percent of companies with a defined benefit plan have frozen the plan to new entrants, the report said.
Employee compensation expenses will continue to deteriorate through 2011, according to Jeff Rieder, president of Ward Group.
The study examined 117 p&c companies.
Access Content Source: http://www.property-casualty.com/News/2010/6/Pages/PC-Companies-Lowering-Employee-Compensation-Benefits.aspx
***********************************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
No comments:
Post a Comment