The employment report for September in the U.S. showed a loss of 7,000 jobs in financial services. Insurance, alone, has now lost 90,000 jobs since May 2025.
What's going on?
I have a theory, and it's not about artificial intelligence. If I'm right, hiring in insurance will stay in the doldrums for a while.
Let's have a look.
As Insurance Business reports, the industry still employs a massive 2.9 million people in the U.S., but claims jobs are down a hefty 21% over the past year, while life and health is off 4%, P&C down 1.7%, and agents and brokers down 1.1%. The losses are accelerating: The article says, "Insurers lost about 1,900 jobs a month on average in 2025 and roughly 6,900 a month so far in 2026."
A thorough analysis in Barron's mostly attributes the job losses to cost-cutting under pressure. Barron's notes that the surge in rates following the COVID disruption has slowed. In addition, government subsidies for healthcare have been cut even as claims costs keep increasing. In the face of pressure on both premiums and expenses, insurers have had to become more efficient, Barron's says.
It does say AI has played a role by automating tasks but doesn't treat that as a huge issue just yet (and I've been arguing for months that the fears of job losses to AI are overstated).
You could also add the effects of the "silver tsunami" -- the oft-quoted projection by the Bureau of Labor Statistics in 2021 that 400,000 insurance professionals would retire by the end of 2026. Unemployment in insurance remains well below that for the economy writ large -- 3.1%, vs. 4.2% -- so some of the job losses may simply be that companies haven't yet been able to fill the positions left by retirements.
But I think there's an overarching issue that gets short shrift if you spend too much time in the details.
My Theory
My theory boils down to uncertainty. I think economic and geopolitical uncertainty are holding back the economy, in general, and the insurance industry, in particular. And I don't see the uncertainty subsiding any time soon.
Tariffs have not only raised costs but, because of their on-again, off-again nature, have slowed investment and the sort of adaptation of supply chains that would ordinarily happen if, say, Canadian lumber suddenly became 50% more expensive. Why spend a lot of money and time if prices might return to normal shortly, whether because of a court ruling against tariffs, because Democrats win control of Congress and assert its power, or simply because President Trump changed his mind?
Now add the uncertainty from the war on Iran. Even though oil flows out of the Middle East are improving, Iran retains the capability to attack tankers, to blow up one of the major pipelines being used to skirt the Strait of Hormuz, or to do more damage to the diesel refineries in the region, whose loss has contributed so much to the soaring prices for the crucial fuel.
While Trump has repeatedly told us that Iran wants to make a deal and that prices for oil will soon plummet, some of us are old enough to remember how the Iranian zealots acted after taking 66 American hostages in 1979. Angry at President Carter, they didn't release the hostages until minutes after Ronald Reagan became president in January 1981. Who's to say the Iranian theocrats won't treat Trump the way their predecessors treated Carter, declining to make a deal until he leaves office?
What is now looking like a blue wave in next month's midterm elections might relieve some of the uncertainty about tariffs, perhaps even leading to serious settlement talks with Iran, but a loss of control by Trump would surely lead to at least a burst of chaos -- perhaps even a sustained stretch. The Democrats are itching to go after him, and he would surely return fire with every one of the many assets at his disposal.
The current uncertainty and the prospects that it will continue will create headwinds for the economy, which insurance, especially P&C, tracks closely. The problem will be even worse than normal, I believe, because the effects will hit personal lines so hard.
Replacement costs for cars have surged in recent years because of supply chain disruptions, and they will likely stay in flux. Insurers will also have to deal with possibly significant changes in driver behavior if gasoline and diesel prices stay so high -- or go even higher.
Costs for home repairs have likewise soared, and uncertainty will tend to keep them high. Meanwhile, the general uncertainty about the economy has fueled inflation, leading the Fed to raise rates for the first time in years and to signal that it may raise rates again soon. A result has been 7% mortgages that have pretty much crushed the housing sector. The reduction in construction means fewer homes to insure, and the stagnant resale market limits the opportunities to poach customers as homes change hands.
The result will, I believe, be unrelenting pressure on revenue and costs at a time when customers are exhausted from all the post-COVID rate increases.
I hope I'm wrong, but it's hard to see a lot of hiring in that sort of environment.
Cheers,
Paul