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Addressing the talent crisis in the insurance industry: Does investment in employee relations pay off?

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  • Xin Che

    (California State University)

Abstract

The US insurance industry is facing a critical talent crisis that demands immediate attention. Utilizing a specialized reporting requirement, our study delves into US property-liability insurance companies’ investments in their employee relations and evaluates the influence of these investments on their financial outcomes. Our study reveals a positive correlation, with a standard deviation increase in investment (USD 4.18 million for an average insurer) correlating with a 0.36% rise in return on assets and a 1.10% rise in return on equity. Various tests, including a difference-in-differences event study, validate these findings. Additional tests demonstrate that benefits slightly diminish at higher investment levels but remain significant. Smaller, less capitalized insurers gain the most.

Suggested Citation

  • Xin Che, 2025. "Addressing the talent crisis in the insurance industry: Does investment in employee relations pay off?," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 50(3), pages 650-683, July.
    • Handle: RePEc:pal:gpprii:v:50:y:2025:i:3:d:10.1057_s41288-025-00351-6
    DOI: 10.1057/s41288-025-00351-6
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