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Insurance and reinsurance firms plan higher 2027 merit pay budgets
A Marsh survey of 1,001 US organizations projects base salary merit increases of 3.2% in 2027, with insurance and reinsurance at 3.6%.
Insurance and reinsurance firms are setting aside more for merit pay in 2027 than most US industries, a move that highlights how compensation and benefits compete for talent as healthcare costs keep rising, according to Insurance Business.
Marsh’s survey found employers across all industries plan base salary merit increases of 3.2% in 2027, while total salary increases are projected at 3.5%, including merit, promotions, cost of living and other adjustments. The insurance and reinsurance sector budgeted 3.6%, above the cross-industry average and tied with energy and non-financial services, with only high tech and banking planning higher increases at 3.8% and 3.7%, respectively. The projections are preliminary, and as of July, 87% of organizations said their 2027 salary budgets were not finalized.
The article notes that if Marsh’s projections hold, 2027 would mark four straight years of merit increases in a narrow range, fitting a still-competitive labor market even as overall hiring has moderated. The Jacobson Group and Aon’s Q3 2026 Insurance Labor Market Study found that 89% of insurance carriers plan to increase or maintain staff size over the next 12 months, with much of the activity described as backfill hiring rather than net headcount growth.
Economic uncertainty is also influencing compensation plans, with 57% of Marsh respondents expecting at least a moderate impact on 2027 pay. Marsh’s US workforce reward solutions leader Tauseef Rahman said compensation dollars are tight and urged employers to be selective, directing increases with data toward areas with the greatest workforce needs and talent risk. The piece also links a multi-year plateau in merit budgets to a greater reliance on benefits for talent competition, citing research that voluntary turnover is slowing for some roles.