By Maria Sassian, Triple-I consultant

Even before the pandemic and “the great resignation,” insurance faced a “talent gap”.  Part of the challenge has been finding replacements for a rapidly retiring workforce, as the median age of insurance company employees is higher than in other financial sectors.

The industry also needs new talent skill sets to tackle rapidly evolving risks and accelerate digital progress.

A major U.S. employer

Insurers employ nearly 3 million people in the United States, many with uniquely insurance-specific jobs, such as claims adjusters, underwriters, risk managers, and agents. Many other workers – like accountants, human resources managers, or data analysts – could work in many different industries.

Filling insurance-specific roles has been a particular challenge. When Triple-I’s Chief Insurance Officer, Dale Porfilio, worked in personal lines for major carriers, companies routinely had staffing shortages in both claims and underwriting – two of the largest staff populations in a property/casualty company. The shortages were due mainly to companies struggling to replace retiring adjustors. A similar need existed in underwriting, as people early in their careers commonly used their insurance positions as a stepping stone to other opportunities.

The industry also competes with other sectors for technology talent, particularly for digital, design, data, and analytics roles, according to McKinsey, and to integrate new capabilities into the business. During the pandemic, insurers have quickly and successfully moved many of their interactions with customers onto digital channels. While this shows the industry’s potential for rapid digitalization, according to an EY report, the pandemic has exposed gaps in digital capabilities, especially in products, distribution, and the need to upgrade legacy systems. 

Not all companies are equally challenged by the talent gap. Grinnell Mutual, based in Grinnell, Iowa — a rural area of about 10,000 residents – experiences lower-than-average turnover, according to Brian Delfino, vice president for direct claims at Grinnell. Many employees have been with the company for more than 15 years. During the pandemic, Grinnell Mutual adopted a “work-from-anywhere” policy and is now able to attract talent from farther afield.

Automation’s impact

A McKinsey study assessed the potential impact of automation on functions like underwriting, actuarial, claims, finance, and operations at leading U.S and European companies. It found that 10 to 55 percent could be automated over the next decade. This won’t necessarily lead to staff reductions and might free employees from routine tasks to perform higher-value activities.

McKinsey predicts automation will speed up the changes in needed skills in unprecedented ways: the need for technological skills will increase 55 percent from 2021 through 2030, while the need for basic skills like data entry will decline by 15 percent.  

As more knowledge work is automated, the workforce will require more creativity, critical thinking, and social intelligence to shape and guide them.

Insurance executives surveyed by McKinsey said underwriting will not only become more technical but also require more social skills and flexibility. Respondents said automation and analytics-driven processes will produce a greater need for soft skills to shape and interpret quantitative outputs. Adaptability will also become more important for underwriters to stay responsive to changing risks and learn new techniques as technology changes.

Upskilling and reskilling

Bright people with raw talent, energy, and adaptability make excellent candidates for internal training. Denise Campbell,  a Marsh senior vice president, graduated from New York University with a major in music technology. She joined AIG as an administrative assistant and, when offered a promotion, admitted to her manager that she had no experience in the field.

 “We can teach you the skills you need to do the job,” her manager countered, “but we can’t teach someone to be you.”

Reskilling and upskilling are vital to meeting insurers’ future talent needs because hiring externally is expensive and time consuming. Replacing an employee can cost more than 100 percent of the role’s annual salary, while successful reskilling can cost less than 10 percent, according to McKinsey.

“Since growth in digitization is moving so quickly, an agile workforce that’s open to re-skilling constantly is crucial,” said Frank Tomasello, executive director at the Institutes Griffith Foundation.

A good learning and development program will incorporate the latest insights on adult learning methods, and combine in-person, digital, and—especially important—on-the-job learning, where a whopping 80 percent of adult learning happens. The Institutes – a leading provider of insurance education – develops courses based on the latest knowledge about how people learn, incorporating videos and animation and breaking down learning into manageable chunks. Triple-I is an affiliate of The Institutes.

Diversity and innovation

Insurers are making diversity and inclusion a priority, and there are many reasons to do so: Research indicates that more diverse companies tend to perform better; customers  increasingly  prefer companies that demonstrate values like social equity; and a more diverse workforce is more appealing  to workers.

The industry has long known of the valuable role internship programs play in its quest to find fresh talent. Grinnell Mutual has a top-ranking co-op and internship program that draws recruits from many universities in Iowa.

Going into high-schools and getting an early start in reaching potential employees is another valuable step in building the talent pipeline. Nicole Riegl, president of the Agent and Broker Group at The Institutes, is on the board of directors at Invest℠ an organization that connects insurance professionals with teachers. Invest volunteers visit the classroom to teach students about insurance and share their career experiences.

And recently, insurance giant, Zurich North America announced plans to hire apprentices in at least nine cities, as well as in certain agricultural areas where Zurich’s crop insurance business operates.

“We’re growing the Zurich Apprenticeship Program because apprentices have brought value to our business from the very beginning,” said Zurich North America CEO Kristof Terryn. “This is a talent source that has proven its value and versatility through many different market conditions, including at the height of the pandemic, when we expanded our program from our suburban Schaumburg headquarters to New York City.”

As the industry evolves, it can continue to leverage one of its greatest assets for attracting talent – its appeal to people who are drawn to work that puts a premium on human relationships. The industry’s role as a financial first responder that helps people get back on their feet after a disaster and as a provider of sophisticated financial instruments that encourage responsible risk taking, is certain to continue to draw people who are looking for meaningful work.