This latest Opinion piece is by Mark Anquillare, Chief Operating Officer and Group President at Verisk.
Where is the next generation of insurance professionals? Workforces are aging quickly, and the insurance industry is not immune. The 65-and-older population grew more than 34 percent over the last decade, according to the U.S. Census Bureau. Factor in what many have dubbed the “Great Resignation,” and we’re faced with a looming shortage of talent. It’s expected that the industry will need to hire 500,000 new professionals over the next several years, a fifth of today’s insurance workforce. This impending shift may result in a massive loss of institutional knowledge, creating one of the biggest challenges facing the industry today.
One obvious solution to address the insurance industry talent crisis—hiring a younger workforce—is proving to be difficult. Younger generations don’t seem to find insurance compelling or exciting, and Millennials and Gen Z, as a whole, are being drawn to industries other than insurance.
While confronting the recruitment challenge facing the insurance industry likely requires incremental steps, here are several considerations for industry leaders to help address the talent gap.
The Promise of Automation, AI and InsurTech
Automation and Artificial Intelligence (AI) are key to addressing the talent gap. The Pareto Principle, named for the 20th century economist whose theory is used to explain how 20 percent of input into a process generally creates 80 percent of the results, is a valuable frame of reference. Applied to insurance, we might look at automating the basics of our processes (80 percent) and focusing human talent (20 percent) where it matters most, such as on the most complex underwriting risks and biggest claims.
InsurTech is poised to contribute to a profound transformation of the insurance industry and has many in the industry energized in a whole new way. Many insurers have embarked on a technical revolution to automate their processes and digitally engage with policyholders more effectively as part of the interconnected ecosystem. With its potential to free professionals from rote tasks to focus on more complex cases, the advent of InsurTech may represent one of the most powerful recruiting tools available. As InsurTechs typically require a propensity for technology and naturally attract a younger demographic, we should capitalize on this opportunity to attract fresh young talent that grew up amid the tech revolution of social media to help address the evolving expectations of insurers and policyholders regarding digital engagement.
A New Narrative
Some of the changes needed to close the talent gap require technological advances, but simply changing the narrative can help with recruitment. We must tell a more compelling story about what it means to work in the insurance industry.
There’s no one better suited to tell the story of a rewarding career in insurance than the industry’s current professionals. They can talk about their career paths, what compelled them to pursue and grow their career in the insurance sector, explain their role and illustrate how it contributes to the greater good. Few industries play as pivotal a role in modern society as insurance, enabling everything from autonomous vehicles to entrepreneurism to mitigation of the impacts of climate change. Sometimes we forget what it was about the industry that we found exciting or intriguing, entering our professions as we did when we were the same age as today’s young professionals.
Millennials are often described as an idealistic, altruistic generation; they often want to make the world a better place and therefore tend to seek careers with a purpose. Insurance is all about assisting people—especially those in need—and helping to enable resilience. Challenges like climate change, political unrest and economic inequality are impacting communities worldwide and causing employees to increasingly look for purpose-driven work that contributes to a more sustainable tomorrow. Insurance facilitates commerce, improves the safety of society and helps humanity endure perils. For a young person who wants to make a difference, the insurance industry can offer an ideal opportunity. And it is important to make sure they know it.
It’s our responsibility to become advocates for the industry and stay accountable for its future. A future rooted in advanced technology will undoubtedly help inform the skills needed for the workforce’s next generation. But we can’t afford to stay quiet and hope the insurance professionals of tomorrow will stumble upon the industry much like many of our colleagues have in years past. After all, an industry that prides itself on preparing for the unknown deserves a bit more recognition—and the talent to help it thrive.