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The Insurance Talent Crunch: How Technology and Upskilling Can Help

Highlights

  • 50% of the current insurance workforce will retire by 2036. And to make matters worse, currently less than 25% of those working in the insurance industry are under the age of 35.
  • Roles requiring technology skills top the talent crunch list: cloud engineering, data science, AI, software development and cybersecurity.

The insurance industry is facing a talent crisis. Over the coming years, the talent crunch could likely get worse, and insurance carriers will need to adapt. By implementing new technologies and offering skill development to workers, insurers can digitally engage tomorrow’s workforce.

A Confluence of Factors

Right now, most industries are facing labor shortages as a result of high quit rates. According to the U.S. Bureau of Labor Statistics1, more than 4.4 million workers quit in April 2022. The quit rate for all private industries was 3.2%. So, it is no surprise that recruiting and retaining the right talent is one of the biggest challenges insurers currently face.

The United States Bureau of Labor Statistics also reports that 50% of the current insurance workforce will retire by 2036. And to make matters worse, currently less than 25% of those working in the insurance industry are under the age of 35.2 Why is that?

Research indicates that the insurance industry is extremely low on the list of where millennials would choose to work. A study from ACORD found that less than 4% of people born between 1981 and 1997 would consider working for insurance companies. And since it’s expected that this age group will constitute 75% of the global workforce by 2025, that does not bode well for the insurance industry.3

If the insurance industry cannot transfer insights and skills quickly to new workers, a huge knowledge gap will ensue. And if it can’t attract younger workers, a severe labor shortage is inevitable.

Attracting Entry Level Workers

Insurance companies need to attract new entry level workers that can get a foothold in the industry. That sounds simple, but there’s a catch – young workers have many entry level jobs to choose from, and because interest in insurance is already low, insurance companies will have to work extra hard to compete for them.

Companies are touting attractive compensation packages, flexible work arrangements and a supportive company culture as they compete for workers. This could help. According to FlexJob4, 59% of workers cite low salary as a reason for quitting, while 43% cite a lack of remote work options and 62% cite a toxic company culture. The survey also found that 37% cite limited advancement opportunities and career progression as a reason for leaving a position.

The Need for Reskilling & Upskilling

According to a recent research report from Strategy Meets Action (SMA), the retirement wave in the insurance industry will be occurring during a period of unprecedented innovation and transformation in the insurance industry. This transformation will drive the need for new skill sets. Reskilling will become critical. In fact, SMA research results show that 96% of insurers consider retraining to be a top or even a number one priority.5

To be better able to compete for talent, the insurance industry must follow a multi-faceted approach that addresses reskilling, work-life balance, and the needs of a remote work force. Insurers will need to make roles more challenging by offering upskill opportunities. These could allow contact center representatives to learn more about claims adjusting or technical configuration. Innovative training techniques will be needed to equip staff with critical skills and increase employee retention.

This is exactly what insurance leaders discussed at the 2021 Connected Claims Conference. The Auto Club Group, for example, has expanded the role of contact center representatives, making the position more complex and interesting. They have also focused on giving entry level workers an opportunity to prove themselves and earn a fast track to higher level positions. Ohio Mutual Insurance offers trainee and internship programs, as well as a focus on flexibility and continuous improvement that encourages workers to develop new skills.6

At Farmers Insurance, they have incorporated the use of both augmented and virtual reality to help train employees to deliver more empathy and provide their customers with an optimized claim experience. Leveraging AR and VR, they have been able to train with real life scenarios to help increase confidence and accelerate the learning curve for new employees before they deploy to the field. 7

The Role of Technology

The insurance industry has been going through a period of digital transformation and rapid technological growth. Technical skills have become increasingly important, and a recent Deloitte global survey found that roles requiring technology skills top the talent crunch list: cloud engineering, data science, AI, software development and cybersecurity.8  Finding skilled developers who also understand the nuances of insurance is especially challenging.

The utilization of low-code and no-code tools can help to offset this shortage by providing insurers with visual tools to develop software easily and quickly. Since low code/no code development requires little technical knowledge, business partners are empowered to design, build and test. This not only provides additional opportunities for role expansion within the business areas, it expands development resources that contribute to growth.

As insurers deal with the talent crunch, technology will continue to play a major role. And this may actually be a benefit. Younger workers may not be interested in insurance careers, but they are definitely interested in technology careers. The increased focus on technology in insurance could make the industry more appealing to them. 

Technology is also driving increased automation of insurance tasks. By handling the routine and often tedious tasks, automation can lighten workloads, reduce burnout, and free workers to focus on more meaningful responsibilities, which can only help attract talent. 

Moving Forward

The insurance industry is changing, both in terms of technology and labor. To succeed, insurance companies need to embrace new tools while engaging their workforce. One Inc offers low-code/no-code technology and automated billing reconciliation capabilities that can offset talent shortages, boost operational efficiencies, and support employee engagement and upskilling.

Interested to learn more about how our solutions can help you level up your technology while addressing the insurance talent crunch? Contact us.

Sources:

  1. https://www.bls.gov/news.release/pdf/jolts.pdf
  2. https://www.uschamber.com/workforce/education/the-america-works-report-industry-perspectives
  3. https://www.insurancebusinessmag.com/ca/news/breaking-news/report-reveals-truth-about-how-many-millennials-want-to-work-in-insurance-227021.aspx
  4. https://www.flexjobs.com/blog/post/survey-resignation-workers-considering-quitting-jobs/
  5. https://strategymeetsaction.com/our-research/p-and-c-insurance-talent-and-the-workforce-imperatives-for-success-in-the-post-pandemic-world/
  6. Insights shared at Reuters Events, Connected Claims USA 2021, Live Panel: ‘Deploy the upskilling strategies and digital tools to achieve claims automation at scale’
  7. Reuters Events, Connected Claims USA Post Event Report, Future Claims: Adaptable, Innovative and Inherently Good, Dec 2021
  8. Deloitte Insights: 2022 Insurance Industry Outlook (Digital and talent transformation accelerating as insurers adapt for post pandemic growth), Nov 2021.

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The One Inc Content Team strives to provide valuable insights about digital trends and payments innovation for the insurance community.

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