The cycle of doing more with less is starting to catch up with the insurance industry. This year, 25 percent of insurance professionals are expected to retire, notes David Coons, SVP of the Jacobson Group. Further, by 2020 the industry will need to fill approximately 400,000 positions to remain fully staffed. Meanwhile 40 percent of demand for managerial and technical talent will be met by current staff, reducing the opportunity to develop in-house staff and perpetuating the cycle.
Even among the largest insurers, talent is a problem. Brian Duperreault, who joined a struggling AIG as CEO in May, drew a sports analogy to mind when he noted during the company’s Q2 2017 earnings call in August that he wanted to focus on rebuilding the insurer’s formerly deep bench of talent. “There is no question AIG lost talent, but it was also blessed with a strong bench,” Duperreault said. “The job now is to rebuild that bench.”
To me, the “bench strength” analogy speaks to insurance leaders today from companies large and small who are responsible for keeping their “players” engaged, and ensuring every position on their team is filled or ready to be filled at any given point with capable talent, despite players dropping off the team for whatever reason.
February has been designated the 3rd Annual Insurance Careers Month, and it serves to remind us that before we can fortify our benches with talent, we face a couple of uphill battles. First, the industry continues to suffer from false yet pervasive negative perceptions. People mistakenly tend to think that the typical insurance company’s value proposition is to take advantage of policyholders with premium spikes while finding ways to negate or reject legitimate claims. And because many insurers continue to struggle with inadequate systems to facilitate top-notch customer service, that perception continues. Negative perceptions contribute to another misnomer: that insurance is a boring industry, therefore young and vibrant talent avoid it in favor of other industries such as banking.
These negative perceptions tend to have the largest impact in IT, where, of the 25 percent of insurance professionals expected to retire, many workers are exiting key technology positions, leaving those remaining without the necessary legacy systems’ knowledge to “keep the lights on.” This is especially critical for smaller insurers, because young, innovative technology-native workers want to be challenged with new technologies, not spreadsheets or outdated systems.
There are a host of other logical reasons why evaluating your current technology platform and related policy management systems is a good idea. As one basic example, moving to a Software as a Service environment is cost effective, fast, secure and reliable. If you need other reasons, consider your underwriting program or customer service efforts—are they best served with current workflows or technology? What about your distribution network—are your agents able to communicate with you in real time using portal technology or are they forced to conduct business manually? Are you in a position to employ analytics to improve your business outcomes?
As we move into the next generation, it’s becoming very clear that our industry is anything but boring. Insurtech disruption is impacting companies of all sizes, and our business models are changing as a reflection of the ever-evolving needs of the customer. In order to best respond to these changes, insurers need to adopt current technologies that will improve the business operations that allow for accurate and agile responses. That same attitude toward modern technology adoption will attract the right talent in all of your organization’s functional business areas.
You don’t have to be a company the size of AIG to realize that without modern technologies, you can’t court the best possible talent. And without the best possible talent, your bench strength will weaken, making it even more difficult to rebuild and successfully compete.