The insurance industry is facing a steep talent shortage. One way industry leaders can shore up a growing skills gap? By leveraging AI and machine learning (ML) to power automation and deliver insights to evolve workforces.
With climate change-related natural disasters multiplying and geopolitical volatility rising, the insurance industry isn’t declaring a sunny outlook on the future. In fact, 70% of insurance organizations feel unprepared for coming disruptions or are pessimistic about market prospects, a 2023 IDC study found. That number rises to 86% for the C-suite.
One reason industry leaders feel unprepared? The industry’s looming talent crisis. By 2026, U.S. insurers could lose 400,000 workers through attrition, according to the U.S. Bureau of Labor Statistics.
And as the wave of retiring baby boomers gains strength, the industry will struggle even more to fill roles. Less than 25% of the insurance industry is younger than age 35, according to the U.S. Chamber of Commerce.
Facing a widening talent gap, insurers are turning to tech for solutions. Technology is the top priority for insurers worldwide, edging out profitability and customer satisfaction, IDC found.
The industry’s digital transformation is speeding up. A lack of important technology and data analytics skills, however, is hindering some organizations. A global Workday study revealed that just 41% of insurance leaders believe they have the skills to keep pace with new and emerging finance technology.
Even the most brilliant recruiting strategies won’t solve the talent and skills gaps insurers are facing anytime soon.
HR leaders in the industry should reconsider their approach to workforce development, says Nicole Carrillo, managing director, financial services industry, at Workday. The value of tools incorporating AI and machine learning (ML) in HR is growing by the month. But outside of finance, it’s not getting enough attention.
“AI’s potential value for insurers in addressing skills gaps, evolving roles, upskilling practices, and even facilitating knowledge transfer is underestimated by many HR leaders,” Carrillo says. “More broadly, the latest AI and ML capabilities can augment insurers’ risk management competence and help to attract top-tier talent.”
By 2026, U.S. insurers could lose 400,000 workers through attrition, according to the U.S. Bureau of Labor Statistics.
If any industry understands the value of data, it’s the insurance industry. Insurers have used actuarial tables to identify and mitigate risk for hundreds of years. However, some HR leaders may not fully recognize the potential value AI can add, particularly to workforce data to manage talent risks.
“Simply put, an HR platform that integrates AI can help close skills gaps and prevent them from occurring,” Carrillo says. “Technology can evolve roles and training approaches, which ultimately improves the employee experience and helps to attract promising new talent.”
What does this look like in practice? Large data models can capture employee self-assessment data and skills requirements tied to roles, teams, and functions to get a handle on the current skills landscape.
The upshot is an HR platform that tracks and flags skills trends such as unusually high turnover in certain roles or demographics, giving HR the ability to troubleshoot and potentially reverse the trend. HR leaders can also leverage future skills gap predictions to get ahead of big problems, such as retirement-driven attrition. And AI-supported tools can help prevent key knowledge loss from baby boomers walking out the door.
“AI can help capture what employees do to help develop training materials and document procedures and processes,” Carrillo says. “This can actually be more detailed than having an employee try to write everything down.”
Technology not only helps transfer decades of institutional knowledge from outgoing veteran employees to their replacements, but it also helps new employees find their footing. As an example, chatbots can serve as training assistants to supplement human guidance.
“Custom-built AI tools are going to reduce learning curves, closing the gaps between, say, deeply knowledgeable retiring underwriters and adjusters and the new team members filling their roles,” Carrillo says.
“Adopted thoughtfully and creatively, AI can help firms future-proof their workforces to handle the fast-changing risks that are the industry’s new normal.”
Nicole Carrillo
Managing Director, Financial Services Industry
Workday
The skills needed to effectively assess, price, and manage risk are changing with a rapidly evolving risk landscape. Fortunately, insurers can use AI to better map and fill skills gaps through bolstered analytics and automation—and faster time to insights.
AI can be particularly helpful in allowing industry IT and finance leaders to achieve top digital transformation goals such as improved intelligence gathering and risk management and compliance. Here’s how AI can help insurers in both areas:
Intelligence gathering. Generative AI’s power derives from tracking patterns in data—massive amounts of data. Custom AI models built around geography-specific climate change scenarios or millions of policies from industry data lakes and company clients can power valuable insights that support underwriters as they assess and price new policies.
Risk management and compliance. AI can help automate capabilities that boost reporting efficiency as well as improve claims prioritization and processing. Tools trained on millions of claims can reduce mundane tasks so specialists can focus on more strategic work.
“The big picture is clear when it comes to analytics and automation: AI can help insurers from upskilling actuaries to freeing the claims team to focus on complex cases that require more attention and expertise,” Carrillo says.
“Custom-built AI tools are going to reduce learning curves, closing the gaps between, say, deeply knowledgeable retiring underwriters and adjusters and the new folks filling their roles.”
The dividends for insurers that can result from leveraging AI and ML in innovative new ways are very real. Allowing employees to address higher-value work can help create a more engaged, happier workforce—and that can both slow attrition and attract more in-demand talent.
“To the extent that insurers embrace new technology to evolve skills and how work gets done, it’s not hard to imagine young, tech-savvy talent being more interested,” Carrillo says. “People want to work at creative, innovative companies.”
Given the insurance industry’s intensifying talent crisis, sticking with the status quo isn’t a viable option. Financial and business services (including insurance) is facing a projected 10.7 million worker shortfall by 2030—the largest shortfall of any industry, according to Korn Ferry’s “Global Talent Crunch” report.
As any HR leader in insurance knows, the workforce stress test has begun. AI is no panacea, Carrillo emphasizes, but “adopted thoughtfully and creatively, AI can help firms future-proof their workforces to handle the fast-changing risks that are the industry’s new normal.”
To best meet intensifying challenges, insurers are becoming digital leaders—adopting cloud-based management platforms that make the most of their wealth of data.
Eric Chung, director of HR systems at Sun Life, shares how the organization delivers innovation while supporting changing business needs with Workday Extend.
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