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.”