Rebuilding the Insurance Industry's Talent Pool

According to recent research, employees over the age of 60 comprised about 12% of the insurance industry workforce in 2022, a slight decline from 2020 (Aon Ward Group & The Property Casualty Insurers Association of America, 2023). The impending mass retirement of these seasoned professionals has raised alarms across the board. With this demographic exiting the workforce, companies are struggling to find equally experienced replacements. The average tenure in the industry is decreasing, compelling insurance firms to hire less-experienced individuals to fill the void. Effective knowledge transfer becomes crucial as experienced employees leave. Insurance companies must establish robust mentoring and training programs to ensure that valuable institutional knowledge is not lost.

While layoffs have impacted certain areas of the insurance sector, more than half of the companies expect to increase staffing in the upcoming year. This juxtaposition highlights the industry’s complex talent needs.

In recent years, the insurance industry has experienced a surge in technology and data-driven roles. With an increasing reliance on digital tools and analysis, companies are seeking individuals with expertise in these areas. Additionally, there is a growing demand for diverse candidates to bring new perspectives and ideas to the table. There is a noticeable desire among insurance firms to expand their workforce. However, the challenge lies in attracting and retaining skilled professionals in a competitive job market.

While it was once common practice for new generations to “learn the ropes” by handling rote servicing and policy administration tasks, Gen X and Millennials have far less patience for this. They expect to advance into their careers quickly and embrace the power of automation and artificial intelligence. This is where outsourcing partners are becoming even more valuable. Working with insurance outsourcing partners can help companies bridge the talent gap. These partners have extensive resources, 24-hour staff, and the insurance expertise to find and place the right candidates efficiently.

The insurance industry is witnessing a significant shift in employee tenure and turnover rates. Companies are grappling with how to retain talent while also addressing the influx of less-experienced workers. To combat high turnover, companies should focus on improving employee engagement and offering career development opportunities. Creating a positive work environment can significantly enhance retention rates. Targeting younger professionals and recent graduates can help build a sustainable talent pipeline. Offering internships and entry-level positions with clear career progression paths can attract this demographic.

Projections indicate that base salaries in the insurance sector will rise by about 4% in 2024. Merit increases are expected to range from 3.5% to 4%, with additional promotional budgets contributing another half-point. The adoption of pay transparency laws across various states will impact hiring, compensation, merit, and bonus trends. Companies must adapt to these regulations to remain competitive. While having in-house talent is key, it is recommended to look for insurance-specific virtual assistants to fill gaps.

Some agencies and brokerages may not fully understand where and how they can leverage a virtual assistant; imagine having an assistant and a fraction of the cost – there when you need them, won’t quit, won’t leave you once you train them, and will be dedicated to your organization. You don’t have to worry about payroll, taxes, or federal or state hiring laws – just work however you want and when you need to.

The insurance industry must address the skills gap to remain competitive. The industry must explore ways to engage and design programs that encourage younger employees to enter the insurance industry with greater purpose and intention. Continuous learning and development programs are essential to equip employees with the necessary skills. Investing in comprehensive training programs can help employees stay updated with industry trends and advancements, boosting morale and retention rates. Access to online courses, workshops, and certifications can facilitate continuous professional growth.

The talent exodus in the insurance industry is indeed real, but it also presents opportunities for growth and innovation. By adopting strategic measures such as leveraging technology, fostering a diverse workforce, and partnering with experienced insurance outsourcing firms, companies can effectively address these challenges and thrive in a competitive market.

For human resource managers, agency owners, and employee benefit managers, the key lies in staying adaptable and proactive. By prioritizing employee engagement, competitive compensation, and continuous learning, the insurance industry can attract and retain top talent, ensuring a resilient and dynamic workforce for the future. Explore the benefits of insurance outsourcing and discover how our expert partners can help you overcome these challenges and achieve your organizational goals.

Aon Ward Group & The Property Casualty Insurers Association of America. (2023, April). Human Resources and Employee Benefits Practices. Fresh insights from property-casualty insurers. Retrieved from Aon Ward.