Will Technology shrink the Talent gap in insurance industry?
As we all know, our industry has long needed to attract better talent.
In 2010, the consulting firm, McKinsey & Company, conducted a four-month review of the current talent situation in the industry and developed recommendations to turn the industry into a magnet for the best young talent. The study is “Building a Talent Magnet How the Property and
Casualty Industry Can Solve Its People Needs“. The industry has a great deal of work to do in this area.
However, I wonder if some of the data or takeaways in the 2010 study correctly forecast the impact of technology enhancements.
The property and casualty insurance industry faces three challenges in attracting high-quality talent: a poor reputation, a limited understanding
among high school and college students of the industry’s career opportunities, and a limited pool of trained talent.
As the workforce matures and the baby-boom generation retires, insurers will compete for new young talent. It has been suggested that the number of employees needed to refill these positions is hundreds of thousands. Requiring the industry to hire 40-60,000 young employees a year just to replace the retiring workforce.
Will Technology shrink the Talent gap issues in the insurance industry? Will InsurTech specifically close the gap on the needs of the Insurance Industry? Or Cap Ex in technology by Incumbents? Is this still a crisis? Has an influx of capital and technology reversed or stopped the talent issues of the industry?
Are pressures from InsurTech on the expense ratio (Like Lemonade’s 20% fee) causing Incumbents to consider less staff, real estate, etc. in an effort to lower the expense ratio?
It seems like the InsurTech players have read the study and trying to address this problem. The reputation of the industry is being attacked by a few players, and highlighted by others of ways to improve. The market size and opportunity to disrupt is being embraced by disruptors and their talent pool. The are getting younger talent interested in the industry and training them on some of the basic principles of insurance.
Not all of these InsurTech firms will succeed, this talent many decide to come over to the dark side of the incumbent insurance firms. Incumbents offer many of the qualities — including stability and social relevance — sought by young Americans.
Maybe we should be thanking InsurTech firms as they are helping solve our Talent gap issues on many fronts.