Addressing the insurance industry talent gap

Insurance organizations in coming years are projected to lose employees to retirement at a higher rate than young professionals joining the industry.

Approximately 10,000 baby boomers will reach age 65 each day until the year 2030, according to the Pew Research Center. As innovation continues to flourish and take prominence in the insurance industry, the industry also will need people with different skill-sets to tackle emerging technologies, analytic techniques and data governance.

AM Best is hosts of the annual Emerging Leaders Conference along with the Insurance Careers Movement and the American Property Casualty Insurers Association of America. The event takes place as part of Insurance Careers Month, and is part of the industry’s efforts to support the development of new and talented insurance industry professionals.

In the past year, AM Best sponsored a college student’s attendance at the annual Chartered Property and Casualty Underwriter Society’s Annual Meeting, as well as participated in the Insurance Careers Movement’s Open Letter to College Graduates Campaign.

AM Best has watched the insurance industry come together in a short time on the critical talent-gap issue. Today, the Insurance Careers Movement has grown to more than 850 different insurance carriers, companies, media organizations and third-party vendors from around the globe.

Behind AM Best’s greater focus on raising awareness of the diverse career options that risk management and insurance offers is its own efforts to attract talent into its organization. Financial analyst training programs, support for career development and imparting knowledge about how insurance works and how all the different aspects of insurance interfaces are all steps AM Best has taken to try to draw more millennials.

Related: Tackling the top talent issues facing the insurance industry [podcast]

‘Insurance is boring’

The insurance industry has its negative stereotypes, and being boring may be at the top of that list. Redefining stereotypes and reframing the positives are key elements to attracting new talent. It should be noted that college graduates generally are not consumers of insurance, so finding a way to get insurance in front of schools that do not have risk management programs so they then can introduce the topic to students is paramount.

Some industry efforts have included reaching down into the high school level when teenagers are formulating an idea of what to study at college.

Another key step in these efforts is showcasing how insurance protects communities and how the industry is involved in those communities. These are key ideals that millennials tend to focus on; the more the industry can do in highlighting that there is a place within for all interests, the more it will resonate with millennials. That discussion can become one about industry image. Everybody knows GEICO’s “give us 15 minutes” campaign, but the level of industry understanding then can become one that is very narrow and predominantly focused on personal auto insurance.

How the industry can get beyond personal experiences and expose younger generations to the much broader commercial insurance industry remains a challenge.

AM Best also recommends using millennials to talk to millennials. Companies have told AM Best that they are bringing recent college hires to campus events because it is important that prospective employees hear from their peers.

Insurance companies that have embraced the digital world also will have an easier time attracting new talent. The reputation of the industry has been paper-filing and transactional in nature with archaic computer systems. That may be still true in some places, but AM Best has watched companies take the onus to raise their game with regard to technology in order to differentiate themselves in the marketplace, as well as institute corporate policies that let employees work remotely with a laptop.

The use of social media, data analytics and the impact of emerging technology are driving huge changes. With the Internet of Things, autonomous cars and future technologies not even dreamed up yet, the question is how are companies going to deal with coverages? So many different facets within the industry touch on technology now, which fits right into the heart of what millennials are looking for. The industry needs to change how it promotes itself, and millennials already in the industry can be a big part of those efforts.

Related: In their own words: What the next-gen of P&C professionals really want (Video)

Retaining new talent

Financially supporting a young employee’s journey is a good way to retain that new talent once you have it. Millennials can be burdened with huge amounts of college debt. Companies have instituted benefit programs to help pay down college debt. AM Best offers bonuses for those employees that achieve professional designations. Showing an investment in the employee is an important step a company can take from a retention standpoint. In turn, the employee hopefully will invest in a commitment to stay within the organization. 

The underlying theme is finding what is meaningful for younger employees and what gives them a sense of purpose. Insurance has a reputation of being conservative and stiff, and AM Best, along with many other companies, have been looking for ways to have new talent connect more to their respective organizations.

Programs and initiatives that promote community service, and helping individuals feel as if they are part of a greater good, are a large part of that. For example, in addition to the aforementioned benefit programs, AM Best offers paid time off for volunteering. Career development is a key piece, and how a company can help an individual achieve its employees’ goals hopefully makes those individuals feel like a key cog in a team in which they will want to remain.

AM Best’s advice to younger individuals entering the insurance industry is to focus on learning and explore the many possibilities the industry offers to find one that best fits interests and strengths. As a credit rating agency, AM Best has a unique perspective of the overall insurance industry and has always played a constructive role in it through its assessments of insurance companies’ financial strength. Ultimately, insurance is a purpose-driven industry, and those that work within it can make a positive impact on individuals, businesses and communities around the world.

For more coverage like this, explore our Careers in property & casualty insurance: What you need to know Instant Insights page.

Matthew Mosher (public_relations@ambest.com) is the executive vice president and chief operating officer for AM Best Rating Services Inc. These opinions are the author’s own. 

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