The Insurance Industry Talent and Technology Tug of War

By John Stammen, Convr CEO

The insurance industry, known as one of the oldest and most traditional industries for a younger generation of workers, is under press to perform. Following “the great resignation,” insurance companies are faced with even greater talent challenges than what they were experiencing before the COVID-19 pandemic.

You see, this manifested in the tug of war brewing between bosses and employees around in-office work. In a post-pandemic environment, across industries and many other industries, we continue to see workers walk away from traditional in-person jobs in hopes of securing work-from-home positions that lean toward a more flexible work environment.

This tug of war was underscored in findings uncovered in the Insurance Talent and Tech Trends Survey my company Convr recently commissioned. The survey screened a statistically significant sample of insurance underwriting leaders and reconfirmed that there’s a growing talent pool demanding remote work opportunities in the current insurance labor market. The survey data also strongly suggests that if insurance providers improve their technology stack, they can attract more and better talent; and those workers would have a greater ability to work successfully from home.

This is the undeniable future of the insurance industry’s labor market. It requires companies to increase flexibility and modernize their processes to offer an increasing number of remote and hybrid work opportunities, as the appetite for these jobs will only increase from here. Workers see remote roles as bringing a glimmer of hope to what a balanced work-life could look like; while underwriting leaders say remote positions and work opportunities are the most common request made by new underwriting hires.

Here’s what the staffing situation looks like now:

• 64% of underwriting leaders say their team is currently understaffed
• 63% of underwriting leaders aren’t sure they are staffed for growth
• 56% of underwriting leaders say more than 20% of their job openings have remained unfilled for three months or longer

Considering the typical day in the life of a commercial property and casualty (P&C) underwriter, it doesn’t take much imagination to understand, with better tech solutions, how many common tasks can be better performed, if not automated entirely — satisfying employees to work at home while improving productivity.

Indeed, 78% percent of underwriting teams say better technology, internal or outsourced, prevents employee attrition and could keep people on the job longer, with nearly 90% certain that better technology helps attract younger talent. Job satisfaction can only improve with remote work options, as some commercial P&C insurance managers and above believe that remote-only underwriting workers are less likely to quit than those in-office.

Technology is clearly the direction of today’s underwriting teams, and nearly 85% of leaders already expect more underwriting work to be automated. A huge driver could be that most underwriting leaders believe that manual data entry, central to the job of an underwriter, is tedious. On any given day, an underwriter typically analyzes information on insurance applications and other sources for sometimes many hours to collect the data required to determine risk exposures, appropriate premiums and amounts of coverage.

Still, many underwriting teams have long lists of open jobs. The quantitative skills needed for underwriting are also in high demand in other industries such as tech and artificial intelligence (AI), so carriers continue to grapple with attracting and hiring a diverse core of young talent. Moreover, a younger talent pool expects a workplace with digital technology solutions and tools at their fingertips (something traditional brick-and-mortar insurers and reinsurers are not known for).

As it turns out, the industry is not fully addressing worker demand. Despite the numbers above, only 10% of insurance leaders say their team is attempting to attract underwriting talent by offering remote work opportunities. When insurance providers don’t meet worker expectations for jobs, they can fall further behind — turning off talent and widening the gap between qualified candidates and vacant roles.

Worse, understaffing and unfilled positions are adding up to loss. Some 48% of underwriting leaders say understaffing is negatively affecting their expense ratio. Nearly 44% of commercial P&C executives also indicate that with some frequency, understaffing causes inaccurate information to inform their quotes. There is not much optimism surrounding hiring for underwriting teams, either, with only 39% of underwriting leaders highly confident they’ll hit their hiring quotas in 2023 – a terrifying number that will keep many up at night this year. An incentive to keep younger staff on the job — for a period, at least – is by recalibrating the dynamic of how teams work and balance remote life.

To do that, they must recognize that true transformation requires more than new technology. Insurers, producers and reinsurers need to begin shifting their organizational mindset and culture. This is the secret to true competitive advantage. If remote roles do not mesh with your operation, another strong option is to adopt innovative digital solutions.

In 2023, insurance companies should be primed to transform underwriting operations and talent management efforts if they want to remain competitive. Significantly more underwriting tasks could be automated. Remote work remains a big demand of new hires and prospective talent. Recent data underscores a critical gap exists between operational realities and the expectations of effective talent around technology and automation. As such, technology remains the key to recruitment and retention.