The tug of talent and technology in the insurance industry

Workers see remote roles as bringing a glimmer of hope to what a balanced work life might look like; while underwriting executives say remote positions and work opportunities are the most common request made by new underwriting hires. (Credit: Alexander Limbach/Shutterstock.com)

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

You see, this manifested itself in the arm wrestling between bosses and employees around office work. In a post-pandemic environment, through insurance and many other industries, we continue to see workers moving away from traditional in-person jobs in hopes of securing work-from-home positions that lean toward a more flexible work environment.

This tussle was highlighted in the results uncovered in the survey of insurance talent and technology trends that my company Convr recently commissioned. The survey examined a statistically significant sample of insurance underwriting executives and confirmed that there is a growing talent pool demanding remote work opportunities in today’s insurance job market. The survey data also strongly suggests that if insurers improve their technology stack, they can attract more and better talent; and these workers would have a greater ability to work successfully from home.

This is the undeniable future of the insurance industry job market. This is forcing companies to increase their flexibility and modernize their processes to provide an increasing number of remote and hybrid work opportunities, because the appetite for these jobs will only grow from here. Workers see remote roles as bringing a glimmer of hope to what a balanced work life might look like; while underwriting executives say remote positions and work opportunities are the most common request made by new underwriting hires. Here’s what the current staffing situation looks like:

• 64% of underwriting managers say their team is currently understaffed
• 63% of underwriting managers aren’t sure they have the staff they need for growth
• 56% of underwriting managers say more than 20% of their job openings have been vacant for three months or more

Given the typical day in the life of a property and casualty insurer, it doesn’t take much imagination to figure out, with better technology solutions, how many common tasks can be done better, if not fully automated – keeping employees happy to work at home while improving productivity.

In fact, 78% of underwriting teams say better technology, in-house or outsourced, prevents employee attrition and could keep them on the job longer, and nearly 90% are certain that better technology helps attract young talent. Job satisfaction can only improve with remote work options, as some commercial and above property and casualty insurance managers believe remote underwriters are less likely to quit than incumbents.

Technology is clearly the direction of underwriting teams today, and almost 85% of executives already expect more underwriting work to be automated. A huge factor could be that most underwriting managers think manual data entry, essential to an underwriter’s job, is tedious. Each day, an underwriter typically analyzes insurance application information and other sources for sometimes many hours to gather the data needed to determine risk exposures, appropriate premiums, and coverage amounts.

Yet many underwriting teams have long lists of open jobs. The quantitative skills needed for underwriting are also in high demand in other sectors such as technology and artificial intelligence (AI), so insurers continue to struggle to attract and hire a diverse core of young talent. Additionally, a pool of younger talent expects a workplace with digital technology solutions and tools at their fingertips (something traditional insurers and reinsurers are not known for).

It turns out that the industry does not fully meet the demand of the workers. Despite the figures above, only 10% of insurance managers say their team tries to attract underwriting talent by providing remote work opportunities. When insurers fail to meet workers’ job expectations, they can fall further behind, excluding talent and widening the gap between qualified applicants and vacancies.

Worse still, understaffing and unfilled positions add to the loss. Some 48% of underwriting managers say the lack of staff negatively affects their expense ratio. Nearly 44% of commercial P&C insurance executives also report that with some frequency, understaffing leads to inaccurate information to inform their quotes. There isn’t much optimism about hiring underwriting teams either, with just 39% of underwriting leaders very confident that they’ll hit their hiring quotas in 2023 – a terrifying number that will prevent a lot this year. One incentive to keep younger staff on the job — for a while, at least — is to recalibrate the dynamics of how teams operate and balance remote living.

To do this, they must recognize that true transformation requires more than new technologies. Insurers, producers and reinsurers need to start changing their organizational mindset and culture. This is the secret to true competitive advantage. If remote roles don’t fit your business, another great option is to embrace innovative digital solutions.

In 2023, insurance companies should be ready to transform their underwriting operations and talent management efforts if they want to stay competitive. Many more underwriting tasks could be automated. Remote work remains a big demand for new hires and potential talent. Recent data underscores that there is a critical gap between operational realities and the expectations of effective talent when it comes to technology and automation. Thus, technology remains the key to recruitment and retention.

John Stammen is CEO of Convr, revolutionizing the commercial underwriting process with cutting-edge AI and decision science. As a business leader, Stammen brings strong critical thinking, vision and strategic planning, and consistent value creation that creates repeat customer success.

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