How insurance can attract talent with a digital-first approach

The insurance industry, and the Life & Annuities sector in particular, faces a worrying dilemma; the current workforce is aging, and the ability to attract new and younger talent is limited due to current perceptions that the industry is outdated.  When analyzing the workforce numbers, the reality of this issue is alarming. 

Over the past decade, insurance professionals aged 55 and older have risen 74%, according to data from the U.S. Bureau of Labor Statistics. To add to this challenge, over the next 15 years, half of that workforce will retire, leaving 400,000 open positions unfulfilled. With the insurance industry already facing the challenge of retaining its current employees, these numbers further suggest that the sector could be operating with a 12-15% turnover rate.

This enormous talent gap is going to create additional challenges as well as potential risks for the sector. It's now time to reevaluate retention and attraction tactics, which will require the industry to take a fresh look at how it operates. To overcome the stigma of its stodgy, outdated, and traditional reputation, firms must revisit their processes, shift to a digital-first approach, and modernize legacy solutions. It has never been more critical for the insurance sector to move into the modern age.   

The risks of the talent gap

Ask a Millennial or Generation Z to think of insurance, and you're sure to hear words such as traditional, stale, antiquated, and slow to innovate. Younger workers are digital natives, who are accustomed to already having modernized processes and tech-forward systems in place. The problem is that the market is just not there yet. Other sectors -- like banking, finance, and tech -- may provide a more attractive opportunity for younger demographics as the perception is that these sectors are leaps and bounds ahead in their digital transformations.

Not attracting new talent creates a pressing danger, with organizations missing out on new skill sets, creativity, enhanced productivity, and fostering a dynamic company culture. The industry also faces the dangers of losing large amounts of institutional knowledge and experience as employees exiting the sector do not have team members to pass on the baton of insights and information to. 

Without new employees joining the industry, not only does this limit the sharing of innovative and fresh perspectives, but it further pushes the sector behind. This is especially important when you consider that more and more buying power today is sitting in the hands of Millennials and Gen Z. These generations also present a huge opportunity for the insurance sector – if only the industry could work on its ability to reach and engage them!

Concerns and considerations of young talent 

Understanding generational differences and motivations, as well as employee expectations for career growth and benefits, are crucial when implementing beneficial changes in the workplace. Younger generations place a critical importance on work-life balance, with 32% of Gen Z and 28% of Millennials ranking work-life balance as the most important aspect of a job. The pandemic also sparked a new set of expectations around office jobs, with herds of younger generations preferring hybrid or fully remote roles – something that inherently depends on digital technology and online processes. Top considerations also include workplace security and financial stability, which are driven by today's harsh economic backdrop. Up and coming talent pools are now carefully weighing and exploring their options in the search for opportunities that reflect their expectations while meeting their need for career progression and consistency. 

By viewing these new workplace expectations and trends as a guide, organizations can make better informed administrative and operational shifts. 

Technology is the competitive driver to attracting talent

When it comes to recruiting new talent into the insurance industry – and specifically the L&A sector -- a digital-first approach is no longer a nice-to-have, but a must-have. Tech-savvy workers will not accept the traditional outdated, disjointed, or paper-based systems and protocols of the past, but instead insist on user-friendly technology that streamlines workflows and enhances connectivity. For example, initial applications and underwriting are largely manual practices in life insurance, involving mountains of paper forms and lengthy processes – the antithesis of what digital natives expect. Not only is this a barrier for capturing the interest of the younger workforce, but it creates a bottleneck for efficiency, limits speed and transparency, and ultimately impacts the customer experience and business growth opportunities. Whenever possible, the insurance market should be looking to digitize and accelerate workflows, including enhanced and automated underwriting and data analytics, e-delivery and e-signatures to provide convenience and accelerate transactions, and leveraging intelligent fillable forms to reduce errors and improve speed, and more.

To ensure productivity and engagement, it is essential to prioritize seamless integration, real-time data access, and intuitive interfaces. When considering modernizing technology stacks, insurance leaders should reassess what is needed to fully reap the benefits of new solutions and to take steps to properly educate their employees. AI and large language models (LLMs) can offer significant advantages, but successful implementation requires substantial groundwork. From breaking down data silos to cleaning and labeling data and ensuring proper data governance guardrails are put into place, it's not an easy task, but it is worth it. The effectiveness of AI tools depends on the overall quality of the data that fuels them. While regulations for AI are not yet implemented, it is wise for organizations to ensure that governance protocols and reporting measures are in tip-top shape, ahead of when they may be needed. 

Reigniting interest in insurance

Successfully combating and overcoming talent scarcity can seem like a significant overhaul. However, the companies that are setting themselves up for success are the ones that plan to increase industry awareness, respond to employee concerns regarding workplace options, and take the necessary steps to appeal to and attract digital natives. Those that invest in transforming their systems are not only addressing changing workforce perspectives, but they are also future-proofing their processes to create efficiencies that customers, and their own bottom line, will benefit from.