The insurance industry faces a lurking threat from within. Key person risk refers to the potential negative impact on an organization due to the loss of critical employees: when a key individual leaves a company, they also take with them the wealth of knowledge they have accumulated, including industry expertise, product knowledge and client relationships. As the workforce ages and talent acquisition struggles, the industry must confront the implications of key person risk and implement strategies to mitigate it.
According to the US Bureau of Labor Statistics, the insurance sector is facing a severe talent shortage, with projections suggesting that the industry could lose approximately
Meanwhile, the Bureau ranked the insurance industry second-to-last nationally for recruiting new talent in 2022. Declining employee numbers aside, this clearly represents a significant loss of expertise and knowledge as seasoned professionals exit the workforce taking decades of accrued experience, institutional knowledge, and client relationships with them.
AI tools can more easily capture employee knowledge by creating rich documentation from interview transcripts. Once key roles have been identified, AI can be used to interview those people and then document their knowledge, opening the way for a more efficient and effective mechanism to transfer knowledge from one employee to another. Implementing similar AI based tools will reduce the loss of institutional knowledge, making it easier for successors to pick up where their predecessors left off.
In addition to automated documentation, there are other strategies that can be implemented to utilize AI to mitigate key person risk. These include:
AI-powered knowledge mapping. Instead of just filing documents away, AI can create visual maps showing how everything connects – people, processes, clients, and products. This way, when someone new steps into a key role, they can see how things fit together and quickly get up to speed.
Learning from the experts with machine learning. AI can be trained to understand how key employees make decisions and solve problems. So rather than just storing documents, it can actually learn their thought processes. This helps capture not just the 'what' but the 'why' behind important decisions, which is invaluable for anyone stepping into their shoes.
AI-supported mentorship. AI can help set up mentorship programs where retiring employees pass on their expertise to newer staff. It can track what knowledge has been shared and even recommend areas to focus on, making sure nothing important slips through the cracks.
Smart AI assistants. Imagine having an AI assistant that understands the specific context of a job and can offer advice or remind new hires of the right steps to take – a helpful virtual colleague who is always on hand with the right information at the right time.
Analyzing key relationships. AI can help look beyond just the facts and figures by analyzing interactions between key employees and clients or colleagues. It can pick up on the softer skills—such as how these relationships are managed—so that successors know not only what to do but also how to keep those important relationships strong.
