There is a growing concern among insurance companies of an impending shortage of professionals in the coming years as seasoned workers retire, and less than four percent of millennials would consider a career in the insurance sector.
The talent gap is further strained by the digital revolution of insurance distribution due to the emergence of digital channels such as mobile apps and online aggregators.
Finding talent to fill the required skills gap is a growing challenge. By 2025, It is estimated that nearly three million people are expected to leave the workforce with baby boomers constituting the majority. With them will go significant knowledge and unparalleled experience not deftly replaceable. By outsourcing, you will have an invaluable strategic approach in minimizing talent gaps in the long-term.
According to the U.S. Census Bureau, the 65-and-older population will double in the next 30 years, reaching 88 million by 2050. The average age of an agent or a broker, according to industry statistics, is pushing 60, and a white paper published by McKinsey puts the median age of insurance agents at 59 years old.
As veterans of the insurance sector retire, their departure creates a void that needs to be filled by young professionals who are making a start in the industry, and the competition to attract that talent is currently at an all-time high. According to the management consulting firm MarshBerry, the numbers would mean recruiting around “five new producers for every seasoned producer who plans on retiring in the next decade.”
Not only is attracting young talent a challenge but insurance companies must also evolve to adapt with the ever-changing workforce expectations (“.. this new (millennial) workforce will likely demand an exceptional physical and digital workspace, as well as an appealing experience that puts employees at the center, helps them feel engaged and keeps them in the fold.” – Deloitte 2019 Insurance Industry Outlook), establish effective training programs to onboard new talent and cope with costs in employee churn and hiring.
To put it into perspective, “Expect to have to pay more, offer more and train more,” (Insurance Journal).
It is expected that the insurance landscape will change over the next five to ten years, driven by two primary trends: evolving customer expectations and accelerating technology evolution.
By 2030, millennials and their successors are estimated to make up nearly half of the adult population in the United States. As customers, they expect interactions to be seamless, omnichannel, real-time and are integrated to platforms that are presently being used and even in future applications or platforms.
Another trend is the generation and use of data as the Internet of Things (IoT) continues to develop. The interconnectivity of devices expands data sharing and gathering methodologies, enabling insurers to learn more about their customers’ behaviors and risk profiles. This data can be harnessed by carriers and agencies to be used in new ways; loss prevention, custom products & services, and risk reduction. Underwriters or actuaries too can work on this data with the help of data science and advanced analytics to develop and manage underwriting solutions.
Insurance businesses would then need to prioritize digital literacy through investments in training, re-skilling, and up-skilling. Technology must be harnessed to improving business processes to be able to respond quickly to the demands of today’s customers.
Insurance companies, like in all other industries, are facing significant challenges in finding the right talent and skills to fill these recognized talent gaps.
With talent gaps in your insurance business, your time-sensitive strategic business plans will be delayed, your business growth will be stunted, and the required business agility to respond to customer needs are not being met. All of which, would mean that business development opportunities and potential revenues are lost during the process of filling the gap.
By outsourcing, you:
You do not need to keep specialized talents in-house. Instead of investing significant amounts of resources in staff development and undergoing the recruitment cycle, you gain access to the expertise you need. Another advantage in outsourcing specialized skills is that outsourced talent is more likely to have worked with multiple businesses within their field of expertise, giving them an array of real-life experiences compared to a similar staff that had stayed with one company for the same duration.
With your specialized talent taking care of mission-critical business processes & tasks, you can now focus on your core competencies and give yourself more time & space to work on the business.
Scalability is defined as the ability to adapt functionality, systems, capacity, and availability in response to anticipated or actual changes. It is usually associated with opportunities in growth which means upgrades or expansion is necessary.
Often, in-house teams require wide enough of a timeframe to respond to a demand for scalability. This is due to limitations of resources, staffing, subject-specific experts, and space; not to mention internal bureaucracy, migration of systems, workflow or process updates, and staff training to utilize the tools.
Outsourcing provides the needed flexibility to respond to a business’ scalability requirement without the need for a big capital expense, mass internal system roll outs, staffing, or physical installations for facilities and equipment.
Outsourcing is a smart and cost-effective way in solving your insurance business’ talent gap. It is a ready solution that gives insurance businesses rapid access to the talent or skills at a cost much lower in comparison to bringing in or hiring full time employees. Also, outsourcing companies takes care of recruitment, training, health care benefits, performance management, coaching and everything related to employees.
Insurance businesses need to outsource at the right time and with the right outsourcing partner to realize the competitive edge. By outsourcing, insurance businesses can have the competitive edge of:
Consider outsourcing as part of your business strategy to attract skilled talent on a global scale. Refocus and gain momentum to gain a bigger market share, growing the business, tap to new revenue generation opportunities & establishing sustainability.