E&Y: Insurers Need To Step Up And Meet Employee Needs Or Face Exodus

The COVID-19 pandemic changed how the insurance industry attracts and keeps talent -- probably for good.

“You will not retain your talents if you don’t offer them an upgraded employee experience and you need to attract new skills, which are required for transforming the insurance business into a more digital, customer-centric business," said Isabelle Santenac, global insurance leader for Ernst & Young.

The pandemic impact on talent is just one trend explored in the EY 2022 Global Insurance Outlook. It takes into consideration three trends that are particularly important in the coming months.

The trends are:

1. As the industry is committed to be more customer-centric and as customer needs and expectations have significantly changed over the past years, we see ecosystems of financial solutions and the rise of open insurance emerging as a key trend, Santenac said.

2. COVID-19 has changed our ways of working and has opened new horizons for building talent pools. Workforce transformation is absolutely needed, Santenac said.

3. The third big trend is sustainability, according to Santenac. The insurance industry has to go further than a commitment to being carbon zero, and define clear roadmaps, including short-term milestones, to demonstrate its actions. “We see a lot of opportunities for the industry to be part of the solution and innovate with new products that drive greener behaviors,” she said.

The Great Resignation

The second trend identified by Santenac is related to the Great Resignation, which continues to be a challenge for many employers, including those in the insurance industry.

According to Santenac, U.S workers are quitting in record numbers, the highest in the 20 years since the Department of Labor began keeping track. Last year alone, an average of more than 3.98 million workers quit their jobs each month. “This means that 2021 holds the highest average on record,” she said.

The insurance industry has been grappling with employment challenges well before the pandemic, she added. As an industry with an aging workforce, it is faced with the daunting challenge of addressing a retirement talent drain of about half the workforce over the next decade.

Since the average age of a life insurance agent in the U.S. is 59, insurance does not face nearly the same crisis of staying power seen across other industries today, Santenac pointed out.

However, while these insurance professionals aren’t changing jobs now, they are dangerously close to retirement, which gives the industry the same risk of a labor shortage as every other industry, if only delayed by a few years.

Addressing Industry Sustainability

When it comes to long-term industry sustainability, insurers will need to attract young Gen Z workers and retain millennials, Santenac said.

“There is the critical need to re-examine and redefine the industry's value and meaning to generations for whom a sense of “mission” is table stakes,” she said.

In addition, insurance organizations need to be proactive in retaining the talent and expertise they currently have and in retooling to compete aggressively for the talent of the future, she added.

The insurance industry is currently experiencing a period of growth and change stemming largely from investment in InsurTech. As a result, the types of professions that are available in the industry are increasing beyond the traditional positions of producers, claims managers, and actuaries, she added

As with many long-term industry sectors, there is a great need to bolster the workforce with deep technology and product-management expertise, which currently represent the top two positions that insurance companies are looking to fill.

“The scarcity of key skills and the "Great Resignation” mean that insurers must address the traditional view of the industry as slow-moving and dull if they are to become employers of choice,” she said.

People want fair compensation and benefits, Santenac pointed out. They also want flexible working arrangements, and, increasingly, they want to work for employers who are in tune with the major societal impacts of the day, such as diversity, equity, and inclusion (DE&I), and the green economy.

“Developing innovative new products and solutions to protect against climate risks and leading the shift to a greener economy will also help elevate insurers’ reputation among younger workers,” she added.

Retaining and Recruiting Workers

While salary and benefits are still important in retaining and recruiting workers, 60% of American employees say the pandemic caused them to think more carefully about the benefits their employer provides, and about 68% believe that their workplace benefits will play a more critical role in their future job selection, Santenac said.

These are important, along with creating the right environment that includes:

• A sense of social cohesion and purpose
• Collaborative teams
• Clear responsibilities and opportunities to learn and grow
• An organizational sense of purpose that aligns with workers’ personal values
• A suitable physical and digital environment that gives employees the flexibility to achieve work/life balance

Younger workers are looking for more purposeful work, which gives an advantage to insurers that can articulate a clear story about how their products and services benefit society as a whole, Santenac added.

“Helping address the worldwide protection and retirement-savings gaps, promoting diversity, and protecting against climate change are all ways insurers can live their purpose and attract socially minded workers at the same time,” she said.

Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].