By Michael Vecchio
The insurance industry has been strongly impacted by COVID-19, but the storyline is not the same across the entire sector. Some areas of the industry are taking advantage of available talent due to other industries - such as financial services - freezing or furloughing staff. Meanwhile, other segments of insurance are themselves furloughing or decreasing staff.
While reinsurers, life and health insurers have been most adversely affected, other areas of the business – such as auto insurers - are benefiting from the lack of claims due to COVID-19, and are even giving back premiums because of it.
Despite the inconsistencies, there is a wave of change taking place across the insurance sector and it will alter the face of the industry for good.
A Tale Of Two Industries: Insurance By The Numbers
- According to ZipRecruiter data, insurance claims adjuster jobs have increased by 212%.
- More than half (51%) of insurers do not plan to make any changes to their annual incentive plans and intend to let any adverse effects on the business carry through to incentive payouts at the end of the year. (Willis Towers Watson)
- Only 12% of insurers are considering mandatory furloughs.
- 42% of insurers went on a hiring freeze or reduced staff in some capacity.
- Auto insurance companies are returning $800 million in premiums during COVID-19. (ABC News)
- The average change in stock price for insurance carriers is down 33%. (McKinsey & Company)
The Wave Of Change: Talent Opportunities In The Insurance Industry
Prior to COVID-19, the insurance sector was already facing a series of big changes, including the fact that a large population of its workforce is nearing retirement age. According to the U.S. Bureau of Labor Statistics, nearly 400,000 employees are expected to retire from the insurance industry workforce over the next few years.
Add in technology, which has been transforming the insurance industry with dynamic new providers, and not only are the insurance products themselves changing but so too are the people working for insurance companies. A mix of human and virtual channels has been created to provide the around-the-clock, on-demand availability consumers expect. Meanwhile, technology is being used to provide predictive claims, automate payouts powered by data and facilitate an overall frictionless claims process.
Pandemic aside, other global risks such as those associated with climate change, were starting to impact insurance coverage, premiums and product lines.
As a result, the people interested in working in insurance as a career have also been changing, and it’s creating a recruiting opportunity for providers, especially during the pandemic.
Some of the big talent themes influencing the insurance industry as well as areas of opportunity for those hiring in this sector are:
- Internal mobility. With an industry that will have some business lines growing and others dropping, the ability to evaluate, shift and retrain talent could be a significant differentiator.
- Digital transformation. New players were already challenging the insurance marketplace before COVID-19. With an influx of new and emerging issues coming as a result of the pandemic, technology workflows must be succinct or insurers will risk losing customers to more digitally-enabled competitors. Having the right talent that can build, transform and maintain insurance systems will be critical to survival and growth. An agile, smart workforce will be a necessity.
- Remote opportunities. While COVID-19 has forced this transition for many industries, it only accelerated a trend that had already existed within the insurance sector. Many insurers have been looking at ways to increase their operational digital footprint and connectivity, and lower their reliance on physical brick and mortar locations. The industry needs to hone its procedures for hiring, training, managing and auditing a much larger remote workforce while attracting a population that will be successful in this business model.
- Connecting with customers. Interacting with customers face-to-face versus remotely requires very different skills. As a result, different employee profiles will evolve, creating a need for increased training. Some turnover will be unavoidable.
- In-house litigation. Not only will there be a backlog of cases due to courts being shut down during the pandemic, but many, including Warren Buffet, are predicting an influx of claims and litigation as a result of COVID-19. From a talent planning perspective, insurance companies will be lawyering up, literally, and looking to hire more in-house counsel, both on a contingent and full-time basis, to handle the volume of COVID-19-related claims and lawsuits.
As the insurance industry carefully assesses business in a post-COVID-19 environment, there will undoubtedly be a change in workforce demographics as well as an upskilling and reskilling of the current insurance workforce to meet changing demands. The sector, as we know it, will likely look very different in the coming weeks, months and years.
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