In the second half of 2021, the employment market in the insurance sector was as active as it’s been since the market crash of the late aughts. Insurtech recruiting has continued to be a challenge thus far in 2022, and the industry is still growing despite recent economic slowdowns.
It’s not just tech talent that’s hard to find, either. The Department of Labor forecasts a 24% increase in the number of actuarial jobs by the end of the decade, and similar gains are likely in other areas of the insurance industry. This market growth has contributed to some other trends that are shaping the industry’s progress and direction, such as the three described below.
Increase in Temporary Workers and Workplace Flexibility
According to the most recent Jacobson Group U.S. Insurance Labor Market Study, nearly three-fourths of carriers (72%) plan to increase their staff in the next 12 months, while only 3% expect to reduce their staff size. This has created the most difficult recruiting market in the 13-year history of the study.
One solution for many companies has been to hire temporary staff, particularly for in-demand technology, analytics, or actuarial roles. As a result, demand for temporary insurance talent has also hit a record high. Others are increasing their workplace flexibility to appeal to top talent and retain their current staff. That same Jacobson Group study shows that nearly half (45%) of insurers plan to offer fully-remote positions in the long term, even after offices have reopened, while 89% plan to use some form of hybrid workplace model.
The bottom line is that there are several ways companies can adapt to this competitive hiring market, but most companies will need to make some kind of adjustment.
Continued Rise of Automation and AI
One way companies can cope with talent gaps and staffing shortages is by implementing AI for self-service portals, touchless claims, and other technology that allows them to provide personalized attention with a smaller staff. As the use of machine learning and artificial intelligence becomes more widespread, customers increasingly expect and demand personalized offerings and usage-based insurance solutions. According to Novidea CEO Roi Agababa, 82% of insurance buyers now expect to interact with their provider across multiple channels.
While the insurance industry has historically been slow to adopt cutting-edge technologies, this is one place it’s not advised to take a “wait and see” approach. Firms and providers that take advantage of these new tools will be best positioned to succeed moving forward, while those who fail to implement them will likely find themselves increasingly left behind. At the very least, the time is now to add professionals who have the skill sets to implement and manage AI-based systems if you don’t already have them in your organization.
Increased Focus on Cyber Risk Management
Cyber security threats are nothing new, but as more business takes place in the digital space, the potential cost and damage of these threats has increased. In 2021, the average cost of a data breach rose to $4.24 million, the highest it’s been in nearly two decades of tracking these figures.
This is both a risk and an opportunity for insurtech leaders, who will need to think strategically to minimize the former and seize the latter. Organizations that have expanded their digital offerings over the past two years would be wise to evaluate their data security and how it can be expanded or improved to meet your new needs. Meanwhile, an increasing number of companies are offering data breach protection or insurance at both the individual consumer and B2B level.
Of course, these cyber security systems don’t design or maintain themselves. Insurtech companies aren’t the only ones looking to add more data security talent to their teams, and those professionals are likely to be in high demand for years to come. For some companies, identifying current employees with the potential for upskilling or reskilling in these areas will be a faster and better way to increase your security capabilities.
The Future of Insurtech
The increase in virtualization, along with the potential for personalization that AI algorithms bring to the table, is already changing customer expectations for their insurance provider. Organizations will need talent with a different set of skills than they’ve hired for in the past to meet these shifting demands. How to find and attract that talent is the biggest question companies need to answer if they want to stay competitive in the marketplace of the future.