A recent Xchanging survey reported that while 86% of insurance industry respondents ranked technology as their first or second priority, only 11% deemed attracting qualified talent similarly important—and about a third said it was a lower priority.
It’s a confusing contradiction in an industry where investing in technological advancement goes hand in hand with recruiting young talent—a vital mission as baby boomers begin to age out of the business.
The survey results, released earlier this month, are based on responses from 75 insurance industry practitioners representing the property-casualty, life-health and reinsurance sectors. Respondents included directors and project managers, executives, IT staff, agents, brokers and analysts.
According to the Department of Labor, the median age of a typical U.S. employee is about 42.
Jenna Richardson, director of North American insurance services at Xchanging, notes the average age of independent agents is much higher.
“Clearly there is a talent gap,” Richardson says. “It may be a chicken-and-the-egg scenario—most tech-savvy millennials will want to work at a company that has made an investment in technology. Companies should view both technology investment and recruitment as congruous and necessary parts of the larger strategy.”
In a time when employment for agents and brokers is booming, “the jobs are out there—the challenge is in determining how best to attract millennial talent,” Richardson says.
Considering the average millennial’s reputation as a digital native, one way to fight that stigma is to invest in the technology they know so well and to tell potential new hires that they’ll be integral to the industry’s survival in the future. That will require “general education on innovation in the industry—everything from mobile apps to connected car technologies,” Richardson says. “The industry is actually much more evolved than most millennials may think.”
Interestingly, despite the low value respondents placed on traditional recruitment, “The 2014 Insurance Technology and Spending Trends Report” found that nearly half of respondents listed “strategic sourcing of talent” as their second-highest priority. Whether that means turning to shared or outsourced services or automation robotics to supplement operational resources, the practice is on the rise.
“Organizations leverage these options to create efficiencies within the operations and to assist in cost reduction and containment,” Richardson explains. “Many insurance companies have turned to third-party service specialists to source skilled resources, allowing them to focus additional resources on core business objectives such as profitable underwriting, capital management and growth.”
Jacquelyn Connelly is IA senior editor.