It’s not your imagination, COVID-19 really did throw a wrench into the insurance industry’s ability to hire and retain talent, says a new Deloitte report on the state of Canada’s P&C industry.
It found industry demand for people with the right skillsets and expertise is a growing challenge for insurers and that “the evolving market dynamics of COVID-19 has only caused this challenge to worsen, and it is expected to continue in the years to come.”
Capacity issues notwithstanding, Deloitte found the insurance industry expects the economic recovery will keep boosting business volumes “and there will be a need to increase headcount across most functional areas.”
The pandemic made talent shortages worse, because insurers opted to cut costs by reducing staff, the report found.
“In a global survey of [more than] 400 senior insurance executives across multiple functions, 43% of talent respondents indicated that it is becoming more difficult to find skilled candidates, naming IT as the area of greatest difficulty,” it said.
Driving that difficulty is the fact that insurers are competing with both their industry peers and global tech giants for the same IT candidates.
Plus, the speed at which tech threats are emerging means insurers are tasked with finding talent that’s able to deal with a fast-changing risk landscape.
“To sufficiently address the demand for cyber, insurers need talent who understand the nature of cyber risks, the range of mitigation services, etc.,” the report said. “However, given that it is a recent phenomenon (as demonstrated by the spike in claims), the talent pool is limited.”
Recruitment issues also were top of mind for respondents to Canadian Underwriter’s 2022 National Broker Survey. They said both the hard market and COVID-19 significantly increased workloads. Both factors can make retention difficult.
CU‘s survey found finding qualified talent was a top concern for 69% of Canadian brokers. That’s 7% higher than what they reported at the onset of the pandemic. The February survey asked more than 250 brokers nationwide about challenges to the broker distribution channel.
Meanwhile, Deloitte said insurers are making investments to close talent gaps, and improve recruitment and retention, including:
- Supplementary training. Insurers said they’d expand the traditional talent pool by exploring candidates from other geographies and professional backgrounds to find those with adaptable skills. Deloitte said insurers mentioned this option specifically for underwriters and added they’re seeking candidates with industry-specific experience and plan to train new hires on underwriting skills.
- Upskilling. This long-term process requires investments in development, including training modules, tools and resources to ensure standardized industry expertise is created across an organization.
- Automation. Insurers told Deloitte they’ll automate certain capabilities, specifically in underwriting and claims processing. And they’ll use data and analytics to enhance the accuracy and insights around sales and distribution, pricing and loss control.
All of this, though, will come at a cost.
“Insurers will be faced with the pressure to maintain profitability and operational efficiencies while ensuring that they can afford these extensive and necessary investments into talent,” Deloitte observed.
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