The typical P&C insurance company claims professional is dedicated, highly skilled, and, according to data, more than 45 years old. Senior claims professionals have accumulated a wealth of experience and knowledge, but the industry needs to take a hard look at where the next generation of talent is coming from.
Of course, the talent problem is not unique to claims. Insurance is just one of many industries facing a shortage of skilled professionals. By some estimates, 50 percent of today’s insurance agents will retire in the next 10 years, leaving the industry without its highest-producing salespeople, and almost 70 percent of adjusters are past the age of 45. There are already shortages among mid-level claims professionals with the necessary skills in advanced analytics. To make things worse, insurance stands among the three least-attractive industries for college graduates to enter, ranking 97th out of 100, according to The Wall Street Journal.
This model does not really fit the way younger workers look at the world and the workplace. Those dubbed “Millennials,” or part of Generation Y, for example, tend to expect immediate feedback at work, a flat, organizational structure, and career development based on recognizable contributions to the success of the business, not necessarily based on time served. Additionally, younger workers operate in a digital environment where information is shared broadly and instantaneously, not passed down through a defined hierarchy. This new crop of workers is collaborative and team-oriented, and may take access to technology for granted. Millennials’ use of technology creates a seamless environment that mingles business information, communication with friends, and personal activities.
When these individuals enter the workforce—especially in non-glamorous industries such as insurance—they often find that their personal use and knowledge of technology goes beyond what the organization currently provides or accepts. The corporate structure, understandably concerned about issues of privacy, security, and compliance, may discourage or forbid the use of some types of social media or mobile communications. This may not sit well with younger workers who are contemplating a career in insurance.
Another problem for the industry is what we call the “pipeline” approach to recruitment and retention. Following this philosophy, insurers recruit large numbers of employees to retain just a few who ultimately stick with the business. They do this rather than put the effort into finding people with the kind of interest and aptitudes who would make proficient claims professionals in the first place.
Look ahead, not back. Too many talent management programs look back to measure performance, rather than look forward to determine what factors are really indicative of future success in the claims field. What we call “human capital analytics” can help insurers answer important questions: What programs really drive better workforce performance? Which top performers in the organization are at risk of leaving and how might they be enticed to stay? Answers to these questions and others like them can have measurable impacts on performance: cutting HR expenses, reducing workforce costs, increasing employee productivity, and improving service to customers.