In today’s hypercompetitive labor market, insurers are finding it increasingly difficult to attract and retain skilled workers. The combined forces of the “great resignation,” as employees re-evaluate their priorities, and the “great retirement,” as skilled older workers leave the workforce, have created a historic labor shortage. As a knowledge-intensive field that relies on highly-skilled workers for complex workflows, insurance is teetering on the edge of a full-blown crisis. If insurers fail to address the skills gap, they run the risk of falling behind competitors in terms of operational excellence, and losing out on revenue growth and market share.
This all leaves insurers wondering, where will the next generation of talented workers come from? How will they be able to recruit or train the skill sets needed? And what role can automation play in this context?
Mind the gap! The talent shortage plaguing insurers
According to Gartner, the shortage of critical talent is the number one trend likely to impact organizations, and 48% of businesses reported significant concerns about turnover in the next few months. This is much more than just a talent gap of “nice to have” skills. Attrition among employees necessary for critical workflows creates a serious threat to business continuity. The talent shortage is troublesome for insurers who rely on skilled workers to manage complex, data-heavy processes like underwriting and claims management. As experienced workers retire and younger generations are drawn to career options perceived as more “exciting”, companies are struggling to find qualified replacements. NAMIC, the National Association of Mutual Insurance Companies, predicts a “retirement cliff” over the next 15 years as 50% of the current insurance workforce in the US will retire. This is expected to leave more than 400,000 open positions unfilled.
Is hiring the answer to insurers’ labor shortage problem?
While recruiting may seem like an obvious solution to the scarcity of talent, it is not sustainable in the long run. There are many reasons why the labor shortage cannot be filled by hiring alone. Firstly, talent is hard to find and win over, especially in a competitive market. Even if the recruiting process is successful, it takes time before workers are fully onboarded and driving value for the company. Recruiting simply can’t backfill empty positions fast enough. On top of all of this, labor costs have hit the highest level in twenty years, with companies offering higher salaries and better benefits to combat the domestic worker shortage. The cost of labor is expected to rise even further due to inflation, putting even more pressure on insurers to improve efficiency and productivity.
Instead of simply trying to hire more workers, insurers need to make significant, strategic changes to improve employee satisfaction, and leverage investments in technology to fill the gaps of the human workforce.
How automation can augment the human workforce
Automation can help address the shortage of skilled workers in the insurance industry by streamlining processes, improving efficiency, and eliminating tedious, manual tasks.
Let’s consider the fact that elderly subject matter experts are being brought out of retirement to review thousands of policies manually. Insurers simply can’t find replacements for them, as Millennial and Gen Z workers seek more exciting, fulfilling work. However, routine policy reviews can easily be automated with the help of natural language understanding (NLU) technology, leaving subject matter experts to focus on more complex and nuanced issues.
Similarly, claims processing and underwriting are traditionally time-consuming processes that rely heavily on human expertise. However, Intelligent Document Processing (IDP) solutions like SemanticPro from Cortical.io can help reduce the workload of claims adjusters and underwriters by “reading” long, complex documents, interpreting data, identifying patterns, and aiding with decision-making. One Fortune 500 company was able to achieve a 30% reduction in manual labor by automating its quoting workflow.
Automation has the potential to make work more enjoyable for younger employees in the insurance industry. By shifting mundane tasks to machines, employees can engage in more meaningful work, which in turn increases their job satisfaction and motivation. In a more dynamic and engaging work environment, where workers have time to develop new skills and focus on high-value work, they are better equipped to tackle new challenges and feel more invested in their roles.
Additionally, automation has a key role to play when it comes to knowledge transfer and management. Experience and expertise are not so easy to hand over when workers retire or leave for a new position. An IDP solution like Cortical.io that is trained on your company’s terminology and processes facilitates the training of new employees.
Insurers must act now to mitigate the talent shortage
The insurance industry is facing a perfect storm of demographic shifts, technological advancements, and changing consumer demands that are putting significant pressure on its workforce. Without taking immediate action to mitigate this shortage, companies risk falling behind and losing their competitive edge.
Automation has the potential to help address the talent shortage by driving efficiency and improving the employee experience. But whether insurers choose to hire and train human staff, deploy automation technology, or a combination of both, these changes require time and resources. Therefore, the time to act is now, and insurers that prioritize talent management will be better positioned to thrive in the years ahead.
