The insurance industry is currently in the most competitive labor market most professionals have ever experienced. Seasoned employees are retiring, “the Great Reshuffle” persists, and new roles and opportunities are emerging to meet shifting needs and requirements. Results from the “Q1 2022 U.S. Insurance Labor Market Study,” conducted by The Jacobson Group and Aon plc, further depict a recruiting climate that has reached record difficulty, with no signs of letting up in 2022.
This semi-annual study has collected revenue and hiring projections from carriers across all sectors of the industry since 2009. The most recent survey took place in January 2022 and found 72% of insurers are planning to hire this year—a record high. Within the property and casualty space, this percentage is even greater, hitting 79%. This is a notable increase of 28 percentage points from July 2021’s survey, and a 21-point increase from pre-pandemic January 2020. The primary reasons respondents plan to add employees are to support anticipated increases in business volume and accommodate areas that are currently understaffed.
For property and casualty insurers, the demand for claims talent is at its highest in the study’s 13-year history. Of the property and casualty insurers planning to hire within claims, 76% are most likely to hire experienced employees and 24% seek entry-level staff. None of the respondents shared that they were likely to add management- or executive-level claims roles.
Although the vast majority of insurers plan to hire this year, there is not enough talent available to meet the demand. January 2022 saw the highest number of open finance and insurance positions on recent record, according to data from the Bureau of Labor Statistics. At the same time, insurance unemployment is low, remaining well below 2% throughout the first quarter of 2022. Retirements are accelerating as the industry ages, further contributing to the shrinking talent pool. Within the overall U.S. economy, roughly two million more individuals retired during the pandemic than experts predicted.
Consequently, recruiting has become more challenging in all functional areas compared to a year ago. Within property and casualty, claims recruiting has reached its highest level of difficulty on record: 6.6 on a 10-point scale. This is nearly a full point higher than the previous record of 5.8 in July 2021. Yet, despite foreseen recruiting challenges, 82% of property and casualty insurers are planning to grow revenue this year, driven by an increase in market share.
To remain competitive in today’s market, claims leaders must evaluate and refresh how they approach talent acquisition and management. This includes effectively growing and developing internal talent, attracting external talent to gain fresh skills and perspectives, and balancing the two in a way that works best for their team’s unique needs.
Focus on Building Loyalty
Often, organizations prioritize hiring and onboarding plans yet fail to create formal long-term retention strategies. Gallup found that replacing employees can cost organizations one-half to two-times the exiting professional’s salary. Especially in today’s competitive labor market, there is a substantial benefit to growing and retaining your current claims talent.
Commit to career development at all professional levels. In contrast to professionals of previous generations who were out in the field and interacting with customers in person, today’s early-career claims professionals are often working in call centers and navigating highly charged conversations over the phone. Entry-level positions can be taxing, and organizations risk losing high-potential individuals if they neglect to adequately present advancement opportunities.
Work with these young professionals to help define their longer-term career paths, identify their transferable skills and areas for development, and create clear plans to help them achieve their goals. Share how entry-level roles provide a steppingstone to career opportunities throughout the industry, as well as how your organization will provide ongoing support throughout the individual’s tenure.
Continue these conversations with employees as they move up within the organization. If professionals are interested in exploring certain areas of the business, consider how you can provide opportunities for exposure and even reskill them to be most successful on their chosen paths. Additionally, incorporate interpersonal and management skills into their development plans, honing the behaviors necessary to move into more senior-level areas of management or higher-level individual contributor roles.
Build retention strategies for high performers. Along with focusing on development and long-term career growth, understand what motivates your team members and what it will take to retain them. Facilitate “stay interviews” to keep a pulse on their career aspirations and professional and personal needs. These conversations can be informal and should take place quarterly to ensure you remain closely aligned with employees’ expectations and are actively contributing to their career satisfaction. A few questions to ask within these conversations include: What keeps you here? What would make you leave? Do you feel challenged and valued?
Once you have this information, act on it and try to meet their needs to the best of your ability. This may be in the form of added responsibilities, increased flexibility, or even salary bumps. How you handle these conversations will help build trust between you and your team, fostering ongoing transparency and long-term loyalty.
Be Creative in Recruiting
In addition to growing talent from within, external recruiting also has its place within a comprehensive talent plan. As the labor market tightens, hiring managers must focus on attracting young professionals while giving experienced employees a significant reason to leave their current roles.
Identify candidates’ motivators. Lateral moves are nearly non-existent in today’s marketplace since active job seekers are receiving multiple offers. Salary demands are increasing across the industry, so organizations must be prepared to present their highest and best offers. However, while salary remains important, other aspects can contribute to a desirable offer. Talk with candidates throughout the interview process to understand why they are considering making a move and what you can provide that their current employers cannot. This could be the opportunity to work from home full-time, a title change, or clear paths for advancement, among many other non-monetary factors.
Appeal to young talent. As evidenced in the “Q1 2022 Insurance Labor Market Study,” experienced individuals are in the highest demand across the industry. However, the industry is aging, and the mid-level talent gap is widening. The median age of claims professionals has risen from 42.3 in 2015 to 44.9 in 2021. Up until the early 2000s, many organizations brought in classes of claims adjusters comprised of new college graduates. Twenty years later, the impact of discontinuing these programs is being felt. As the industry ages, bringing in young talent and developing them within an organization is vital for eventually closing this mid-level talent gap.
Claims is a foundational element of insurance and can lead to roles within other areas of the industry or more linear paths into senior-level claims positions. However, many new and soon-to-be-graduates are not familiar with the field or how it meets their desired career criteria. Connect with high school and college programs and familiarize soon-to-be graduates with the wealth of opportunities in claims. Highlight how claims positions provide the opportunity to make a difference, while also offering a secure career that enables them to work in a technology-focused and evolving field.
Expand your talent pool. Consider how you can bring in talent from other areas of claims or the larger insurance industry to fill open positions and be creative in exploring nontraditional skills and backgrounds. For instance, while it may be difficult to recruit current commercial lines claims professionals to a similar role, high-performing individuals within personal lines have the foundational knowledge to move into commercial claims and quickly get up to speed. This is typically viewed as a step up and often includes a higher salary and greater responsibility—even though it may not seem completely linear. Similarly, when looking at more specialized areas of claims such as cyber liability, medical malpractice, or general professional liability, there may be individuals within those industries who have unique passions and knowledge that can add substantial value within the claims business.
Further expand your candidate base by removing geographic boundaries when possible. Nearly half of property and casualty carriers plan to continue offering fully remote work options long term. This flexibility enables claims teams to hire talent from any location. Not only does this create a much larger general talent pool, but also it provides claims teams with access to individuals who can fill more specialized roles.
The talent marketplace is more competitive than ever, and claims leaders must build strategic long-term career plans to foster growth and loyalty. While each organization and claims department is different, an intentional and focused strategy for building internal talent and bringing in external expertise will enable claims leaders to create future-proof teams and come out ahead in the war for talent.