The Staffing Gap in Insurance Underwriting and How to Fill it

The insurance industry has been fighting a talent war for years. It is trying to reinvent its image in the eyes of millennial talent and is devising new ways to attract, engage, and retain the modern workforce.

 

Within the sector, this challenge is most keenly felt in the insurance underwriting space. Underwriting processes are undergoing digital transformation, and insurance carriers must adapt to meet this challenge. In addition to replacing retired talent (since the insurance sector has a higher than average median age in financial services), HR managers and senior executives need to upskill underwriters with digital and soft skills.

 

Underwriting Digital transformation and Evolving SkillsDemand

Traditionally, insurance carriers have allotted the repetitive and clerical aspects of underwriting services to regular staff. But now these activities are becoming automated.Thus,staff are encouraged to take on more technical work. Staff members need to interpret a lot of data and quantitative analytics. So, they need technical skills that enable them to meet these requirements. An inability to do so may prevent the optimization of new technologies for which insurance carriers are spending a huge sum.

 

Moreover, employees undertaking insurance underwriting also need to improve their social skills, adaptability, empathy, and customer engagement. These skills will help them respond to changing market risks and leverage technology to meet the demands of the new-age digital customers.

 

With advanced analytics and data science becoming a key component of insurance underwriting services, the elimination of manual tasks has become a reality. This may mean that underwriters will develop themselves to become programmers or data scientists. Insurance carriersneed to reimagine the role of underwriters to reflect this change. This leads to the need for new staffing strategies for insurance carriers to meet the demands and expectations of their clients.

 

Challenges Facing the Underwriting Industry      

1.   Back to the office
As business as usual becomes the norm and employees return to offices, insurance companies run the risk of making the same mistakes as before. The pandemic has shown that employees can work from anywhere and be productive. If remote work and hybrid work does not become a key component of underwriting digital transformation, the industry will lose its goodwill and attractiveness in the eyes of workers.

 

2. Upskilling for the future
The underwriting industry is facing a skills gap as it balances core financial capabilities with modern skills such as data science, consumer behavior, and user experience. Since traditional underwriting services such as claims processing, detecting fraud, and renewing policies can be automated, the industry now needs workers with contemporary skills. In most cases, insurance carriers will need to upskill their existing employee base to fill this gap.

 

3. Fair pay for staff
The insurance industry has a reputation of not being able to meet the compensation and benefits demands of modern employees. While the industry offers stability, the modern job seeker demands upskilling, flexibility, value-added work, and constant feedback. The culture at insurance companies has traditionally prioritized risk management, fixed hierarchies, and job specialization. Insurance underwriting providers need to evolve and offer employees what matters most to them.

Strategies to Bridge the Underwriting Talent Gap

The pandemic has forced those within the insurance underwriting industry to reimagine what skills are needed to succeed. They also have the chance to redefine the nature of work they carry out as they recalibrate themselves to provide what workers value most. Here are some key strategies to pursue.

 

1.   Use data as a strength
As underwriting services begin to incorporate data in strategic decision-making and risk mitigation, working with third-party partners for data management is crucial. High-quality data can increase the effectiveness and profitability of insurance carriers.

 

2. Remove low-value work
Insurance carriers must ensure that they prioritize high-value work that strengthens client relationships. If this means outsourcing low-value work, then so be it. Successful work allocation will give employees an opportunity to work on more crucial tasks with more efficiency.

 

3. Reimagine the talent strategy
In a bid to drive successful underwriting digital transformation, carriers must transform their business strategy with regard to talent acquisition. Talent strategy must be prominent and well-funded to be able to meet the target business needs.

 

4. Rebuild the work culture
Underwriting services must embrace innovation and change. These demand a change in company culture so that agility, freedom to experiment, and responsiveness to change become second nature. For insurance carriers to adopt such a mindset is easier said than done.

 

Conclusion

For insurance underwriting providers to succeed in the next few decades, they must keep their business and talent strategies on the same pedestal. Companies must evolve with time to acquire and retain the best talent by giving them what they want. The insurance industry is built on trust, and the first step to achieving this is to empower people with the skills and tools to realize their potential.