Insurance Industry Talent Trends
Futureboard Consulting
Campaign recruitment, selection and assessment design, dedicated outsourced recruitment team and HR Advisors to SMEs
Why do employees leave the insurance industry?
Introduction
A month ago, we wrote about the increasing challenges the insurance industry faces due to an ageing workforce (Insurance Industry Talent Trends by Futureboard Consulting) and have decided to explore the topic further. Leveraging our extensive candidate network, we sought to gather insights about why some professionals embrace a career within the insurance sector and reasons others decide to exit the industry. We engaged with 60 individuals currently employed in various areas, including claims, underwriting, broking, operations, and actuarial science, to understand their perspectives. Although we aimed to interview an equal number of former employees or ‘leavers’, they were harder to reach as a group, some have left the workforce completely (for parenting/caring responsibilities). Of the 30 ‘leavers’ we spoke to, we investigated the positive aspects of their time in insurance, motivations behind their exit from the sector and asked whether they have left permanently or are considering a return.
We are pleased to share the findings from our qualitative research.
Insights gathered from 90 professionals in the insurance industry reveal a predominantly positive perspective on their work experiences. The individuals highlighted several rewarding elements, such as the collaborative working culture, job stability, stimulating tasks, focus on employee welfare/work-life balance, and a competitive salary/benefits package relative to other areas of financial services.
Many respondents noted that upon entering the field at the beginning of their careers, they were aware of the perception of the industry as being 'dull’. However, the following points illustrate the numerous advantages and enjoyable aspects that contribute to their continued engagement in this sector. While the ‘leavers’ echoed many of the positive attributes of working in the industry, they highlighted the lack of career progression, siloed nature of the specialisms within insurance and slow pace of change in a sector that is ironically facing lots of external change.
A summary of the positives and challenges are shared below.
Positives (in order of frequently stated)
Employee welfare/manageable work-life balance
The value of employee welfare was the most resounding positive response given by respondents. The positive work-life balance that can be achieved was of upmost importance to current and past insurance employees, especially when compared to the level of compensation received.
Security of the industry
Even though many individuals referenced the challenges faced by the industry during the pandemic, they still described the sector as a secure place to grow a career. Climate change, unpredictable weather patterns, geopolitical challenges, economic downturn and increased cyber threats were all reasons cited by the respondents as to the opportunity and growth in the sector.
Organisational culture
Many individuals spoke of the healthy, collaborative work culture that exists in the firms they work in. This feedback came from a variety of disciplines (underwriting, claims, operations, actuarial) and company sizes. The same people highlighted the social aspect of building relationships both internally and externally with clients and/brokers as a favourable component of working in insurance.
Compensation and benefits
Several people we spoke to believe their compensation and benefits to be better than many other sectors outside of financial services, and others talked about compensation being competitive relative to the work/life balance offered especially compared to other companies within financial services.
Varied and stimulating work
Some of the individuals we spoke to reference the intellectual challenges in their work. One catastrophe modelling specialist said, “my work plays a crucial role in assessing and managing risk, particularly for our property and casualty clients, the work is becoming increasingly varied and challenging with the onset of new tools and changing macro factors.” The more stimulating the work, the more engaged and satisfied the respondents were.
Others made the point that they valued being part of a company that had a global impact on the industry. They recognise the growing importance of insurance in developed countries and emerging economies. Many commented on the opportunities and threats faced by the sector in the face of a global pandemic, such as COVID-19 and the evolving climate trends.
Learning and development opportunities
Many candidates referred to the excellent graduate programme that they had started out on, which gave them the opportunity to explore various business areas and provided a wealth of learning opportunities. Others talked about the investment their employers make in ongoing training, and a few mentioned the support towards professional qualifications.
The more junior talent we spoke to appreciate the opportunities to learn from exceptionally accomplished colleagues with deep subject matter expertise and/or extensive professional networks.
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Why do people leave insurance?
Siloed career paths
Some professionals found themselves confined to positions that did not align with their aspirations and little opportunity to move away from the siloed function they were in, leading them to seek opportunities in other industries. A number of candidates were dissatisfied with the ability to advance their careers in a certain direction or within a specific timeframe. One candidate stated that they had started their career in actuarial science but did not feel it was a long term fit for them, but their employer was unable to see their fit in another function.
Another interviewee articulated their frustration with the insular characteristics of the industry, whether related to specific business classes or geographical limitations. The perception was a lack of cross-functional collaboration within that organisation. The restrictive nature of their roles motivated them to explore more dynamic business environments, which they ultimately discovered beyond the realm of insurance.
Lack of impact/Unfulfilling work
Some candidates felt frustrated at the perceived lack of impact of their work either on the company they were working for or the client’s they ultimately served. Individuals that had worked in claims described their work as monotonous and unfulfilling. They felt their skills were not fully utilised and there was a lack of cross functional opportunities.
Slow to adapt/lack of progression
Several individuals talked about the lack of innovation in the company they worked for and sector. A theme from the ‘leavers’ group was the lack of career advancement, which was partly attributed to the slow uptake of new technologies and progressive ways of working. There is enough research demonstrating the importance of providing Millennials and Gen Z’ers with career growth opportunities. As David Enoch of RSA states: “employees who feel they are growing are less likely to seek opportunities elsewhere”. This speaks to the importance of consistently incorporating learning and development practices in order to maintain good employee engagement.
Salaries not competitive
While most respondents were pleased with compensation overall, several candidates mentioned the lack of competitive salary and benefits as a reason for exiting the industry. After the hiring freezes of the pandemic and inflation, many young employees looked for more competitive compensation and flexible working schedules. Although this trend has now softened this trend has softened, some of the individuals we spoke to had already been lured away to new roles with higher pay. The sectors with more attractive compensation included energy, consulting and investment management.
A Strategic Challenge
While the aforementioned positives provide a sense of reassurance, the experiences of those who have left the industry raise significant concerns. We know from our research and other industry reports in the sector* that insurance CEOs are increasingly worried about their capacity to replace retiring personnel with suitably skilled individuals. They perceive a growing disparity in expectations between different generations, and there is apprehension that, even if sufficient candidates are identified, the transfer of knowledge among employees may pose difficulties.
A Positive Note
Encouragingly, 70% of the individuals we interviewed who have left the industry indicated that they would consider returning if an appropriate opportunity arose. Such an opportunity would need to facilitate learning and growth, and ideally in a business that is growing and adapting to the external environment.
Conclusion
The insurance sector offers numerous advantages for its workforce. However, the industry must collectively address the downsides if they wish to address the skills gap resulting from a wave of retirements. Fortunately, there are signs of great progress, with the emergence of new people initiatives, disruptive Insurtech technology, which is enhancing process automation and potentially reducing monotonous tasks. Additionally, innovative companies are making strides in investing in developing new products, moving into emerging markets and developing progressive strategies to manage a multi-generational workforce through initiatives like skills planning.
Addressing these large-scale challenges is not a straightforward task. The onus is on individual companies, the industry, regulators, and supporting organisations to collaborate in fostering a resilient sector capable of navigating the evolving challenges presented by society.
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