Many insurance professionals are looking forward to 2027 – that’s the year when, according to a new report published by the Insurance Institute of Canada (IIC), more than one in four workers from the industry will already be retired, with most of these departures expected to take place in the coming five years.
Get ready for a lot of retirement parties, and a lot of vacant seats in the office. The entry-to-exit ratio for the insurance sector now suggests that the industry only has one worker under 30 for every employee over the age of 55.
“That’s a big chunk of knowledge and experience leaving. Some of the key roles [impacted] are going to be management and IT in particular,” said Margaret Parent, director of the professionals’ division for IIC. “Every third person in management and IT is likely to retire in the next five to 10 years.”
Fortunately, a recent surge of hiring has led to millennials now representing the largest cohort in the P/C industry, accounting for 39% of the workforce, according to the IIC report. This generation is also equipped with skills that are increasingly in high demand.
“Millennials bring really great customer service skills and some of those early leadership skills,” explained Parent. “As an age group and based on their experience, their capacity with data and digital is different than longer standing employees in the industry, but some of the analytics and data analysis skills are specialized skills that are going to need new people coming into the industry to build systems as opposed to use systems.”
The competition for new talent is fierce. Insurance companies aren’t just fighting for new blood with each other, but with all industries that are vying for the attention of younger generations. Some roles are already being impacted by this demand.
“The research even from 2012 was saying that there’s not enough commercial underwriters in the industry today to just presume you can source from within,” said Parent. “Commercial underwriters need to be grown organically – we need to recruit without experience and then upskill their experience faster than what might have been appropriate years ago.”
IIC is lending a hand with training, launching a commercial insurance program in January. Meanwhile, a key takeaway for insurance leaders is to look beyond the professionals that the industry has to offer today.
“We’re going to need to look outside of insurance to bring people with the core skills required of an underwriter and then teach them the insurance aspect,” said Parent. That training will need to continue throughout the employee’s career to ensure the ongoing skills development of any insurance organization’s workforce, according to the IIC report.
The sector has nonetheless already taken note of an important value that millennials hold dear about their workplaces, and is adapting accordingly.
“There has been a change in the industry’s effort to create more flexible workplaces. Even as early as 2012, HR was indicating that not having flexible work environments was complicating their recruitment and retention, and now in 2017, that is less a concern for HR in terms of recruitment and retention,” said Parent. “That is nice to see as a change, and certainly in hiring or looking to recruit millennials and those that have the data and digital skills, that workplace flexibility is going to be a real consideration.”