How Canada’s insurers can win the race for talent and skills

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  • Blog
  • 6 minute read
  • March 18, 2024

Three ways to engage the workforce in navigating disruption

Canadian insurers are in an era of continuous change and disruption. Social issues, technological disruption, demographic shifts, regulatory pressures and climate change are just some of the forces that are impacting the stability insurers have long relied on and creating a growing imperative to reinvent their businesses.

While insurers have been taking steps towards reinvention for some time, achieving the right outcomes requires them to adopt and combine a broader range of transformation initiatives, one of which is to build a workforce equipped with the skills of the future and ready to adapt to change. So how can they do this, especially when it remains challenging to find talent with critical skills?

The changing landscape for Canadian insurers

Before outlining specific solutions, it’s important to explore the trends creating talent and workforce pressures in the insurance industry. Below are just some of the key drivers of change for Canadian insurers:

Like Canada as a whole, Canadian insurers are dealing with an aging of their workforce. But as they look to build a workforce with the skills of the future, they’ve struggled to attract younger workers in key demographic segments, like Generation Z, that have different needs and expectations from their employers. We can see evidence of the talent gap in our 27th Annual Global CEO Survey, in which 47% of insurance industry respondents said a lack of skills in their workforce is hindering their ability reinvent their businesses.

For insurers, the talent gap is particularly wide in specialized areas, like underwriting and actuarial functions. Estimates from the Government of Canada’s occupational outlook for actuaries, mathematicians and statisticians suggest job openings will significantly exceed the number of job seekers during the 2022-31 period.

Another key factor requiring insurers to reassess their workforce needs is the changing face of Canada as the country welcomes record numbers of immigrants. As Canada becomes increasingly diverse, insurers will need to attract and retain a workforce that reflects an increasingly diverse customer base.

Beyond efforts to adopt new technologies like generative artificial intelligence, Canadian insurers are on an ongoing cloud and platform modernization journey. People are critical to the success of these large investments as they represent the last mile of adopting new solutions to create tangible business value. This requires people with the skills necessary to execute change and drive outcomes through technology.

Insurers are facing increased operational and market disruption on several fronts, all of which involve significant implications for their workforce, skills and talent requirements:

  • the shift to hybrid work environments, which make it more challenging to mentor and train new workers;

  • the rising prevalence and complexity of cybersecurity risks, which increase the pressure on insurers to further invest in capabilities to ensure operational resilience; and

  • the growth of digital channels and wider distribution points, which are disintermediating markets and require insurers to offer the seamless, technology-enabled experiences customers have come to expect.  

Building a reinvention-ready insurance workforce

Insurers will need to think about what these trends mean for their specific needs around talent, their workforce and skills. As they think through the implications for their businesses, we see three key opportunities for Canadian insurance companies.

1 Reassess workforce strategies

According to our recent Hopes and Fears Survey of workers around the world, 44% of insurance industry employees said they were at least moderately likely to change employers within the next 12 months, highlighting the need for insurers to take a step back to reassess their workforce strategies. This could include looking at how important functions like distribution, product development, actuarial services, underwriting and claims handling are changing and redefining roles, teams, structures and performance metrics accordingly.

A restless workforce also suggests insurers need to do more to attract, retain and develop people with the skills and capabilities they require. A key opportunity is to rethink career paths to create opportunities for employees to acquire and apply new skills.

Consider how employees in important functions, such as those in finance and other knowledge-based roles, are increasingly being called on to bring forward-looking insights to the business units they serve. Insurers can support those employees by assigning them to roles in the business units temporarily so they can further develop their acumen. Canada’s insurers can also build on their existing advantages when it comes to offering more engaging experiences and career paths to workers with the right skills and mindsets: as large organizations with global operations, they can give people new opportunities, such as secondments abroad, that equip them to better support the business and its strategy.

2 Take a skills-based approach

As insurers look to transform into cloud- and platform-enabled organizations, both leaders and their employees know they need a different mix of capabilities, including digital skills, to successfully execute change. In fact, a large majority (84%) of insurance industry employees who participated in our Hopes and Fears Survey said digital skills would be important to their careers in the coming years. But what if some of those skills were already available in a company’s workforce and just waiting to be tapped into? 

This is where a skills-based approach can help. It involves taking a step back to assess the skills a company already has and those it needs to build, borrow or acquire. Doing so can help insurers better understand gaps their existing employees can fill, which we see as an important opportunity given that more than half (59%) of insurance industry participants in our Hopes and Fears Survey told us they have skills that aren’t clear from their qualifications, job history or current role. 

3 Embrace transformative leadership

It’s also important to consider the role of leaders, including middle managers, in helping employees work through and contribute to change and reinvention, especially given the anxieties many workers feel about technologies like generative AI. Developing transformative leaders who can build trust with employees as insurers adopt generative AI will be key. One way to do this is to support leaders in encouraging their people to experiment with generative AI tools and making it safe for them to fail when they do.

Leaders can also build trust with their people by learning more about generative AI themselves, addressing employees’ concerns about it and engaging in open dialogue on how they can use it in their roles. Workers have many questions about it, and leaders can help them understand what it means for them.

Leaders also play an important role in creating more effective hybrid working environments. As managers look to train, mentor and develop their people in a hybrid world, it’s important to be intentional about their interactions with employees. This could mean paying attention to employees they’ve spent less time with and observing them in their roles to identify new growth opportunities.

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