9 Ways Risk Management and Insurance Is Addressing the Talent Gap

The talent gap isn't going away anytime soon. Here's what insurance and risk management can do to address it.
By: | October 11, 2019

Risk management and the insurance industry have been around for hundreds of years in some capacity or another. As a thriving industry, insurance offers many avenues for young professionals to explore as they grow in their careers. But as with several other industries in this Digital Age, insurance is facing a talent shortage. 

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RIMS’ Risk Management Talent 2025 report found that only 16% of insurance professionals think there will be enough graduates to fill open positions in risk management by 2025.

“The issue is that we have not been producing enough individuals to move into the risk management space coming out of the various schools,” said Ward Ching, managing director captive & insurance management at Aon.

While the talent shortage is definitely concerning, the industry is already acting to address the problem. From offering internships to recruiting outside of the industry, here’s how risk and insurance professionals are tackling talent risk.   

1) Be a Presence on College Campuses 

When it comes to recruiting new talent, college campuses should be one of the first sites that those in the risk management and insurance industries look towards. College job fairs and recruitment events are full of students looking for their first opportunity.  

Ward Ching, managing director captive & insurance management, Aon

College campuses are a prime target for recruiting millennial and Gen Z workers to fill the gap left as baby boomers start to retire en masse, especially since a lack of new workers is at the core of the industry’s talent shortage.

Ching emphasized companies shouldn’t just focus on recruiting at schools with large, established risk management programs, either. Colleges and universities in their local communities also have a lot to offer in terms of talent. 

“They should get into their community colleges. They should get into their state schools and have an opportunity to meet with risk management professionals and reach out into that community,” he said. 

2) Take Advantage of New Technologies 

One way the insurance industry can appeal to younger workers is through embracing new technologies. Younger, tech-savvy students expect technology to be a critical part of their careers, and they often won’t settle for jobs where the status quo prevails. 

“There are a number of aspects of the commercial insurance industry that have not kept pace with technology,” Nick Graf, consulting director of information security at CNA, told Risk & Insurance®.

“The application filled out by prospect insureds is still largely done on paper (or maybe electronic PDF), but it isn’t being captured directly into a database. The underwriting process is largely driven by spreadsheets, and accessing information on your policy is not possible from a mobile phone app,” Graf continued. “I know of numerous carriers that are still using mainframe programs that were written 30+ years ago.” 

While the industry might be a little slow to embrace technology, data-driven, analytical skills are becoming something employers look for within the industry.

“The ability to use technology and master it towards strategy is the key. If you can’t do that, you will not be in this space,” Ching said. 

“We’re using machine learning, we’re using AI techniques, utilizing the vast information that we have in terms of underwriting and how risks have been managed or priced to be able to … see company performance in the data that we couldn’t see before.

“Technology is the critical piece and the industry, on all sides, needs to upgrade itself in that space,” he said.

Young people aren’t the only ones engaging with a more analytical and technology-driven world; as the risk management and insurance industries begin embracing new technologies, they’ll also attract people from different industries and different areas of the business world. 

People who are in related industries have to have the ability and opportunity to move into risk management and insurance. That should be a vital part of current professionals’ recruitment strategy.

“Look at somebody, for example, like Loren Nickel, who was an actuary. He’s now the risk manager for Google and responsible for understanding and working with all the Google enterprises,” Ching said. 

“So what does that really mean? It means he’s using his analytical tools to be able to see things differently in his environment. A highly, highly fluid environment.” 

3) Professional Networks Need to Focus on the Needs of Younger Workers 

Professional networks can be a great way to attract people into the industry and keep them there, especially if those networks are attuned to the needs of younger workers.

“[Younger workers are] interested in ‘how do I take what I’m doing and thinking about and make it real in the world.’ So I think we need to, too, up and down the educational scale — and that includes local chapters of RIMS,” Ching said.  

“That includes all of the core elements of the risk management community — including the auditors, including compliance, including finance — to open a conversation with the community around what does the next generation of risk professionals look like and how can we, as an organization, help them generate those skills.”

 Outside of professional networks and the risk management community, Ching encouraged individuals to find a mentor to help get them started within the industry. 

“The other thing that would be useful to do: Find a mentor. Find and develop a network that you as an individual can reach out to evaluate issues, bounce things off of other people, etc.,” Ching said. 

4) Improve the Industry’s Image 

Anyone who’s ever watched popular films and TV shows knows that the insurance industry can get a bad rap. In The Incredibles, Mr. Incredible, alias Bob Parr, is eager to turn away from his boring insurance job to go back to a life of fighting crime. In Fight Club, the narrator turns to violence after he becomes discontented with his white-collar job as an underwriter.

Read More: Insurance at the Movies: An Extensive List of Insurance Companies (Real or Otherwise) That Show Up in Your Favorite Classics

Despite being presented as drab in the media, many people find the insurance industry rewarding to work in because it allows them to use their creativity and pursue their passions

“You are challenged every day, but everything is solvable,” Zach Brown, partner at Orion Risk Management, told R&I.

“The resources of knowledge [you gain] are abundant and everything can be customized. Insurance feeds people’s creative needs.”

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Overcoming the idea that insurance is boring isn’t the only challenge the industry faces, however. It also needs to “redefine itself” to appeal to younger generations, according to Ching.

“It needs to appeal to this next generation of potential risk professionals who have slightly different perspectives in terms of what they want to do, how they want to do it, and how long they want to do whatever they’re going to do [on the talent side],” he said.  

“If the industry can portray itself, not just as a risk mitigation space, but in fact a place for entrepreneurs, a place for growth, a place for mergers and acquisitions, a place for generating new sources of risk capital, then you’re going to attract the types of people who would be interested in getting into that space.”

5) Social Media

Part of improving the industry’s image and expanding professional networks means branching out into one of the most frequently used connectivity and advertising tools of our time: social media. 

“I think you also need to get social media platforms engaged,” Ching said. 

“We really didn’t have those networks 25, 30 years ago. We have them now and they increase our ability to sort of understand more about what risk and risk management is.”

Engaging with social media as a tool to build networks will also help employers attract younger workers who are more engaged with the platforms and who often use them during their job searches.

On Twitter, hashtags like #job, #hiring and #jobsearch have become some of the most frequently used hashtags.   

6) Internships 

Offering internships for college students is a great way to enable young workers to learn more about the risk management and insurance industries while also giving them valuable skills. 

Internships can also set college students on a career path in the risk management and insurance industry early. 

Professional organizations, such as RIMS, have already started helping students connect with internship opportunities that could set them up for a career in insurance and risk management, according to Ching. 

“I think that RIMS, the risk and insurance management society, is ramping up its efforts to recruit individuals into the risk management and insurance space by making attractive offers in terms of internships and other opportunities to engage with the risk management professional community,” he said. 

7) College Curriculum Needs a Refresh

Recruiting workers into the risk management and insurance space doesn’t just occur outside the classroom. It has to happen from inside as well, and college risk management and insurance curriculums are in need of an update.

“My biggest responsibility and opportunity is convincing the world that insurance and risk management should be taught in every business school, same as accounting, finance, marketing, etc.,” Zach Finn, director of the risk management program at Butler University, told Risk & Insurance®.  

Ching, who serves as an adjunct professor at the University of Southern California’s Marshall School of Business, echoed Finn’s remarks on the importance of teaching risk management and insurance to students and added that it’s important for curriculums to keep up with the ever-changing industries.

“The world of risk management is changing rapidly. One of the things that I talk about in my classes is the fact that a product service life cycle, when I got into the business in 1979, took about 10 years. So, it included hard and soft market cycles that included innovation,” he said. 

“Today it happens in a year or less. So, the tools and skills that are necessary for the next generation of risk professional is going to be more quantitative. It’s going to be more strategic.”

Read More: 10 Reasons Why Insurance and Risk Management Is a Great Career

The value of having strong risk management and insurance curriculum doesn’t just help future workers in those industries, however. Ching said that he sees more and more students with interests outside these industries taking his classes. 

“The majority of my students are risk management minors. All of them have excellent research and quantitative skills,” he said. 

“I’ve got people in international relations. I had one pre-med type student in my class. She’s interested in the question of health care risk management. Where does that go in light of changes and innovation in the health care state? That’s amazing! I mean, as a senior at school, I would never have thought about that.

“They’re coming equipped with a different set of eyes, and what we need to be able to do is really gear the curriculums around what’s coming up next,” he added.

8)  Recruit More Broadly 

While college campuses are great places to recruit new talent, they’re not the only way that people in the risk management and insurance industries can recruit new workers.

Ching recommends looking within your own companies and to those working in different industries as potential hires in the risk management and insurance industries. 

“The talent issue is not just at the incoming space; it’s up and down the ladder,” Ching said.

“It starts with recruiting more broadly. It just doesn’t have to be in insurance. It can be in health and benefits. It could be in the consulting space.”

He points to the stories people tell about how they got their start in insurance as a reason to recruit older workers and people in other industries. He notes that most people say they fell into the industry or weren’t expecting to have careers in insurance.

9) Recognize That This Isn’t a New Problem

One of the biggest things Ching emphasized was that the industry can’t view the recent talent shortage as a “new problem.”

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“The issue of talent management engagement has been around for at least 10 years. This is not a new exercise. It’s become much more acute because of the numbers of people leaving the industry,” he said.

Understanding the history of talent shortages in the industry can also help people brainstorm solutions based on what did and didn’t work in the past. 

“This talent gap is very similar to what we saw in 1975 through 1985, so there is a demographic shift. Those individuals who started in the business in ’75 through ’80 are now in their retirement periods or leaving the industry in its entirety,” Ching added. 

“This is not new. This has just become more acute.” &

Courtney DuChene is a staff writer at Risk & Insurance. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]