Insurers find themselves with many challenges to deal with in the coming years, but also many reasons to feel confident about growth. So, will Insurance prove to be the next growth industry?
Taking a look at the context and seeing where insurers stand right here, right now is a good place to start. 2017 was not without its problems for the industry. According to Verisk, US P&C insurers saw underwriting losses double in the first half of the year. Net income was down by close to 30% in the first six months. But there were positive signs.
Signs of growth on the horizon
Much of the reason for optimism about accelerated growth centers on emerging markets. Deloitte reports that China is now the third largest insurance market in the world. Particularly when it comes to rapid growth, the P&C market is where the smart money is.
Deloitte also suggests that, domestically, commercial lines of insurance are growing at a greater rate than personal lines. Cyber is a major factor and the property/casualty insurance industry.
As the industry shifts, Insurers must rethink and reimagine the ways they communicate and engage with their customers. In a digital world, the emphasis needs to be on digital-first strategy.
Growth in job opportunities within the industry
Conversely, another major challenge facing insurers looks set to create its greatest opportunities – certainly in terms of jobs growth. The demographics of the industry are set to change considerably. Up to 400,000 baby boomers are set to retire from the insurance industry over the next few years. The challenge this creates is obvious – a shortfall of workers. Of course, some of the slack will be eased by automation but, at the same time, this means the next few years will see the industry on the hunt for new talent.
As is the case with other industries, insurance sector companies will need to rethink the way they recruit. It will be those who have the recruitment practices, and effective development and training schemes who will prosper in the years to come. Insurance companies, insurance brokers and corporate risk management departments are all areas which will see a rise in vacancies in the coming years.
The marketing of the industry as an interesting and rewarding one to choose a career in must be effective. Recruitment is increasingly about marketing, and it will need to be if the insurance industry is to cope with the impending talent shortage.
However, whilst it’s prudent to appreciate the difficulties that lie ahead, and the implications of not addressing these head on, there is no reason for the industry to lose its optimism and positive outlook. Yes, the momentum that commercial insurance has right now could be lost if the talent shortage is not addressed – but it will be addressed. Insurers will be able to cope with the demographic shift that its workforce is going through. In addition to beefing up their recruiting activities, It wouldn’t surprise me to see additional merger & acquisition activity as well.
Insurance companies will need to convince millennials that a career in the industry is an appealing prospect. Job satisfaction, good work/life balance, job security, and companies that do well while also doing good will all be advantages that need to be highlighted to prospective candidates.
I guess you could say the insurance industry must undergo a rebranding campaign. Time to engage some really smart marketers, I’d say.