No longer a long-range concern on the distant horizon, the talent crunch within the insurance industry is here. Despite years of warnings and research, insurance organizations face a perfect storm of labor market challenges, including an aging workforce, an impending wave of retirements and an increasingly shallow talent pool.
Insurance, as an industry, is more aged than the rest of the economy. According to the U.S. Bureau of Labor Statistics (BLS), nearly 50 percent of the insurance industry workforce is older than 45 years old. There are approximately 693,000 insurance workers aged 55 and older — an increase of 74 percent within the past 10 years.
This rapidly aging workforce is driving an unprecedented wave of retirements. Within 15 years, nearly 50 percent of current insurance professionals will be retiring. With the BLS reporting that less than 27 percent of industry employees fall under the age of 35, the current bench of less-tenured employees within insurance is not large enough to match the departure of retiring professionals. It is estimated the industry needs to add 400,000 open positions to its bench by 2020 in order to remain fully staffed.
Unfortunately, today’s risk and insurance graduates only meet 10 percent to 15 percent of this growing talent need. Historically viewed as “boring” and “behind the times,” insurance remains an unpopular career choice among today’s young professionals. Further compounding this challenge is the reality that less than one in 10 young professionals are interested in working in the industry.
What can insurers do to address these growing talent challenges? Perhaps the answers lie in the rapid emergence of cyber.
Cyber on the Rise
Cyber is everywhere. Recent well-publicized cyber attacks and data breaches at Equifax, Verizon, Deloitte and Target have brought cyber security to the forefront. While the total number of data breaches and record exposures fluctuate annually, organizations continue to see an upward trend. Cyber security and the losses associated with cyber crimes are now a massive concern within the business world.
According to the Identity Theft Resource Center, the number of U.S. data breaches tracked in 2016 hit a record high since the center began tracking in 2005. The 1,091 breaches reported in 2016 represents an increase of 39.9 percent and of 39.3 percent from 2015 and 2014 respectively. By 2021, cyber crime damage is expected to cost businesses $6 trillion annually, according to Cybersecurity Ventures.
Cyber risk has moved into the top three global business risks, according to the Allianz Risk Barometer Survey. This is a significant jump from its fifteenth-place ranking in 2013 and places it just one point behind the number two risk — market developments. Cyber crime has become a key concern among today’s businesses.
Already, the BLS is reporting more than 200,000 open cybersecurity positions. During the next 10 years, cyber is predicted to see job growth of 37 percent. In response to this growing demand, colleges and universities are adding cyber programs at a rapid pace. Often designed as a multi-departmental degree or specialization, these programs reflect the ubiquitous nature of today’s cyber threats and allow students to develop skills across potential industry sectors. These individuals will be key to combatting the growing cyber threat and are an important talent segment for potential insurance recruitment.
Recruiting for Cyber
Cyber risk is evolving at a rapid pace. Today’s insurance organizations are working hard to evolve with it. Already, focus is on the latest round of emerging risks, including the growing use of cloud services, the use of personal devices for business, the emergence of social media and the resulting potential for online slander.
While this breakneck pace of change and the rapid evolution of cyber crime is a cause for concern within the industry, it also provides a unique opportunity for insurers. Embracing the innovative technologies being introduced in response to an ever-evolving range of risks allows organizations to combat the misconceived view of insurance as “backward” and “behind-the-times.”
Today’s young professionals want to work for organizations on the forefront of new and provocative advancements. The expanding selection of cyber risk coverage options — including liability, crisis management, cyber extortion and business interruption — fulfill this desire.
Insurance organizations should embrace and publicize their work with cyber risk and cyber crime. Highlight what has already been done, what projects are currently underway and what the future may hold in terms of innovation. Focus on how young professionals can play a role in this exciting and fast-changing future.
Make sure to promote your organization’s innovative work on your website and social media to establish your company as forward-thinking and cutting-edge. Develop a digital presence that highlights your use of new technologies and helps to build a reputation as innovative. This public persona will go a long way toward increasing interest among today’s top talent.
While cyber crime and cyber risk are certainly concerns for the industry, they also provide insurance organizations with a unique recruiting perspective. In addition, embracing the innovative opportunities being driven by cyber may be key to shaping insurance into an industry that everyone wants to be a part of.
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