Roderick Mann, jadetimes staff
Introduction
The insurance industry is indeed facing a significant talent shortage. Chief among the reasons is the fear of Gen AI obsoleting these jobs, a fear that pervades a lot of the legacy career opportunities. Many employees have left their jobs in search of more fulfilling work and better work-life balance, a trend that has affected various industries, including insurance.
Gen AI is breaking through old hurdles and barriers, requiring a completely new assessment of business operations, creating vastly improved operational performance and excellence. Focusing Gen AI on the administrative side of insurance is reducing costs and improving productivity, enhancing risk management, and reinventing and redefining what is possible in insurance.
Younger generations often perceive traditional industries like insurance as less exciting and offering fewer growth opportunities compared to sectors like technology. Young high performers are focused on building long-term skills.
PwC conducted a global "Hopes and fears" survey of over 30,000 workers. The results revealed that 39% of employees think their jobs will be obsolete within five years. The respondents know they’ll need to be able to do something different in the future, but the immediate effect is to create a compelling disincentive toward jobs perceived as eventually replaced by Gen AI algorithms.
The insurance industry is leveraging generative AI (Gen AI) with innovative ways to improve upon efficiency, accuracy, and customer experience. Gen AI can analyze vast amounts of both structured and unstructured data to identify patterns and provide risk-based pricing recommendations. This approach optimizes underwriting decisions.
AI-driven systems can expedite claims processing through the process of detecting anomalies and seeking to minimize fraudulent claims. By generating examples of fraudulent and non-fraudulent claims, Gen AI can train machine learning models to better detect and prevent fraud.
AI-powered chatbots and virtual assistants handle customer inquiries, provide real-time information, and assist in the claims process. All-in-all this is improving customer satisfaction while at the same time reducing the human workload.
Gen AI can generate marketing material, provide product descriptions, and custom communications with tailored content. Gen AI can create synthetic data from existing datasets, which it then uses to improve the performance of predictive models.
A large portion of the current insurance workforce is nearing retirement, with projections indicating that nearly 50% of the workforce will retire within the next 15 years. This is a significant shift. Baby Boomers, many of whom have held leadership and expert positions in the insurance industry, are retiring en masse. This transition will bring a few challenges and opportunities. The departure of seasoned professionals may create a gap in institutional knowledge and experience.
Changes and entirely new skills are needed
The industry requires new skills, especially in areas like technology and data analysis, which many current employees may not possess. Insurers are exploring solutions such as process automation, up-sourcing complex tasks to a global workforce, and creating more compelling career paths to attract and retain talent.
A new era of risk means new technology to deal with it. Risk resiliency remains relevant but not much progress is being made given new and more catastrophic natural disasters and increasing claims. The insurance industry’s immediate response is to raise the cost of insurance. Insurers must change their traditional business methods and technologies used for assessing and managing risks, for they are no longer working.
Modern insurance is hamstrung, struggling with an out-of-sync business operating model and poor technology foundation. Legacy processes and the built-in business assumptions need to be revamped into entirely new operating models and technologies.
Insurers will need to leverage technology and redefine and optimize their business model that will obsolete the old ways. A new technology paradigm shift is going to enable agility, scale, innovation and operational optimization, to align with these new risks.
So, what’s in it for you?
Four areas will see heightened interest and demand by customers. These are areas you might want to focus upon and pursue expertise in if you’re interested in an insurance career:
1. Usage-based products:
a. Telematics Devices: These gadgets, installed in vehicles, track driving habits such as speed, distance traveled, and braking patterns.
b. Data Analytics: Insurers analyze the collected data to determine risk levels and adjust premiums accordingly.
c. Personalized Premiums: Drivers with safer driving behaviors benefit from lower insurance costs, while high-risk drivers may face higher premiums.
2. Parametric insurance that covers a wider array of threats. Parametric insurance is a specialized form of coverage designed to address the challenges posed by disasters further fueled by climate change and other new emerging risks, like cyber.
3. Specialty insurance tailored to meet unique or niche risks. Specialty insurance addresses specific risks and unique circumstances that standard insurance policies may not adequately cover. The insurance offers tailored solutions for businesses and individuals with exceptional needs, ranging from high-value assets to niche industries.
4. Greater demand for supplemental and worksite benefits. New sales for workplace life insurance, disability insurance and supplemental health products have increased significantly, according to new data from LIMRA’s workplace benefits sales surveys.
Since most younger people have dismissed insurance as a possible career choice, the opportunities will abound, but the workers will be few. Why not consider taking advantage of a field that is at the beginning of a technological revolution that most people haven’t even noticed?
Comments