The industry’s heavy reliance on outdated legacy systems may be holding it back from modernizing, panellists note during a Canadian Underwriter webinar — and this could be a problem for attracting IT talent.
“Legacy platforms are a big challenge for our industry,” says Trevor Wall, vice president of sales and distribution of business insurance at Travelers Canada. “There’s a huge modernization push in having rate/quote/issue capabilities within an operating platform.
The industry could be converting these systems for the long-haul, he notes.
“I think this is a journey that’s going to take a decade minimum…to actually fully convert,” he predicts. “I think what a lot of carriers are likely doing is going along the lines of [asking], ‘Where do we get the most bang for our buck?’”
Phasing out legacy systems may also be complicated by M&A activity, notes Jennifer Hill, head of customer, distribution, marketing and regional management at Zurich Canada.
“There’s an acknowledgment that we need to move beyond the legacy systems,” she notes. “It is extremely complicated based on the organization and how many different acquisitions have been bolted in there, and I would just echo it is an impact on talent.”
It has a big effect on hiring IT talent, Hill adds, because it is “very difficult to integrate people into the 40-year-old systems.” But it’s also a huge opportunity, she says. “Data science is massive, and it’s a huge opportunity for people to join the insurance industry and help us in that evolution.”
Recruiting young IT talent into P&C industry is proving to be a challenge. The Insurance Institute’s Demographics of the P&C Insurance Industry in Canada study notes the industry has had difficulties attracting young IT workers in recent years.
“The industry has an older-than-average IT workforce — only 20.6% of people who work in IT occupations within the industry are under the age of 35, compared to 32.6% of IT workers in the workforce as a whole,” the 2018 report reads.
The industry’s IT workforce may reflect the fact that IT recruits often enter the P&C industry at an older age.
According to the survey, “the median age of IT employees that have joined the P&C insurance industry over the past two years is 34. At the same time, the industry is more likely to employ older IT staff: 16.9% of the industry’s IT workforce is over the age of 55, compared to 12.4% for the workforce as a whole.”
“One potential reason behind the industry’s current IT age structure is its need to maintain legacy systems, something that may be less attractive to young IT talent,” the study reads. “Looking forward, the phasing out of legacy systems should gradually make the industry more attractive to young IT professionals.”
However, IT talent is in demand, and the report — released before the dawn of the Great Reshuffle within and outside the P&C industry — notes this could prove to be an area of concern for the industry.
“If we’re talking about a bright career path in the insurance industry, and then we’re trying to bring new entrants into 40-year-old operating systems, it’s a tough juxtaposition,” Wall observes.