May 17, 2017 by Brooke Smith
Canada’s got talent, but just which industry is going to get that talent? Recent reports in the P&C insurance industry point to a growing trend of a skills shortage and lack of talent. That’s enough of a disturbing trend that insurance CEOs are sitting up and taking notice. According to PwC’s 2016 CEO Survey, 81 percent are concerned that skills shortages are a threat to growth. That’s up from 70 percent in 2015.
This lack of talent is very concerning, says Danny Davies, chief people officer with Aviva Canada. “It’s potentially a chronic problem for the industry.”
But insurers and brokers are responding by starting to look outside the insurance industry for that talent. They’re looking for innovative digital natives who like to experiment and aren’t afraid to fail.
“We typically hire outside of the insurance industry,” says Andrew Lo, president and chief operating officer at Kanetix. “Going digital has been a huge buzz. We’re trying to serve consumers in the way they want to shape and use insurance, which is, ultimately and imminently, online.”
Jeff Desbiens, vice-president, human resources, with Economical Insurance, agrees: “We’re tapping into these new skills and experiences that come from outside the industry. We really want — regardless of demographic cohort or technical expertise — people who are curious, results-oriented, open-minded and optimistic.”
While insurers and brokers might know the skills they want, how they’re going to get those recruits with those skills is another issue. The first option is recruiting the new kids on, or soon to be on, the workforce block: millennials.
Canadian demographic forecasts suggest that 75 percent of millennials will be in the workforce by 2028, so insurers and brokers need to move, if they haven’t already, to attract this digital-savvy cohort.
But it’s not going to be that easy. “[Insurance is] not initially seen as the sexiest opportunity for a young individual,” says Desbiens. True: according to the 2008 Millennials in Insurance Survey, 63 percent of millennials said the insurance industry is “old in general,” and 53 percent said it’s “not innovative.”
There’s a threat if there’s a dry-up of talent that’s neither interested nor cognizant of the sector.”
Lo says this digital talent is hard to find, because it’s in such high demand. However, Kanetix has a solution. “We have the mindset that salary is not the only thing that retains people,” he says. “The top priority for us is engagement within the workplace, to keep [employees] excited, engaged and passionate about the work they do. We do perks like any other kind of digital organization — Friday socials, ping pong tables, foosball tables and video games. We even have meditation classes and massages.” Aviva blends its experienced talent (those with insurance knowledge) with its millennials (roughly 30 percent of its employee population). “From that perspective, I feel like we’re in a good spot to make sure we’re using the capabilities and giving those people great opportunities at the same time as getting people to come and join the industry,” says Davies.
One of those opportunities is a global graduate program, from which Aviva hires upwards of 50 graduates each year, globally. “We allow them to come and spend a year in each of our insurance businesses, and then rotate around the world learning from the different international opportunities they get,” he says.
According to a 2015 Deloitte insurance survey, nearly two-thirds of companies surveyed said they do a sufficient to excellent job in developing a culture of apprenticeship and on-the-job learning.
“We give them a good blend of a lot of things we do from a technological and digital perspective but also from our insurance fundamentals,” says Davies. “It’s important we hit on that sweet spot for millennials for insurance fundamentals, which link so well with having a greater purpose.”
That greater purpose is important, according to Desbiens. “The core of what we do is helping people who’ve experienced a loss,” he says. “That really aligns with the values of a lot of millennials when you think about their sense of community, about how they look at the broader world.”
That sense of community and helping people is something that resonates with many millennials: according to a 2012 survey from The Institutes, Millennial Generation Attitudes About Work and the Insurance Industry, almost half (49%) of millennials were interested in work that focuses on helping others.
Still, insurers and brokers are competing with major banks and major retailers for those skills, says Steve Yendell, insurance advisory leader with EY. “Every millennial in university is more apt to speak of Google, Apple or exciting industries before they’re apt to say a broker-based property and casualty insurer.”
However, Yendell doesn’t necessarily see this as a threat. “I think it speaks to the opportunity this industry has to reshape the sector as an employer of choice,” he says. “There’s a threat if there’s a dry-up of talent that’s neither interested nor cognizant of the sector.”
However, just how interested the millennial talent is, is key. According to the Institutes survey, about 25 percent were somewhat interested and another 25 percent were not very interested in the insurance industry. And only 5 percent of millennials said they were very familiar with the industry.
While some millennials will find rewarding careers in insurance, insurers and brokers will still likely need to hang on to what (or, rather, whom) they’ve got. A recent McKinsey and Company report stated that 25 percent of insurance professionals will retire by 2018. That’s just next year.
One way to retain that talent is to promote from within. Intact focuses on making sure its employees have career development. The company has a leadership development program for those interested in becoming leaders (e.g., managers, directors, vice-presidents and senior vice-presidents) in the organization.
Its career management program helps employees “identify what they’re interested in and what paths they need to get there,” says Denise Thompson, vice-president, human capital management. Employees take part in a personal assessment and then attend a workshop where they can network with others.
Intact also offers secondments, job shadows and online resources (e.g., videos of employees in various roles in the organization who talk about what they do); role ambassadors offer other employees a chance to talk about the kind of work they do.
Desbiens says Economical, too, is placing more emphasis on individual career paths and development at all levels. “At each level of the organization we’re able to identify our high-potential talent who have the capability and competency to not only be successful in their current roles, but also be successful in other levels within the organization.”
Using retirees is another way to avoid that brain drain. Although it doesn’t have a formalized program, Intact has a few retirees across the country who have offered their expertise in a particular area or their assistance with special projects. “We keep in touch with those people,” says Thompson. “We have a few who are with us right now.”
Succession planning — when older employees fully retire (with no intention of consulting or part-time work) — is a third strategy.
Intact has a well-established plan, says Thompson. “We’ve been doing it for the manager levels and above, and specialist roles for many, many years.” Intact’s executive conducts talent discussions three times a year and, because of this focus from the executive level, the company has about seven individuals as potential successors, on average, for each senior vice-president. “[The discussions] help to identify those people early on and develop their skills to provide them with lateral and progressive roles and target their leadership development.”
The P&C insurance industry needs not only to consider its own insurance talent, but also the new digital natives outside insurance walls. For the millennials who weren’t interested in working in insurance, 44 percent said it sounded boring and 54 percent didn’t want to sell insurance, according to the 2012 Institutes survey. “There’s just a misconception out there of what insurance is and how traditional the industry is,” says Desbiens. “It’s important to get that message out.” If that message resonates with millennials, then it should go a long way to alleviate the danger to industry growth of a lack of human resources.
Copyright © 2017 Transcontinental Media G.P. This article first appeared in the May 2017 edition of Canadian Insurance Top Broker magazine
This story was originally published by Canadian Insurance Top Broker.