Talent war goes high-tech

Competition for talent remains fierce in the commercial insurance space in Canada, with brokers and carriers starting to leverage technology to help tackle the challenge.

“We’re seeing some commercial brokerages put increasing emphasis on [non-traditional approaches] and getting more digital-savvy and plugging into different ecosystems than they traditionally would to hire talent,” said Mukul Ahuja, partner and financial services and insurance leader at Omnia AI, Deloitte Canada’s artificial intelligence practice. “So, less relying on friend and family networks and specific programs they would typically go after, or carrier partners they work with.”

Instead, brokerages are trying to “ensure they have capabilities and talent programs in place that help provide a pathway for producers,” Ahuja said during Insurance Bureau of Canada’s (IBC) first-ever Commercial Insurance Symposium in Toronto last fall. And the key objective for brokerages is to let prospects know about these initiatives.

If commercial brokerages are getting more competitive and deliberate in their recruitment efforts, that’s because the war for talent has become the Number 1 “external threat” facing brokerages, according to Deloitte’s recent commercial insurance market insights report, which surveyed IBC’s broker and carrier contacts to get a comprehensive view of the industry. The survey included brokers with commercial books valued between $5 million and $600 million, and carriers with commercial books between $7 million and $3 billion.

Brokers and insurers both identified “talent quality and availability” as the top external pressure they faced.

“The talent pressure continues to take hold in this particular space and everything else from that perspective is secondary or tertiary in the minds of commercial brokers,” Ahuja said during the panel discussion, State of the Industry: What’s Driving the Commercial Insurance Market? “That is the Number 1 external pressure that they’re dealing with: How do we train the producers, the relationship managers, and the service providers of the future in this complex area?”

On the carrier side, insurers are relying on “increased emphasis and investment in areas like innovation, digital, advanced analytics and big data amongst the carriers to try and attract and drive talent into those businesses and showcase the interesting and dynamic side of the industry, much more so than ever before.”

This may mean heading up labs, collaborating with incubators, or working with insurtechs, Ahuja said. “These are some of the levers that organizations are pulling on to try and understand the true dynamics of the industry and the exciting opportunities ahead.”

In the claims and underwriting space, there are questions about how to bring in young talent and transfer the underwriting expertise of senior underwriters, added panellist Greg Bubela, manager

of strategy and operations consulting with Deloitte.

“I know a lot of companies are worried about succession planning, especially on the carrier side,” Bubela said. “Obviously with the implementation of new technologies — being able to automate some of these underwriting rules, and being able to put a lot of that knowledge into the system — you’re actually seeing the onboarding process for young talent being much quicker. And so the talent gap is eventually going to close as we start to be able to automate and bring technology in a bit more.”

The war for talent is certainly very real, said Deloitte partner Mario Iacobacci, who leads the firm’s economics and asset advisory team. As an economist, Iacobacci looks at the labour market. While there should be incentives for companies to invest in “labour-reducing technologies,” because there’s a return on investment by doing so, Deloitte isn’t seeing that happen, Iacobacci reported.

To make investments, there has to be confidence in returns over a period in time “and maybe there isn’t that confidence,” he said. “But that’s certainly the direction it’s pushing in. For firms that are maybe facing these constraints, this war for talent, you would expect they would be looking at some of those sources of mitigation [e.g. automation].”