Bridging the Insurance Industry Talent Gap through Strategic Up-Sourcing

The insurance industry is on the brink of a significant talent shortage, with projections indicating that 50% of its current workforce will retire in the next 15 years, potentially leaving over 400,000 positions unfilled. This looming talent crisis, highlighted by the U.S. Chamber of Commerce, is exacerbated by an unemployment rate in the insurance sector that is nearly half the national average, as reported by the U.S. Bureau of Labor Statistics. The pandemic demonstrated the feasibility and productivity of global remote work, presenting outsourcing basic tasks as a partial solution to the talent crunch. However, this approach only addresses entry-level support roles and does not suffice for sustaining long-term success.

In response, the industry is shifting towards up-sourcing — delegating complex, higher-value tasks to a global workforce. This strategy involves leveraging either internal teams or knowledge process management (KPM) providers equipped with the requisite insurance knowledge, process discipline, and technological capabilities. The erosion of insurance expertise poses risks across the board, from underwriters grappling with nuanced decisions to agencies facing increased specialization challenges and insureds experiencing chronic underinsurance in critical areas like cybersecurity and flood coverage.

To combat these challenges, insurance organizations are engaging with KPM partners capable of managing sophisticated workflows, thereby enhancing operational efficiency and facilitating growth. Examples include streamlining the submission-to-bind process to improve bind ratios and optimizing renewal workflows for better account retention. This strategic pivot to up-sourcing not only aims to mitigate the talent shortage but also enhances policyholder service and agency profitability by capitalizing on the depth of insurance knowledge that remains the industry’s most precious resource in a rapidly evolving market.