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NU Online News Service, Jan. 15, 1:37 p.m. EST
The U.S. property and casualty insurance industry has a problem attracting talent and fails to make the coordinated effort needed to find a remedy, according to McKinsey & Company.
The management and consulting firm said that while there is universal agreement within the industry that there are problems attracting talent that needs to be addressed “before they get worse,” the industry’s attempts to remedy the issue “have been fitful and disjointed.”
McKinsey went on to say that if it fails to remedy the problem it will “eventually compromise carriers’ ability to compete against organizations outside the industry.”
But there are some advantages in place that if correctly marketed, should bring needed talent to the industry, the firm said.
The report released yesterday titled “Building a Talent Magnet: How the Property and Casualty Industry Can Solve Its People Needs,” was sponsored by The Risk Foundation.
After a four-month review involving interviews with leading insurers and brokers, McKinsey measured their opinions against demographic data to determine the challenge the industry faces. It also reviewed the state of education and discussed the situation with faculty and graduates.
McKinsey concluded that “the resulting picture is not a pretty one.”
Tanguy Catlin, associate principal with McKinsey, said in an interview that one major hurdle the industry needs to overcome is the perception that it is “not sexy or exciting.”
To do that, he explained, the industry will need a unified voice. However, while many in the insurance sector agree with the concept, regulatory and cultural factors pose problems, according to executives interviewed by the firm.
“The industry has never been able to collaborate,” said Mr. Catlin. “Unless they collaborate, it is unclear how they will overcome the talent challenges.”
Other very competitive industries—the hospitality industry, for instance—have overcome their competitive issues by developing a marketing association geared toward the single purpose of bringing talent into the industry, he said.
Mr. Catlin noted that while there are a number of insurance associations that make attracting new talent a part of their mission, it is only a minor part and lacks the scale equal to the challenge.
Among the report’s conclusions:
• The property and casualty insurance industry faces three challenges in attracting high-quality talent: a poor reputation, a limited understanding among high school and college students of the industry’s career opportunities, and a limited pool of trained talent.
• There is cause for optimism. The industry’s risk management jobs offer many of the qualities—including stability and social relevance—sought by young Americans. The industry’s schools of risk management and its professional associations provide a ready platform for attracting and developing these young job-seekers. Finally, the economic downturn has made some previously inaccessible high-quality talent available.
• Coordinated actions are required. To take advantage of these positive factors, the industry’s main participants—insurers, reinsurers, brokers and agents, professional associations and schools—must act with a unified voice to improve the industry’s reputation, build awareness of the industry’s opportunities, expand the number of insurance and risk management degree graduates, and improve education and training.
• The work involved will be neither easy nor quick. The industry will need to collaborate in unprecedented ways. It will take years before significant results will be realized. The potential payoff of upgrading talent will, however, offer a good return on the effort.