Attracting talent to captives: a plan is needed

Terms such as perpetuation, succession planning, and aging workforce have increased exponentially in insurance trade literature and at conference sessions for good reason. All signs point to a continuing talent shortage in the insurance industry, including for captives.

But there is reason to be positive! We know the captive insurance industry in particular offers unique and desirable employment opportunities for new generations. This article examines demographic data and the social dynamics affecting the talent shortage and offers a “Top 10” list of solutions to consider implementing to combat the trend.

Labour shortages: what statistics tell us

There is great talent in the insurance industry, but unlike in many other sectors, the insurance workforce is an aging one. Because insurance often requires specific education and certification, the deficit is further complicated. The baby-boomer generation is still marching towards retirement, and by 2030 all boomers will be 65 or older. According to the US 2020 Census, the population of those aged 65+ will nearly double over the next few decades, reaching 88 million by 2050.

According to recent estimates, the number of employees older than 55 years in property and casualty insurance is 30 percent higher than in any other industry. In June 2021, the US Chamber of Commerce issued a report citing US Bureau of Labor Statistics numbers forecasting that over the next 15 years, 50 percent of the current insurance workforce will retire, leaving more than 400,000 open positions unfilled in the industry.

While the COVID-19 pandemic drove some into early retirement, for some, economic impacts forced planned retirements to be put on hold. Therefore, statistics fluctuate as to the net effect of pandemic-related decisions around retirement.

Now for some good news: once they do enter the insurance industry, younger generations are retained. One study showed that once hired, 70 percent of millennials plan to work within the insurance industry as long as possible, and of those younger workers hired, 87 percent would recommend a career in insurance to family or friends.

The challenges

Lack of knowledge, and therefore interest, in the captive insurance industry as a career is a well-known issue even though the insurance industry offers great opportunities to work in a variety of avenues: marketing, finance, data analysis, information technology—all things that would seemingly appeal to younger generation.

Young people are also thought to have less experience with insurance because they have delayed home or car ownership and are generally less familiar with insurance as a commodity. Eighty percent of millennials reported having limited knowledge and understanding of employment opportunities available within the insurance industry overall, according to a 2012 survey conducted by The Institutes.

The percentage of the overall workforce that is aware of and available to the captive insurance industry is especially affected by labour shortages because of its sub-sector niche.

Multi-faceted solutions are needed

To attract and retain talent, we need to know who we need to convince of the captive insurance industry’s great benefits. Professionals born between 1985 and 2000 (and those born later, graduating college and entering the workforce now) are generally thought to have an increased use and familiarity with communications, media and digital technologies. They are capable, smart, and creative, and have high expectations about what it takes for a company to earn their loyalty.

The following tactics should be implemented together for the greatest impact:

1. Promote the use of technology. In an era of constant connectivity and communication, emphasising the organisation’s commitment to technology and innovation can attract a younger generation to the insurance industry. Recruitment via social media, demonstrating this ability, is also key.
2. Networking can still be accomplished in an environment of flexible work locations. Encourage attendance at conferences by bringing a mentee to be introduced to experienced leaders. Make sure they are invited to the social events and get a full picture of how competitors know and respect each other in our captive insurance industry.
3. Encourage industry participation in peer networking groups. Require your young worker reach out to industry peer groups, whether by location or national. An example is the Captive Insurance Company Association’s (CICA) NEXTGen initiative. Launched in 2019, NEXTGen advises CICA on providing education and networking to people wanting to advance their captive insurance careers. The committee facilitates social networking with peers and experienced industry leaders at various captive insurance conferences around the country.
4. Allow meaningful and frequent travel to work meetings. Encourage younger professionals to observe or even lead a portion of client or prospect meetings. Captive insurance is a global industry, and many people in the industry travel domestically and internationally for work meetings, conferences and more. A job in captive insurance can lead to unique worldwide travel experiences, and many young professionals will see this as highly positive.
5. Rethink education requirements. Some potential employees may not have captive insurance experience but may have data analytic skills to help analyse trends and opportunities. Others may not have a bachelor’s degree but with an associate degree and background in business management, technology, or another vital skill, such candidates could be a great fit. In other words, look at the skills each person possesses to determine whether their background would be an asset, rather than making them fit into a strict job description.
6. Retrain existing employees. In this highly competitive labour market, giving employees the tools needed to move up in the organisation helps with retention, and fills gaps in technical areas where there simply may not be available external candidates. Consider which employees could fill needs outside their current division if they had additional training and investment of resources.
7. Embrace environmental, social, corporate governance (ESG) standards. In addition to meeting the expectations of clients and regulators to provide equitable opportunities, this approach can attract a new generation that believes that how an organisation integrates ESG matters. According to science news site Phys.org, job-seekers want employers to embrace the same causes they themselves do.
8. Provide robust training upon hiring, and encourage industry certification. Young insurance professionals want detailed digital training on their company’s own products, process, and production. However, they won’t know which groups exist to offer education for the industry as a whole unless it’s presented to them. Have them research certification offerings from organisations such as the International Center for Captive Insurance Education, education from associations such as CICA or states’ own captive associations, and state licensure options.
9. Offer mentors within the organisation. Pairing young professionals with other young professionals in the organisation will allow for peer-to-peer networking among a cohort, but one-on-one mentoring with an experienced leader is priceless. Many young professionals want this time with leaders who can guide them through their first couple of years on the job.
10. Conduct frequent (more often than annual) check-ins with new employees to make sure they are getting what they need. Ask open-ended questions about where onboarding or continued education could be improved. Pivot where necessary, even on job descriptions that need to be adjusted to account for changes in their interest as their knowledge of your company and the captives industry grows.

With a thoughtful multi-faceted plan, an organisation can attract and retain young workers and pair them with succession planning goals. As an industry, each of us can continue to work on boards and committees reaching out directly to next-generation professionals and calling on each other as mentors to lend advice and encouragement to our company’s younger workers.

We can continue to speak of the uniqueness and camaraderie our industry demonstrates like no other, and the respect with which even competitors most often treat each other. We have a fantastic story to tell about opportunities in travel, leadership, and creativity that can be found in the captive insurance industry.