As the world and workforce change, insurers need to adapt their old ways of working to keep employees engaged and ensure they have the right mix of skills. McKinsey spoke with Julia Sperling-Magro, a partner in the Frankfurt office, to understand more about current developments within the workforce and the skills the insurance industry needs to win its war for talent.
McKinsey: How will insurers work in the future? What skills will be of critical importance?
Julia Sperling-Magro: In the future, insurers will have to recruit their staff according to new standards. The way we work will change significantly in almost all functions and will require new skills. Social, emotional, and technological skills will become more important. And the more activities are taken over by machines and algorithms, the more important creativity, critical thinking, and social intelligence will become, in addition to technical and digital skills at the relevant interfaces. These skills will help shape the change.
In claims handling, for example, it will be increasingly important to provide policyholders with advice and support both digitally and in person, especially for complex claims. Actuaries will use powerful quantitative tools for their work much more frequently than today. And while claims examiners will not be doing the actual programming, in the future they will be working more closely with programmers and, above all, with experts in data analysis.
McKinsey: How will insurers need to change to attract people with these skills?
Julia Sperling-Magro: The market for talent with the skills insurers are looking for has dried up worldwide. Already, 43 percent of decision makers around the globe say they are having trouble finding the right people, and another 44 percent expect a shortage in the next five years. Across all industries, critical thinking, leadership skills, and advanced data analytics are currently in particularly high demand for training.
Many insurers underestimate the importance of soft factors in the war for talent. For example, participants in a Generation Z focus group described the working environment in the insurance industry as “stuffy.” Top talents lack the optimism that prevails in other industries (such as technology and telecommunications or even biotech and pharmaceuticals).
A few insurers have already seen the signs and are consistently investing in an inspiring work environment. For example, some are radically redesigning workspaces to promote interactive and interdisciplinary work, establishing spin-offs with flatter hierarchies and less bureaucracy than in the parent company, and, as in other industries, making work more flexible (through remote and hybrid models). Even once the pandemic is no longer disrupting daily life, experts expect a significant increase in the amount of time spent working from home compared with prior to 2020.
McKinsey: Where is this trend heading, and what else can insurers do to ensure they’re ready for the future of work?
Julia Sperling-Magro: There’s no doubt: the right talent and skills are essential for sustainable success. But even the best people need the right conditions to develop their potential. According to McKinsey analysis, the companies that are particularly successful are those that offer their employees freedom to try out new methods and learn from mistakes and that are clearly committed to diversity.
But diversity is only one aspect of a motivating work environment. Inclusion, participation, and meaning are similarly important, especially for employee retention. And in difficult times, the human factor is more important than ever for a company's resilience.
Companies that want to increase their resistance to crises independently of current personnel bottlenecks should therefore take people more seriously than processes, see every employee as a whole person, and allow all employees to experience the meaning in their actions: their purpose.
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Julia Sperling-Magro is a partner in McKinsey’s Frankfurt office.
For more on winning the war on talent, see: