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Insurance companies must make themselves more attractive to talented tech professionals if they are to succeed when the current economic outlook improves.
Organisations in the sector are re-evaluating their traditional IT to help them out of the current downturn. This includes increasing IT outsourcing, consolidating IT supplier portfolios and expanding agile methodologies, according to Everest Group.
But to compete and grow going forward, they realise they need to improve their digital offerings and – to do so – need to fill a skills gap.
These companies, often some of the most conservative enterprises, must change how they work if they are to fill vacant tech job roles. According to Everest Group, 25% of required tech roles are currently vacant.
The insurance sector is experiencing rapid disruption as a result of the insurtech sector, which – like the fintech sector – is shaking up a traditional industry. Tech startups are forcing traditional businesses to become digital first, either directly through offering services themselves or indirectly through supplying traditional businesses.
These changes require very different skills to the traditional IT teams at insurance companies and there are gaps in the workforce.
“The digital talent gap is a significant challenge in the insurance industry,” said Ronak Doshi, vice-president of IT services at Everest Group.
He said that nearly a third of the workforce in the insurance industry is nearing retirement, taking with them knowledge that can be lost if not passed along to younger employees.
“But only 4% of millennials are interested in working in insurance technology roles because of the negative perception they have about the industry being slow to adopt technology and having an antiquated culture,” said Doshi.
“To attract the type of digital talent needed to build a more profitable future, insurers must make themselves appealing by offering disruptive work, robust training, attractive employee propositions, and agile and collaborate ways of working.”
The speed at which the industry is transforming means insurers do not have the luxury of long lead times to find and hire the right staff. But IT outsourcing is being used to fill the gaps in the short term.
One senior IT professional in the sector agreed insurers must digitise if they are to prosper. “We believe we should be a tech company that sells insurance rather than an insurer harnessing tech,” he said.
He said businesses need to fill tech gaps quickly and are increasingly using Indian IT services companies to do so. “This is the best way of getting hold of the right people quickly,” he added. “Once you get your digital strategy going, you can then start hiring the right permanent staff.”
Read more about insurance industry
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- UK startups focused on technology for insurance companies saw capital investments double last year.
- Insurance companies are investing in digital innovation, with a new breed of leaders formalising enterprise strategies.
- Insurance companies in Europe are under threat from companies outside their sector as they fail to keep up with digital developments.