Uncompetitive pay and geography stand as the biggest obstacles facing insurers in their efforts to hire tech professionals, experts say.
This is despite the fact that an industry-wide focus on predictive analytics, fraud prevention, and core systems replacement projects has increased demand for IT skill sets.
A new labor study by insurance research firms The Jacobson Group and Ward Group found roughly two-thirds of P&C and life insurance companies plan to expand staff in 2016, citing expansion into new markets and anticipated increases in business volume. Overall, the industry is expected to see a 1.72% increase in employment over the next 12 months, led by technology. The estimate is based off responses from 90 U.S. companies to the study.
“We thought we would see a reduction in employment due to continuous amounts of change in companies’ core admin and financial systems,” said Jeffrey Rieder, partner and head of Ward Group. “But pent-up demand for insurers to move off legacy systems has created a need for tech related staff.”
The problem for insurers remains getting tech pros in the door. Lower pay compared to opportunities available on the west coast, being predominantly located outside of major metropolitan areas and the stigma that insurance is boring continues to plague the industry, Rieder says. A Robert Half Technology study finds that New York, Los Angeles and Chicago pay 123% or more of the national averages for IT salaries, while insurance clusters like Iowa or Ohio pay at or below the average.
Efforts on the part of insurers to attract tech talent greatly differ from a decade ago, Rieder says, when skilled underwriters and claims people were in high demand. These days, much of the core process is automated leading to reliance on new systems being greater. Companies are now more open to employees working from home allowing for more flexible schedules. They have also made attempts to improve facilities, adding more color and thereby creating a vibrant work environment in tune with today’s culture.
"The financial crisis put most insurers’ projects on hold. But as the country recovered, pressure to replace old systems began,” said Rieder. “New systems need to be able to provide a top customer experience on a digital platform and capture more information. Companies are trying to delve more into these areas."
When insurers do get tech talent in the door, they tend to be focused more on data security and app development in recent years.
“What’s driving these apps is companies feel the need to interact with four generations of customers,” he says. “They have to connect with people via Internet, phone call, and mobile applications. Some clients even prefer to report a claim on Twitter.”
