ICA unveils roadmap to temper skills and talent shortage in insurance sector

Nine in 10 insurance employers struggled to find skilled staff last year.

The Insurance Council of Australia (ICA) highlighted several strategic challenges facing the Australian insurance sector workforce, driven by structural forces expected to intensify over time.

One of the key issues is the talent and skills shortage, with businesses across Australia experiencing the most severe shortages in decades. Factors such as demographic trends, the lingering effects of the pandemic, skills gaps, and declining labour market mobility are exacerbating this issue. 

A 2023 survey by Hays revealed that 90% of insurance employers struggled to find skilled staff, particularly in areas like liability claims, workers' compensation, and underwriting.

Climate change is another major factor, as extreme weather events are becoming more frequent and severe. The floods of 2022, for instance, resulted in at least $7.17b in insured losses from over 300,000 claims. 

An ICA review suggested that insurers should adapt their workforce planning to develop a more flexible and scalable workforce capable of handling increased claims activity during natural disasters.

The insurance sector is also grappling with an ageing workforce. Nearly 30% of employees in the industry are set to reach or exceed retirement age by 2030, a much higher proportion compared to the general workforce. 

The ICA stressed the need for greater diversity, equity, and inclusion (DEI) to attract a broader talent pool and foster innovative thinking. 

The goal is for the insurance industry to be an employer of choice for DEI by 2030, reflecting the diversity of its customer base and communities. 

To achieve this, the ICA's roadmap focuses on strategies to attract, nurture, and retain a diverse workforce, promote the industry as a desirable career choice, and build a flexible workforce ready to meet future challenges.

“The Insurance Council has identified a program of short, medium and long-term strategies to help members attract skilled professionals, encourage past employees to return, and retain a diverse and talented workforce, whilst promoting our sector’s reputation as a leader in DEI and talent management,” it stated in its The Insurance Industry Talent Roadmap.