Human resources, not claims nor underwriting, has been one of the leading topics at insurance industry conferences over the past decade. As the people who built and maintained the older, still prevalent technologies are retiring and leaving the workforce, they leave behind decades of knowledge about the inner-workings of the legacy programs that support the day-to-day insurance business. One senior IT executive recently stated that their main source of finding IT talent is retirement communities, a fact that reveals the HR challenges insurance companies face today.
There’s no doubt that a massive changing of the guard is in progress in the insurance industry. The question that insurance management at all levels and in all career fields must answer is: who will replace the old work force? The short answer is “The Millennials.”
The Millennial generation, or Generation Y, is defined as those born in the 1980’s and 1990’s. More importantly, they are the generation growing up in the digital world equipped with a plethora of personal devices connecting them to the Internet at all times. There are approximately 85 million Millennials, making it the largest demographic group since the Baby Boomers. In spite of their device-driven world, Millennials are also individuals: students, parents, workers, consumers, producers, entrepreneurs and ultimately shapers of business, government and society as a whole.
As Millennials enter the workforce, employers are seeing a much different employee than they did 20 years ago. These new candidates have different ideas about work and what type of organization they want to join. To put it succinctly, Millennials want to work for a company that offers a reasonable work-life balance, is socially responsible and respectful of the environment, offers a participative management style, and provides challenging yet interesting work.
When you look at these basic “requirements” for this group, it’s easy to see the insurance industry has a lot to offer. Each facet of insurance, from life and annuities, property and casualty to health and benefits, has a compelling story to tell. The root of insurance goes back 3700 years to ancient Babylonia with the Hammurabi Code, which includes many insurance related laws. For example, if you were robbed by a thief, the “government” would provide restitutions to the victim. This demonstrates that the stabilizing effect of insurance on a functioning society has been around for a very long time.
Today, much of what insurance provides to society is not widely known. Consider this: without insurance, who could walk into a bank and borrow thousands of dollars to buy a house? Banks understand that insurance eliminates most of the risks or perils that could make repaying the loan impossible. Without insurance the bank, understanding the risks of fire, flood, windstorms and other major perils, wouldn’t provide the loan because the risks are too great. Automobiles are also a necessity that insurance covers and enables people to purchase. And to drive the car, society has deemed it essential that the car owner have certain coverage that pays for injuries the car causes to others. Overall, insurance companies provide the safety net that allows a modern society to function and to prosper.
Another major societal benefit from insurance is the massive amount of investment that is made by insurance companies in schools, state and local government and infrastructure. Insurance companies are highly regulated, especially in how reserves are invested. The majority of money that is invested by insurance companies is in fixed income or bonds. The bonds that are bought by insurance companies fund new schools, water works, sewer systems, parks, hospitals, public safety, streets and highways and government buildings. The insurance industry owns billions of dollars in the things that make our communities what they are.
The insurance industry is one of the most socially responsible aspects of our economy. Insurance doesn’t pollute, instead providing money to clean up pollution when it occurs; it doesn’t own hospitals, but it provides money in the event a policyholder requires medical treatment; it offers income to workers who are injured on the job and manages risk so businesses can operate safely.
Insurance companies must take a long look at the benefits the industry brings to society and convey those benefits to the Millennial generation. If a Millennial wants to have a career in an industry that is challenging, delivers work-life balance, is dynamic in function, and provides incalculable benefits to society, insurance is the place to be.