Young Voices Reflect on Industry Talent Crisis

It’s no mystery: The insurance industry is experiencing a monumental shift.

In June 2021, the U.S. Chamber of Commerce issued a report citing U.S. Bureau of Labor Statistics numbers forecasting that over the next 15 years, 50% of the current insurance workforce will retire, leaving more than 400,000 open positions unfilled.

That report shared how all “facets of the insurance industry will struggle to replace these workers at every level, particularly because millennials have not shown significant interest in insurance careers – less than 25% of the industry is under 35.”

A talent crisis has emerged. One insurance expert envisions the phenomenon as more of a “talent cliff.”

“I use the term cliff to emphasize the severity of this problem,” said Dr. Brenda Wells, a distinguished risk management and insurance program director and professor at the East Carolina University College of Business. “Because we are just not replacing people fast enough.”

The insurance industry — like a lot of industries — is desperate for good, hard-working talent. College students don’t initially look to insurance, though, when charting their career paths. And the industry has long been marred by a negative image that Wells said hadn’t been taken seriously until recently.

“In the time that I’ve been in the industry, I’ve never seen it like it is now,” said Wells, who has 35 years of experience in insurance academia. “I have never seen employers so desperate for good talent.”

Younger Generation

But what about the young folks who are part of the industry? What brought them to insurance — and perhaps more importantly, why have they stuck around? Could their experiences and perspectives hold the answer to talent attraction and retention?

Lacey Garrison Strom, EVP and director of private client practice at Heffernan Insurance Brokers in California, took a job as a State Farm receptionist in 2001 at 18. She was required to meet her agent when she signed her first auto insurance policy. She was not required to work for the company while she studied to be an artist.

But she did, and that job led to what has become a nearly 22-year insurance career.

“I just really enjoyed the human interaction,” Strom, 39, reflected. “The human element of it.”

Six months into her time at State Farm, she was licensed and began selling insurance. In the two decades since, Strom has worked at Personal Lines Insurance Brokers Inc., and Heffernan. Her work is gratifying, and she loves the appreciation she receives from her clients.

“There’s so much human element to it,” Strom said.

“And insurance does seem very bland on the outside. But when you really start digging into it, you realize how critical it is to our communities, our country (and) our economy. There’s all kinds of different avenues you can take with insurance.”

Wells is all too familiar with this misconception by industry outsiders. Most everyone who works in insurance understands the industry is inextricably tied to protecting against risk and nurturing people and communities. But those on the outside don’t always see it that way.

“Our industry does a horrible job of public relations,” Wells explained. “Most of the insurance commercials that you see on TV make fun of us.”

Many of her colleagues believe those commercials hurt efforts to bring students into the industry. Wells admitted that while some of the industry’s TV advertisements may be cute, “nobody is emphasizing what we do to help people in terms of a career,” she noted.

“And this generation wants fulfilling work,” she continued. “My generation wanted $60,000 a year and a BMW. And I see these students now, they want to give back to the community. They want to be involved in community service. They want to have the meaning to their work. And insurance definitely provides that. But we’re not doing a good job of telling our story.”

Working in the industry has taught Strom patience, empathy and active listening skills. She believes as the industry moves forward, it will be important to listen to more than just clients. Listening to the youngest members of the insurance workforce will be important, too.

“I think it’s really important that we hear this next generation,” Strom explained. “And also ask them what they need. I think, so frequently, we like to tell people what they need. But to my point about listening to our clients — we need to listen to this next generation. And hear what they’re looking for. Maybe we can’t give them exactly what they’re looking for. But we can certainly make tweaks to make this a more desirable industry for them.”

Lifestyle Choices

Mike Federspiel’s journey to his desk at Energy Insurance in Kentucky followed a unique path. His father sold health and life insurance, and the younger Federspiel worked for three years in the industry before pursuing a career in law enforcement. He was good at his job — ascending through the ranks to a detective position.

But his priorities in life began to change. He married and began thinking about his future. The demands of the police schedule and everything that comes with that world didn’t align with his family goals. So, he walked away from law enforcement, and he has worked as a personal lines agent at Energy Insurance for nearly two years.

“It was, ‘Hey, I want to be able to go out and make the money that I want to make by the effort that I put into it,'” Federspiel, 31, recalled. “‘And I also want to be able to be there for my family. I want to be there for Christmas. I want to be able to go on vacations with them. I want to be able to do all that. So, I started thinking about what I wanted with my family long-term. And insurance is kind of what I could see … would provide that lifestyle for me.”

Many outsiders are familiar with insurance companies’ slogans and promises of quickness. Federspiel’s love for his work is tied to relationship building, helping clients fill gaps in coverage and educating them along the way. As he’s grown, he has appreciated being able to be a calming voice for people on their worst days.

“I think being able to get out to younger people that, hey, you can control your career, you can still go after things that you enjoy, but you just become a specialist in it,” Federspiel said. “It’s not limited to just home and auto and just the generic quick things you see on the internet or on TV. You’ve got to think broadly. Architects need insurance. Construction companies need insurance. So, just being able to find your market and be able to really focus on that area.”

Opportunity

Bridget Brundige, an account executive at LP Insurance, believes that if more younger people knew about the variety of the work — and insurance industry work in general — they would be more likely to pursue a career in the industry. Graduates often home-in on the tech industry because it is cool. Insurance, on the other hand, doesn’t carry that same connotation.

She recognizes that most of the time people use their benefits it’s because something bad has happened to them. She sees the value in being able to be the resource to help them understand complex information. She also sees the importance of helping employers save money and retain talent. This mix keeps her work enjoyable.

“There’s all kinds of opportunities within the industry, I think,” she said. “It’s just, how do you get that message out?”

Courtney Pino, a 33-year-old employee benefits consultant at LP, pointed to the value of highlighting the modernization of the benefits process with technology. Twenty-five-year-old Brianna Budd, a benefits consultant at Energy Insurance, spoke of the importance of insurance education for all ages. Jared Rossi, a 38-year-old commercial lines broker at LP, sees the importance of showing the relationship-building aspects of the industry to young people.

Wells isn’t sure what the answer is to the crisis. She has seen promising ingenuity from organizations, including big signing bonuses and offering pet insurance or repaying student loans. That is a change from the past, according to Wells, who said the insurance industry has not been as generous with offering such employee benefits in the past. “I’m seeing a lot of creativity coming out of the insurance business, which I like,” she said.

She also believes producing better industry recruiting materials is necessary. Showing students what they will get out of a career in insurance is important. And while the industry has made strides to increase diversity, the insurance workforce is still primarily white and male, according to Wells.

According to The U.S. Bureau of Labor Statistics (BLS), about 50% of all classified insurance agents are women; 11.8% of insurance agents are Black or African-American, 4.1% are Asian, and 16.5% are Hispanic.

On average, gender equality is better across the insurance industry than in other fields in North America but racial diversity is less prevalent in higher level positions such as the vice president and C-suite level, according to a 2022 study by McKinsey & Company. Only one in 25 direct reports to CEOs in insurance is a woman of color, the study showed.

“When people look at an industry, they want to see themselves in it,” Wells said. “And we’re improving in that front. We have a lot more diversity in the industry than we did when I got out of school. And the industry is to be commended for that. But we’re still not showing these young people what we offer them and why they should choose us.”

Many industries had baby boomers who aged in place over the past couple of decades and are now retiring en masse. That had a lot to do with the COVID-19 pandemic but the industry’s talent crunch was already an issue even prior to 2020, according to Bob Hartwig, director of the University of South Carolina’s Darla Moore School of Business’ Center for Risk and Uncertainty Management.

The acceleration of retirements and early retirements due to the pandemic, however, has exacerbated the problem for the industry.

“The competition for the talent that insurers and brokers and agents want is actually more intense than they realize,” Hartwig explained. “With much of the competition coming from not their competitors, but from other industries entirely. And so that means making yourself … familiar early and often to students. And you want to be in the right place at the right time, so that when they’re making that critical decision about their career, that you’re able to be there and make an attractive offer to them.”