Solving the Talent Gap in Insurance Claims: Acquiring, Retaining and Empowering Talent

The insurance industry’s ability to serve clients and maintain profitability hinges on the effectiveness of its claims management function. This is never more important than in a softening market where claims management can be a significant differentiator in attracting business. Yet, the sector faces a mounting crisis: a persistent shortage of skilled claims professionals.

Driven by an aging workforce, increasing retirements, and a lack of new entrants, this “talent gap” threatens to undermine the industry’s core promise—to support policyholders in their moments of need.

Addressing this talent problem demands a multi-faceted strategy that combines innovative recruitment, robust talent development, effective retention and the strategic use of technology.

The Talent Challenge in Claims Handling

In a 2024 survey conducted by Gracechurch in conjunction with the International Association of Claim Professionals, more than two-thirds of respondents believed that claims service is becoming more important for insurance organizations. Yet, in the same survey only one-third believed their organization was “very committed” to investing in claims talent and believed that claims talent investment loses out to other functions.

Insurers today find themselves “fishing in the same talent pool” for experienced claims professionals, leading to fierce competition for a shrinking cadre of talent. Several interrelated issues underpin this challenge.

First, the demand for skilled claims handlers far exceeds the supply, creating a seller’s market for talent. This drives up wages and puts pressure on expenses.

Second, the rapid pace of retirements among seasoned professionals is outstripping the rate at which new talent enters the industry. Often referred to as the “Great Resignation,” the mass retirement of Baby Boomers, amplified by the COVID pandemic, resulted in the industry losing valuable knowledge and experience.

Finally, while competitive compensation remains a key factor, claims professionals increasingly seek to align themselves with a meaningful corporate culture with well-established career paths, opportunities for advancement, and roles that offer growth and responsibility.

These issues are compounded by the insurance industry’s continued struggle to attract younger generations, who may see careers in other professions as more exciting and rewarding.

Building a Robust Talent Pipeline

Perhaps an obvious but effective solution is to establish a “talent incubator”— a structured program that nurtures new entrants into the claims profession. This can include graduate schemes, internships, secondments and apprenticeships. While the time and resources required to transform inexperienced trainees into seasoned claims professionals can be substantial, such programs offer several advantages. At Ascot we have had an entry level scheme in place in the claims team for several years and this strategy and investment is starting to bear fruit with trainees moving on to adjusting roles with the necessary skills to progress their careers.

Graduates and apprentices bring fresh perspectives to a rapidly evolving industry, with innovative thinking and a confidence and familiarity with digital tools and technology being used today and in the future. In developing a robust talent pipeline, a proactive approach needs to be deployed to attract talent to the claims sector. This includes appropriate career messaging and the sophisticated use of social media, as well as active recruitment at colleges and universities to introduce curious minds to insurance careers.

An incubator also creates a steady pipeline of talent, reducing the industry’s reliance on an aging cohort of experienced professionals. While developing talent internally requires time and patience, it yields professionals who are deeply aligned with the company’s values and culture.

Outsourcing as a Temporary Solution

Recognizing that a fully functioning talent pipeline will take time to develop, interim strategies need to be considered. When immediate talent shortages arise, outsourcing select claims functions or working with third-party incubators can reduce the pressure on existing teams and buy time to implement longer-term talent strategies.

Third-party providers can offer specialist skills, accelerating knowledge transfer and capability building. An incubator model can also serve as a bridge, converting temporary workers or apprentices into full-time employees over time.

Nevertheless, outsourcing is not without risk, particularly to reputation, and must be balanced with efforts to build internal expertise, ensuring that core organizational knowledge is retained and developed with a focus on the business culture and philosophy.

Ascot’s claims management model has successfully utilized a third-party claims function for handling its standard claims for over 20 years. With robust oversight and strict performance SLAs, the OSP has also been able to develop its own talent while providing a claims service that reflects Ascot’s claims philosophy. It works hand-in-glove with Ascot’s claims and underwriting teams to provide a seamless service. Over time adjusters from the OSP have become part of our claims team and promoted into senior roles.

Retention Strategies

Retention is not just about pay—it is about culture, engagement, recognition and professional development. In the Gracechurch survey, career progression, training and skills development all appeared in the top five features to attract talent.

Helping young professionals build meaningful business relationships is also a differentiator for organizations seeking to demonstrate the value placed on the claims function. For example, bringing claim professionals to client meetings or industry events builds professional networks and keeps claims professionals connected to the business. Developing relationships with clients and their representatives not only smooths the claims process at critical times but also reinforces with its claims professionals the importance of the claims function within the business.

The authenticity of a corporate culture is deeply scrutinized by both new and existing employees, and younger generations especially tend to place high value here. A sense of community that promotes collaboration, inclusivity, and a flexible, modern workplace, will likely lead to greater individual investment in the success of the business.

Tools to Attract The Modern Workforce

The integration of technology into claims management is essential for a modern and efficient operation. It can also make the profession more attractive due to streamlined operations and digital innovation. However, it also requires upskilling and ongoing adaptation. Claims professionals must be equipped with both technical expertise and digital fluency in utilizing technology to meet customer expectations.

Those starting their career as a claims professional are likely to be attracted to a business that utilizes cutting edge technology. However, many tasks being replaced by technology currently provide a “nursery” where new talent develops the foundational skills for claims handling. As AI and automation advances, it will be important to find new avenues to develop the foundational knowledge and skills of junior claims professionals.

The insurance industry’s talent shortage in claims handling is a complex, multi-layered challenge, and the pressure to deliver efficient, cost-effective, and customer-centric claims services has never been higher. However, by valuing resources, building robust talent incubators, investing in retention and development, streamlining operations through technology, and adopting flexible models such as outsourcing, the sector can build a sustainable pipeline of skilled professionals and continue to deliver on its core promise to support policyholders in times of need.

Dalton is group chief claims officer at Ascot Group. He has more than 30 years of experience managing claims. He previously worked in claims management at Markel International and Lloyd’s.