As a younger generation tries to fill the gaps in the employment arena, the insurance veterans of today are retiring and taking their wisdom with them.
It’s an insurance knowledge brain drain. As baby-boomer generation insurance experts retire, their insights and perspectives born of years of experience are leaving the market with them.
The insurance industry is being particularly hard hit and the drain on intellectual capacity in underwriting expertise will be ongoing and increasingly impactful with the passage of time.
Losing expertise at a rapid rate
The drain is well-documented, and according to the U.S. Bureau of Labor Statistics, the total number of insurance professionals 55 years of age and older has increased more than 70 percent in the last ten years. BLS stats also predict that by 2018, fully one-quarter of insurance industry professionals will be five to ten years away from retirement.
The question now becomes a matter of predicting whether or not insurtech and data-mining advances will be able to make up for the loss of hard-won know-how. As individuals leave the insurance workforce, will their accumulated knowledge and expertise simply disappear from the radar?
As younger and less experienced staff take on a growing level of responsibility – and in a brutally competitive market – will this next generation be capable of taking up the slack? It’s a watershed moment in the industry and a glaring opportunity for savvy players. Some are concerned that the ability to monetize ever expanding mounds of data captured by new technologies could go begging.
Is it possible to replace years of experience and the understanding built up over years of work in the trenches with technological advances?
One relatively current example is the retirement of Chubb Ltd.’s North America division chairman Robert C. Cox. The director of financial lines retired after 35 years with the company, and he was replaced by Scott A. Meyer, the former division president of the North America professional lines.
Cox joined Chubb as an underwriter back in 1981, and since that time, he held a variety of management positions which included serving as executive vice president of Chubb & Son and chief operating officer of Chubb Specialty Insurance.
“Bob’s career at Chubb represents a remarkable journey that has seen Chubb’s prominence in the professional and management liability space steadily rise,” says John Lupica, vice chairman of Chubb and president of North America major accounts and specialty insurance. “Over the course of three decades in the business, Bob has built relationships and a level of expertise that has proven invaluable for our clients and his colleagues.”
Most pundits say the baby boom began in 1946 and ran on until 1964, and the number of births during this period reached more than 76 million. It’s had an enormous impact on the U.S. economy over these last 50 years. During the late 1970’s when most baby-boomers were 15 to 32 years old, their numbers represented approximately 45 percent of the total labor force. As a result, the percentage of workers 45 years and older increased from 33 percent of the labor force in 1998 to 40 percent in 2008.
While most surveys reveal that baby boomers plan to remain in the workplace as they – reach – or pass – traditional retirement age, the blend of older employees and younger supervisors has resulted in occasional cultural and managerial clashes in workplaces.
Companies are now paying close attention to preparing how to maximize the knowledge, experience and business acumen of their more seasoned staffers.
“What’s concerning here is that quite literally the future leadership at some critical global organizations is at risk,” says Emily He, chief marketing officer at Double Dutch. “There’s more at play than the retirement of Baby Boomers. The fundamental approaches businesses take to find, develop and inspire leaders at all levels need to change.”