Understaffing on underwriting teams is becoming an area of concern for insurance companies, according to the Convr Inaugural Insurance Talent & Technology Trends survey. Over 44% of insurance underwriting leaders admit their teams are definitely understaffed, and an additional 19% admit that they probably lack the appropriate manpower for their underwriting needs.

Unfortunately, 44% of respondents say that understaffing leads to inaccurate quotes “very frequently" or “somewhat frequently." Additionally, nearly half (48%) say it definitely or probably negatively affects expense ratios. Further, staffing shortages may continue to be an issue—just 39% of underwriting leaders confident that they will meet their 2023 hiring quotas.

When asked why underwriting teams are understaffed, respondents were divided almost equally. Some of the top reasons listed were the relatively greater appeal of other industries, the lack of remote work opportunities, high-volume workloads and poor work-life balance. Each variable listed in the survey question constituted around 6-10% of the responses, illustrating the growing complexity of fulfilling employee needs.

The survey revealed several key reasons for the current gap between operational needs and talent acquisition:

1) Insurance companies are struggling to recruit and retain younger generation employees. Insurance companies could be challenged in the coming year due to difficulty filling the talent pipeline with the next generation of workers. The 21-30-year-old age group is the most difficult to both recruit and retain in underwriting positions, according to the survey, with 47% of respondents saying the age group was the hardest to recruit and 40% listing it as the hardest to retain. Nearly 30% said that entry and associate levels were the hardest underwriting positions to fill.

2) New hires are insistent upon remote work opportunities. In the wake of the pandemic, companies are noting demand for remote-only options from new underwriting hires, now conditioned to operate with full flexibility. Nearly every industry has seen an uprise in remote work options for new hires. However, 64% of underwriting executives agree or strongly agree that the demand for remote-only work has increased employee attrition.

The bottom line is that workers in post-pandemic America have begun to prioritize their time and endeavors away from work, and employers must adjust accordingly.

3) Technology in the insurance sector needs updating. Appealing to Generation Z and millennial workers could be made easier with improvements to industry technology. Almost 87% of respondents agreed or strongly agreed that the younger talent pool is attracted to updated digital technology solutions and tools. Manual underwriting is tedious, according to insurance leaders, which turns workers away. Implementing enabling technology could make marked improvements to the efficiency and morale of underwriting teams.

“To truly transform commercial underwriting, insurance organizations have to adapt to the changing demands and expectations of their target workforce," said John Stammen, Convr CEO. “In our newly completed survey, we learn that insurance executives know their companies' shortcomings with technology and talent yet are not transforming at a rate that can support profitable growth."

When asked what slows down underwriting the most at their companies, executives said understaffing was the top reason, followed closely by outdated technology and manual data entry. While industry heads make efforts to modernize and improve their technology, training and benefits, as well as permanently transition to remote operations, the long-term outlook for talent acquisition may need to be met with a more drastic approach, such as artificial intelligence (AI).

When asked what percentage of underwriting tasks could be automated, the group of respondents' answers averaged 47%.

Ann Seaberg is an IA contributor.