The principal fact-finding agency for the US Government in labour economics and statistics has forecast the loss of some 400,000 skilled insurance industry jobs from US markets by 2026.

The United States Bureau of Labour has pointed to an ageing workforce nearing retirement and dramatic shifts in technological and regulatory demands.

The potential for knowledge and skills gaps, educational needs to employ new technologies and the need for additional staffing puts pressure on succession planning and continuity.

Meanwhile, AM Best commentary has just noted the significant job cuts from insurance giants and slowing numbers of new hirings, what they see as cyclical unemployment.

Best’s analysts believe that AI will eventually reshape the occupations in the industry.

In its Insurance Industry Outlook titled “Skills gap in insurance industry’s ageing workforce is a growing concern”, RSM International said fostering data skills can help companies prepare workers for the future.

RSM is an assurance, tax and consulting network focused on the middle market.

Their key takeaways from the US Government report are that insurers should be proactive to fill roles for claims adjusters, underwriters and actuaries.

Also, succession planning will be crucial in ensuring a smooth transition of leadership roles.

RSM said: “Like many industries, insurance is grappling with its ageing workforce as many employees near retirement age.

“This demographic transition is happening amid a swiftly changing insurance landscape shaped by technological advancements, regulatory changes and shifting customer preferences.

“Knowledge and skills gaps, a broader talent shortage and technological adoption are all challenges facing the industry.

“Failure to address these issues could result in loss of competitive edge, operational inefficiencies, increased regulatory risks and difficulties in customer retention, jeopardising the long-term sustainability of businesses.

“It is more critical than ever before that workers in the insurance industry are proficient in data analytics, digital technologies and risk management.”

Insurance Business highlighted the growing demand for skills in data analytics, cybersecurity, and digital marketing, with data-related capabilities being especially critical.

Insurance companies are increasingly using their data to gain insights for risk assessment, fraud detection, and customer segmentation, the publication said.

It stated: “Over 50 per cent of insurance providers are actively recruiting data analytics skills, as reported by productivity software company ZipDo. This trend highlights the essential role of data analytics in adapting to the digital age, driving innovation, making informed business decisions, and enhancing customer experiences.

“However, the effectiveness of a data-driven approach depends on factors such as data quality, the suitability of models and algorithms, and the goals of specific applications.

“Inadequacies in these areas could expose companies to fraudulent claims and inaccurate risk assessments, affecting both financial performance and reputation.

“Specialised knowledge in insurance laws, compliance frameworks, and risk management practices, coupled with an understanding of data strategy, is crucial for roles like insurance underwriting and claims adjustment.

“The US Bureau of Labour Statistics anticipates a decline in these professions from 2022 to 2032 due to automation and increased efficiency.”

RSM sees these issues as a long-term problem. It says businesses face losing valuable institutional knowledge and expertise, which crucially should be transferred to the younger generation.

Failing to do so leaves insurance companies with operational inefficiencies, especially in the areas of claims adjusters, underwriters and actuaries.

The global pandemic and economic uncertainty have exacerbated these challenges, requiring even more intentional planning and adaptability.

Strategic workforce planning, upskilling and reskilling of existing employees and investing in technology are key to helping businesses adapt and drive efficiency.