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Captive Insurance Talent War

Insurance Apprentices
March 15, 2016

Five years ago, we became aware of Gad Levanon, managing director for economic outlook and labor markets at the Conference Board. You can read Mr. Levanon's blog. Over this period of time, he has become increasingly concerned with what he has termed "the coming war for talent." Put succinctly, his arguments highlight the incontrovertible demographic trends that are reshaping the labor markets. 

The baby boom generation, children born before 1965 in the United States, was followed by generation X, also known as the baby bust generation. In 2014, there were approximately 12 million more baby boomers alive in the United States than gen Xers.1 As the baby boom generation continues to age out of the work force, there are simply not enough gen Xers to fill all of the open employment opportunities. This is the dynamic that Mr. Levanon refers to when he wrote about the war for talent. Absent a massive shift in immigration rates—there were approximately 1 million new immigrants who entered the United States in 20152—there is no way to backfill this gap.

So, the question naturally follows, what are the insurance industry and, more specifically, the captive industry doing about this problem? Last week in the Captive Wire, we ran a version of a news release, which is now available on Captive.com, titled "Aon and Zurich Insurance Call for Industry-Wide Apprenticeship Initiative." US Deputy Secretary of Labor Chris Lu and leaders of Aon and Zurich made the case to senior executives from a variety of Chicago-based insurance and financial services companies about the benefits of developing an industry apprenticeship program, the news release reported.

"Our industry is facing a widening skills and training gap, so we need to be more proactive in attracting talent and guiding their development through hands on experience," said Mike Foley, chief executive officer of North America Commercial and regional chairman of North America for Zurich Insurance, as quoted in the press release. 

At Captive.com, we believe the captive insurance industry must also become much more proactive in developing new talent. Just take a look around the room at the next captive conference you attend, and you will quickly see why this is so important. The industry is populated with boomers who are nearing retirement, and we must attract and train young people to secure the future. The industry as a whole needs to improve its outreach to colleges and to ensure the alternative markets are seen as a viable employment option to the traditional markets.

One way to achieve this is to host undergraduates who are seeking risk management and related degrees at captive conferences and seminars. We should create a number of liaisons between the captive industry and various universities that offer degrees in risk management and insurance (RMI) or concentrations in risk and insurance as part of other degree programs, such as finance. We should identify and promote mentors who could assist undergraduates expressing interest in pursuing employment in the alternative markets. A prime example of such a program is a Housing Authority Insurance (HAI) Group initiative with Howard University. HAI hosts four to six Howard University RMI majors annually at the Vermont Captive Insurance Association (VCIA) conference and also encourages them to participate in International Center for Captive Insurance Education (ICCIE) courses. Captive conference sponsors would be making wise investments into their own future by setting up programs such as this to help draw young people into the industry.

Other ways to attract young people to the industry include recruiting and hiring RMI majors, developing internship programs, offering to speak to university classes about the industry, and setting up a scholarship program for RMI majors at a local university. To learn more about these approaches, and others, see the white paper titled "Solving the Insurance Industry Talent Crisis by Investing in Risk Management and Insurance Graduates" and the series of articles on "The RMI Higher Education Scene" on IRMI.com. Also, the IRMI Directory of Risk Management and Insurance Programs at U.S. Colleges and Universities can help you locate colleges and universities to support or from which you can recruit.

This industry has been remarkably successful. However, our future depends on making sure we have the necessary expertise to continue this success. We encourage all of our readers to get involved and also to offer ideas and solutions.
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1. Source: Pew Research Center, "Millennials surpass Gen Xers as the largest generation in U.S. labor force," by Richard Fry, May 11, 2015.
2.  Source: Migration Policy Institute, "Frequently Requested Statistics on Immigrants and Immigration in the United States," by Jie Zong and Jeanne Batalova, February 26, 2015.

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