The captive insurance industry must evolve and do more to attract younger talent in order to circumvent a void as its working population retires
As an ageing population leaves vacancies aplenty in the captive insurance industry, insurance leaders are seeking creative ways to solve what some have dubbed a “talent crisis”.
It is widely recognised within the industry that talent acquisition and retention has been a historical issue in the captive insurance industry, owing largely to lack of firm educational initiatives in the sector. This reality has changed dramatically in recent years, with the launch of a number of educational and networking initiatives, such as the Captive Insurance Companies Association’s (CICA) NEXTGen initiative and the Alabama Captive Insurance Association’s Risky Business internship.
On top of this, the COVID-19 pandemic has changed the way young people are thinking about work. A lot of workers are now preferring to work from home and many companies, not just limited to captive insurance, will struggle to attract talent unless they change their attitude to the new work-life balance.
A crisis of talent or competition?
So how much of this is really a talent ‘crisis’ or ‘drought’? Or is it rather the case that the captive insurance industry needs to do more to attract the young talent that surely exists? Nick Hentges, CEO of Captive Resources, says yes.
“I disagree with the premise that there is a talent drought,” he says. “The captive industry needs to do a better job of marketing itself and competing for the best talent. If you have a good product or service and build a great culture, you will attract talent.”
Hentges says that Captive Resources spends a “tremendous” amount of time planning for transition well in advance — attracting, hiring, and training new talent. Importantly, Hentges says that the company provides new talent with opportunities to develop, grow, and evolve.
“The best way to not have a hiring crisis is by keeping the colleagues you have hired happy, challenged and fulfilled.”
Hentges recognises the challenges of the industry’s ageing population and the gap it is leaving in the sector, but argues that the same opportunities exist in captive insurance as in the broader insurance industry, including careers in finance, accounting, claims, underwriting and management. The only difference is the operating model.
“If we can put the captive model on display, so to speak, and educate young professionals about its more exciting aspects, especially how it benefits insureds, I believe that would be very enticing,” he suggests.
“I have always said that captive insurance is a better mousetrap, and finding and utilising a better way is always an interesting concept that will pique interest.”
Attracting talent
But what initiatives exist for young professionals in the insurance industry and how can captive insurance companies take advantage of these to bolster their talent pools? Hentges, who also serves as vice-chair of the board for CICA, says there is ongoing work in these areas, for example CICA’s NEXTGen and Amplify Women initiatives.
NEXTGen is an initiative aimed at providing more value for CICA members and developing the next generation of captive insurance professionals. The initiative was launched in 2019 with the purpose of bringing young and new professionals into the industry and giving them a seat at the table. In doing so, CICA hopes to create further education and networking opportunities for young professionals looking to progress their careers.
Dan Towle, president of CICA and a titan advocate for the next generation of captive insurance talent, says the association has “elevated the talent conversation to new heights,” and, as a result, the industry is seeing a “positive impact.”
“A few years ago, you did not have panels or events focused on talent development at industry conferences,” Towle sets out. “Now we are seeing sessions focusing on young professionals at conferences across the industry.”
He adds: “We are fortunate to have many talented young professionals in the captive insurance industry, we just need more of them.”
Towle says that new talent is particularly important to support the growth of captive insurance, citing studies such as the quarterly Insurance Labor Market Study, which shows that 68 per cent of insurance companies plan to increase staff during the next 12 months. He asserts: “We know all sectors, including captive insurance, are growing and looking for new talent.”
“I am grateful that many of our association partners have welcomed CICA and members of our NEXTGen Committee to speak and host events at many of their conferences. We are a better industry by putting this focus on developing the next generation of captive professionals.”
Hentges says that NEXTGen is giving younger insurance professionals a seat at the table, a voice on important topics. It is also a vehicle to get to know industry peers and build the personal relationships in the industry that will allow them to work together and overcome issues they will face.
Towle adds that NEXTGen is creating excitement about captive insurance. He acknowledges it is difficult to describe captive insurance in a few minutes, so young professionals need more exposure to learn — and get excited — about captive insurance and its opportunities.
He continues: “Many of CICA’s NEXTGen committee members have been speaking at universities to create awareness and share their career stories. We are starting to see the impact of programmes like our essay contest. Several of this year’s finalists are now working in the captive industry directly as a result of participating in the contest.”
“Through our NEXTGen and Amplify Women initiatives, we are providing a supportive community that participants tell us they appreciate. As a result, we hope these young professionals will become our best advocates when it comes to spreading the word about the exciting opportunities captive insurance offers — and the signs indicate it is working.”
Towle notes that CICA is hearing from NEXTGen and Amplify Women participants that the opportunities to network access the industry and to develop leadership and public speaking skills have been valuable to them and their careers. In some cases, this has even contributed to new career opportunities.
“The NEXTGen and Amplify Women committees have collaborated to host networking events at the CICA Conference and at several conferences across the industry. Again, attendance at these events is growing, as are sign-ups for the NEXTGen and Amplify Women email lists.”
He also highlights this year’s NEXTGen webinar series, which features industry-leading captive owners and service providers who talk about the challenges and opportunities of their jobs and share career advice in a small group setting. He adds: “The feedback on these sessions has been great!”
Another area that Towle notes as important is mentorship, not only so young professionals can learn from experienced professionals, “but so those of us who have been around a while can learn new ideas from younger professionals.”
Towle posits that captive insurance can provide interesting and rewarding careers with the purpose, stability, and creative problem-solving young professionals require, saying that the industry is on the “cutting-edge of risk management”. The growing application of technology in insurance and risk management requires new skills and provides new opportunities, he claims.
“By increasing awareness of the diversity of skills and experiences the captive industry needs, we hope to engage a robust pool of talent interested in the opportunities, benefits and mobility the captive insurance industry provides. As we increase awareness, we also need action.”
Shoes to fill
While there is an immense push to attract new talent into the captive insurance industry, retiring insurers also need to be aware of the legacy they are leaving behind. The vast majority of retirees will have had many years in the job, and might cover multiple unrecognised roles. They leave behind integral duties — big shoes that newcomers will need to fill.
Hentges says he hopes that the older generation of captive professionals will leave behind a legacy of moving the industry forward. He says that, before retiring, the key for his generation is “not to believe we are the only people that can accomplish positive results.” Instead, we should “pass along the knowledge gained to the next generation, and allow them to take what we have built and move it forward.”
Hentges says he meets and works with many young people in the industry and is “confident they will do great things in the future”.
Similarly, Towle says the industry’s real legacy is “the young professionals it engages, develops and mentors in the captive industry before we retire.”
“Fortunately, most well-run captives have a long-term vision for the captive. However, that does not always equate to a long-term vision for the people operating it. Depending on the size of the captive, you might have a large team, or you might only have one individual that works on it.”
He notes: “This adds a greater level of importance to bringing young professionals in and getting them up to speed, so they can take over the reins when people move on to new opportunities, or retire.”
“They will be the driving force for the next wave of innovation that will occur after our generation. They have new perspectives and fresh ideas. They will create tomorrow’s solutions for today’s problems.”
