Are Apprenticeships in Insurance Extinct?

Replacing retiring knowledge workers will require upgrading dated technologies to attract modern skills and the loyalty inherent in apprenticeships.

Attracting young, talented workers seems to be one of the single greatest challenges facing the insurance industry. There are several reasons for this, chief among them the retirement of the career-oriented baby boomers, because they are taking their institutional knowledge of processes and systems with them. That institutional knowledge resident in each baby boomer is critical and has its roots in the days of apprenticeships, which is defined as “a system of training a new generation of practitioners of a trade or profession with on-the-job training and often some accompanying study.” Unlike an internship, in which the job candidate received work experience for a limited period, being an apprentice meant you committed your career to a particular industry. See also: ‘Jobsolescence’: How Big a Threat?  We know that young people don’t consider insurance a high-powered, exciting industry; rather, many see the industry as risk-averse, stuck in its stodgy ways and afraid to upgrade processes and technology. Perhaps the only exception to this is in the insurtech world, where startups are disrupting the status quo and larger insurers are starting to pay attention. When we look at internal responses (people/systems) to external changes (insurtech/other efficient technologies) among smaller insurers, however, the value of the retiring knowledge worker seems even more critical. This is especially true with insurers that have been clinging to their legacy core systems and are now in a scramble to put new business plans and processes together that will help support the technology required to remain competitive. So, why are smaller insurers more hesitant to embrace modern technologies? Think.Shift Chairman Balaji Krishnamurthy says smaller insurers, municipal risk pools, captives and self-insured groups are timid to adopt new technology because they fall prey to what he calls “the law of inertia,” which states that people tend to endure the pain of the present rather than risk enacting change. “Having lived with the pain of the present (spreadsheets, home-grown databases or software), they fear the certain pain of the change (moving to new technology with considerable unknown attached to it), even when they know that doing so might put them in a better position for the future,” he says. I can tell you first-hand that the future for young professionals does not include working on outdated systems. It does include working for a vibrant, forward-thinking industry that views enabling technologies as a priority. The industry at large is trying to do its part: February is now the official “Insurance Career Month”; the Insurance Risk Management Institute produced a YouTube video called "Why an Insurance Career"; and more than 850 organizations have joined forces to promote, which is designed to inspire young people considering work in the industry. See also: Beat Brain Drain: Boost Your Talent Pool   So, my suggestion is that as your baby-boomer workers continue to plan for their own retirement, avoid the law of inertia and start making your own plans to upgrade your technologies to match the needs and skills of a new workforce. If you do, your new technology will foster superior opportunities for your company and workers; and you’ll enjoy the same sort of security of having institutional knowledge and the long-term loyalty inherent in apprenticeships.

Jim Leftwich

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Jim Leftwich

Jim Leftwich has more than 30 years of leadership experience in risk management and insurance. In 2010, he founded CHSI Technologies, which offers SaaS enterprise management software for small insurance operations and government risk pools.


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