Why the Insurance Industry Needs to Win the War for AI Talent

The uncomfortable truth is that most insurers are still struggling to hire top tier AI talent, let alone retain it.

We need to get real here: AI isn’t on the horizon anymore – it’s embedded in every part of the insurance value chain. From elements like fraud detection and policy underwriting to automating claims and modelling climate risks, AI is here to stay. It’s also moving fast.

The uncomfortable truth is that most insurers are still struggling to hire top tier AI talent, let alone retain it. Even when they do manage to bring someone on board, they aren’t quite sure what to do with them.

It’s not because there’s a lack of interest though. The industry is trying to play a whole new game using an old rulebook. It’s a case of living up to “detect and repair” instead of transitioning to “predict and prevent”.

The Stakes Are Already High

AI has so gradually infiltrated every aspect of our lives that we’ve pretty much blinked and missed it. It’s no longer a nice-to-have, but a competitive advantage. In fact, within the next five years, it could be the most critical differentiator for insurers looking to stay relevant and profitable.

The implementations are wide and varied, with the possibilities of:

• Dynamic pricing that adapts in real time
• Fraud detection that improves with every claim
• Hyper-personalised customer journeys that are built on intelligent automation

But you can’t get any of this without the right people. And the right people aren’t exactly lining up at the doors of traditional insurers who are still playing by the book.

So why is it so hard for insurers to attract AI talent?

For one, the insurance sector suffers from a brand image problem. 8 in 10 millennials have limited knowledge of employment opportunities within insurance, and 60% would go so far as to consider the industry boring. Most AI engineers are thinking about how to build the next generative AI breakthrough, not optimising insurance risk.

AI professionals also thrive in fast-moving environments that are product led. So in a world of legacy systems and waterfall delivery models, the talent that’s needed is looking elsewhere. Simply put, your next hire won’t necessarily have the required industry experience.

Perhaps the main problem with drawing AI talent to insurance is that without a clear AI strategy, it’s basically impossible to sell the vision. It’s a hard sell to candidates used to purpose-led roadmaps and rapid deployment cycles.

And this isn’t even considering current tech stacks either. If your core systems predate the iPhone or your data is scattered across silos, the idealistic world of cutting edge innovation isn’t appearing before any candidate’s eyes.

“CEOs recognise that AI and Generative AI are technologies with huge potential for their business, because they touch on so many core aspects of what insurers do.”

Simona Scattaglia, KPMG Global Insurance Technology Lead and Partner

While CEOs are aware of the benefits of AI for their insurance business, they’re also acutely aware of the barriers. It’s not just a shortage of talent that’s keeping them from their greatness, as ethical challenges and a lack of regulation is the biggest hurdle for 52%.

It’s more a case that suitable frameworks need to be in place that are proportional to the risks. Because regulation shouldn’t stifle innovation, but safeguard usage.

Why Insurers Should Fight to Appeal to AI Professionals

Forward thinking insurers are already putting in the hours to become more attractive to relevant talent. And while 51% of UK brokers felt young people do not have the experience needed for roles in the sector, it’s worth looking outside the industry to close the talent gap.

Because the reasons to invest in AI talent are worth the effort.

Think of your datasets like goldmines. AI thrives on data, so if your company is sitting on decades of rich, underutilised insights waiting to be activated, then you’ve already got a massive head start.

Also, AI professionals want to solve real problems. The ones that will make a genuine difference. If insurers can find a way to harness that desire, then they’re onto a winning strategy.

These AI developers bring way more than code to the table. They also bring product thinking, commercial awareness and strategic oversight. The sort of traits you don’t find in every tech hire. These are the problem solving capabilities of the future.

Even a single exceptional AI candidate can drive massive ROI. Consider the cost savings, improved pricing models, reduced churn and faster, smarter decision making.

How Do We Get There?

Ultimately, if insurers want to win the AI talent war, they’ll need to rethink their entire approach. All sectors are thinking of ways to become attractive to AI talent, so you can’t risk falling behind.

Here’s what I suggest:

• Fix your employer value proposition
• Give them something real to build
• Integrate instead of isolate
• Modernise your tech stack
• Pay them well

Simply put, insurers need a seismic shift beyond managing risks to creating impact. If the narrative shifts to rebuilding communities after floods, improving health outcomes or closing financial gaps, suddenly there’s a lot more of an appeal to these problem solving professionals.

By giving them something real to build, you’re providing ownership and direction. Your top talent isn’t going to be sitting in a corner writing proof of concepts on papers that aren’t going to lead anywhere (as has been the case in recent years).

This integration is important too because AI can’t thrive in a vacuum. Integrated teams, from engineers and underwriters to data scientists and actuaries, keeps everything working in sync.

At the same time, you’ll need to modernise your tech stack. You’re not expected to be Google, but if your engineers are still wrestling with green screens, it’s time to invest in cloud infrastructure, clean data and scalable architecture. You don’t want your talent to leave simply because your tech is holding back AI implementation.

And finally, pay these professionals properly. Yes, top AI talent is expensive, but the cost of not hiring them (or losing them to competition) is much worse.

It’s essentially a case of getting bold or getting left behind.

The foundation for the next decade of insurance innovation is here, so can you afford to lose out as the industry shifts?

AI talent is quickly becoming mission-critical rather than an optional nice-to-have skillset. The insurers who get this right won’t just survive the coming wave of disruption, they’ll be leading it.

If the bold actors can build the right teams and modernise things from the inside out, maybe insurance could earn its place as one of the coolest industries to work in, driving young people towards careers that they don’t find boring.

Need help building an AI-capable team that actually delivers? Start with the right people. I can help with that, before your competitors beat you to it.