While insurance companies react to evolving consumer expectations and emerging technologies like AI, they are also facing major workforce issues.
During the pandemic, it wasn’t uncommon for many senior executives to leave the job market entirely, and, according to Workday, 50% of the current insurance workforce is expected to retire by 2036. This leaves insurance companies with a major talent gap, but, also, an opportunity to diversify the workforce to meet the needs of the evolving industry.
Access to diverse global talent can significantly enhance their business operations, while creating opportunities to expand into new markets. Forward-thinking insurance companies recognize these dual benefits.
Here are four key strategies insurance companies should consider when expanding into international markets:
Collaborate with local agencies
The insurance industry is complex, so collaborating with local agencies is a crucial step in selecting a new location. Many countries have incentives for companies that are looking to grow and develop their workforce. Partnering with a foreign direct investment agency can provide access to talent development programs that foster skills critical to new technology objectives.
For example, Ireland’s foreign direct investment agency has partnered with Skillnet, Ireland’s national talent development agency, to develop a strategic talent development program, accredited by the Graduate Business School at Technological University Dublin, that companies can leverage when establishing local operations. Many countries also provide significant funding to local universities and research centers to provide new businesses with access to research and development capabilities.
Partnership opportunities are critical to successful foreign direct investment. These agencies are experts in industry, local government and business. Working with them will help insurance companies understand how pre-existing programs can support their businesses’ long-term goals.
See also: The Next Generation of Talent
Evaluate the local technology community
Insurance companies ready to seize the opportunities that digitalization presents need access to two types of talent: one group with traditional industry experience and, a second with advanced technology expertise. Together, they can develop the insurance products and processes that consumers are looking for.
Companies looking to grow their technology expertise should look for locations with a heavy technology presence. Ireland, for example, is home to 16 of the top global tech companies and the top three enterprise software providers. In collaboration with local universities, these companies have created one of the strongest talent pipelines for software development, AI, engineering and cloud computing in Europe.
Tapping into this pool of talent can look different for every company. For example, Marsh McLennan, one of whose businesses is Marsh, a leading global insurance broker, created an innovation center in Dublin in 2015 to leverage the Irish tech talent ecosystem. Now, the center is conducting large-scale generative AI research to inform new products and solutions.
It may seem unconventional to invest in new locations that are heavily occupied by technology enterprises, but those companies create unparalleled access to talent. Every industry is looking to grow their technology expertise, so to compete, insurance companies and brokers need to have a presence in the community.
Consider national business objectives
Geopolitical conflict, disruptions to trade and the evolving regulatory environment have made the global business landscape more complex. When evaluating locations for investment, insurance companies should prioritize opportunities that support both talent and business needs. Many cities around the world have large talent pools ripe for the insurance industry, but only some provide the financial benefits that will be significant once operations are established.
Tax agreements, regulatory commitments and investment opportunities are just a few examples of how countries are providing incentives to new business. Understanding which incentives align with business objectives will be key for insurance companies to find the right fit.
For insurance companies prioritizing R&D, look for locations that are investing in education programs and research facilities. For those interested in access to new markets, consider locations that have strong business relationships with other neighboring countries. The EU, for example, requires companies to have physical operations within one of their member countries to gain access to the market. Understanding these market complexities will help insurance companies make the right choice, not only for their talent objectives but also for their bottom line.
See also: How to Captivate the Next Wave of Underwriters
Think holistically
The insurance industry is at a turning point, and accessing diverse, skilled technological expertise will be key to staying ahead of the competition. Investing in new markets can be risky, especially for historically conservative insurance companies, but by partnering with local agencies to strategically evaluate local talent, partnership and financial opportunities, they can make a confident, data-driven decision.
Realistically, talent alone may never be enough to sell many companies on foreign investment. But those that forgo the talent and financial incentives that new markets provide will fall behind as their competitors modernize.
