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Apr 2024

Jobs for life

Source: Asia Insurance Review | Feb 2024

With the great change that constantly sweeps through the financial services world – uncertain interest rates one minute, generative AI the next – it can be easy to overlook the effect such a dynamic environment has on human resources.
Last year seems to have been one of the worst on record in terms of human resources within the banking industry, for instance – with one estimate putting the total loss of jobs at around 60,000 people worldwide.
In part this reflects the slow-motion reset that has been happening since COVID with the increasing prevalence of work from home. In part it is because of the increasingly pervasive nature of technology to be able to take over the tasks that were once considered to be the sole domain of ‘experienced staff’.
In part it is simply about M&A – something that the insurance sector is also seeing.
While the decline in bank staff numbers is not directly reflected in the insurance industry, many of the same dynamics are at play. And it would be easy to overlook the fact that while many of the 60,000 bank staff will be looking at a ‘sea change’ and move out of the financial services realm altogether, there are many who will be looking closer to home and wondering whether a career in insurance might not be where their future lies.
As with every sociological shift, this can be considered both a good thing and a bad thing – but such increased competition is unlikely to be reflected in higher salaries, especially for new entrants – which could be most challenging in a period of uncertain inflation.
For Asian markets, which are still considered to be the growth engine of the insurance sector, it is possible that the vast untapped potential of closing any number of protection gaps will outweigh everything else. Every country still has a long, long way to go.
The worry is that these protection gaps will be closed in large part by chatbots, generative AI and other ‘pseudo people’ rather than real flesh and blood human beings. That seems to be the promise of the new technology.
One of the common themes that runs through discussions of the protection gap is the ‘trust deficit’. The question we need to be asking is whether people will be more or less likely to trust a pseudo person when it comes to buying protection?
Time will tell, but it would be rash to write off the importance of ‘the human touch’ when selling complex financial services. Talk to any number of agents on the life side of the business – or brokers on the P&C side – and you will hear about the importance of ‘knowing your customer’, empathy and other human characteristics.
Insurance is fundamentally a people business and this could go some way to preserving staffing numbers, at least for a while.
But the real boon might be for the insurance education and training sectors. The region already has some world-class players in this field – and it is clear that the sector needs more good people. If insurers are to see an influx of enquiries from disenchanted former bankers, it might be as well to be prepared to receive them.
Paul McNamara
Editorial director
Asia Insurance Review
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