As we have reported before, the number of people leaving the insurance industry will drastically outweigh the number entering in the coming years. Indeed, the Canadian property and casualty industry faces an age gap that will leave insurance companies facing growth challenges in coming years.
Some regions are more affected than others. Atlantic Canada and Saskatchewan are suffering an aging workforce, according to the Insurance Institute of Canada. In its recent Demographics of the P&C Insurance Industry in Canada report, the Institute said 37% of the insurance workforce in Saskatchewan will retire by 2027.
In Atlantic Canada, only 12% of the insurance industry’s workforce are aged under 30. The report says this gap suggests those regions will struggle for industry growth in the years to come.
“Examining the inflow of young workers relative to the outflow of older workers in these regions suggests that they are set to face greater challenges relative to other regions in replenishing their future workforce,” the report said. “Indeed, while the overall industry employs 10 workers under the age of 30 for every 10 employees aged 55 or older, the ratio is 7 to 10 in these regions.”
It is not necessarily a situation where young people are not attracted to insurance, there is evidence to suggest they are. However, it is an industry that retains employees, which is why there is a high volume of retiree age people in the workforce. This was emphasized in 2017 when only three people under the age of 25 were recruited for every 10 employees aged 55 and older.
It seems companies value experience, with 30% of the current insurance industry workforce over the age of 50.
“As the retirements in the boomer cohort accelerate, the P&C insurance industry will be confronted with a tightening Canadian labour market over the coming years,” the institute wrote in the report. “As a result, competition for labour will be heightened, something that will make recruitment increasingly challenging. This, in turn, has the potential to impede any given organization’s capacity to grow its business.”
“Based on this adjusted ratio, the industry employed 16 workers under the age of 30 for every 10 employees aged 55 or older in 2007,” the institute’s report said. “Since then, however, the industry has seen its adjusted entry-to-exit ratio weaken considerably. Currently, the industry has 10 workers under 30 for every 10 employees aged 55 or older who could retire. This development, much of which can be traced back to the aging of the industry’s workforce, is concerning insofar as it suggests the industry will be challenged in maintaining, let alone growing, its workforce in the future.”