With technological advances set to affect up to 45% of all work activities in the United States, professionals in the insurance industry can expect significant disruption in the way they do business, a new report from the McKinsey Global Institute finds.
According to the analysis, as many as 25% of full-time insurance positions could be consolidated or replaced in the next 10 years. The most at-risk positions include those in operations, administrative support, IT and product development, marketing and sales support.
Based on a study of Western European insurers, those in the operations space comprise 46% of the industry workforce currently – that could drop to 33% by 2025.
Similarly, administrative support is projected to fall from 18% of all insurance jobs to 10%; IT from 15% to 12; and marketing from 21% to 20%.
Insurance agents are not left out of that technological revolution. An earlier version of the analysis published in December suggests 60% of tasks currently performed by sales agents could be automated.
Claims adjusters are similarly vulnerable, as technological advances more fully keep up with customer expectations.
Advancements in risk modeling have also made underwriters vulnerable, with up to 35% of tasks capable of being done by machines. A similar report out of the University of Oxford and Deloitte showed a 66% chance of the underwriting role being consolidated.
Researchers assessed roles for how much creativity and empathy is required against the level of set-processes and algorithms that could be implemented.
“To meet these challenges, insurers will need to source, develop, and retain workers with skills in areas such as advanced analytics and agile software development; experience in emerging and web-based technologies; and the ability to translate such capabilities into customer-minded and business-relevant conclusions and results,” McKinsey said in the report.
The authors added that insurance professionals will need to “rethink their priorities right now,” including retraining and redeploying existing talent, identifying critical new skills to insource and retuning value propositions in the scramble to attract new talent.
“The first waves [of competition] are already hitting the beach,” McKinsey said.
The age of automation is upon us.