- Insurance executives are mostly focused on workforce transformation, return-to-office, optimizing real estate portfolios and sustainability, according to JLL’s 2023 Insurance Forum.
- The forum, which took place Sept. 19 in New York City, brought together insurance executives to share best practices and trends currently shaping the insurance industry.
- JLL said foreboding labor issues are prompting AI investments in the sector, with leadership teams also prioritizing strategic space planning and net-zero agendas.
The U.S. Bureau of Labor Statistics estimates that by 2036, 50% of the insurance workforce will have retired. This “talent cliff” highlights the need to create compelling workplaces, which appeal to younger talent and create a “greater sense of purpose in our communities,” JLL said in a release on the forum. Echoing this sentiment, a 2023 Workforce Benefits study by LIMRA and EY found that Generation Z individuals now represent the majority of workers and will comprise more than 60% of the workforce by 2031.
To tackle the decline in older talent and the growth of younger talent, JLL points to the need for insurance companies to remain competitive in the talent marketplace by providing workspaces that maximize collaboration, productivity and innovation. Ben Bailey, managing director of insurance at JLL, said providing a valuable workplace experience is especially important for younger talent, because these employees largely want to be in the office.
“They need mentorship. They need connections through the office culture, and they want to be in the office. The problem [we have seen in] the last few years is that when they come into the office, it’s a ghost town,” Bailey said in an interview. “So, how do you activate [the space]? How do you create energy in the space? And how do you make sure that people are getting what they want from it.”
The LIMRA-EY survey found that digitalization satisfies generational preferences for engagement, while maximizing the return on investment of benefit offerings for employers. JLL’s 2023 Banking and Finance Outlook underscored the importance of AI and digitization and found that insurance and financial service companies are prioritizing technology investments that increase speed, resiliency and cost efficiency.
The JLL forum, co-hosted by Bailey and Giles Wrench, the company’s vice-chairman of financial services and insurance, included executives from a range of insurance sectors, including health, property, casualty, commercial, life and annuity.
Amid uncertainty related to the future of workspaces, Bailey noted that leadership at the forum agreed on the importance of communicating changes to their employees. “Whether it be shifting to a hybrid work environment or shifting to an unassigned workspace,” Bailey said, “there’s consensus among the group that change management is worth every penny that you pay for it.”
As company leaders and employees modify their interactions with the workplace, changing space needs and high interest rates are pushing many organizations to rethink their real estate portfolio footprints. To attract the best talent and create a workplace capable of meeting evolving business demands, firms should “optimize their real estate portfolio to effectively support their workforce transformation and other strategic priorities,” Bailey said in a release on the forum.
Net-zero agendas present a plethora of challenges for insurance companies, which face growing environmental risks as part of their operations, alongside sustainability practices and reporting in their accounting and real estate transactions. “The distinct pressures confronting the insurance industry underscore the impact of physical climate risk on location decisions and talent strategy,” Sarah Bouzarouata, senior manager of research at JLL, said in the release.
Bailey added that in addition to portfolio decision-making and the use of building-level automation systems, such as sensors that help detect inefficiencies and improve operational functionality, JLL is working with companies to determine how they can meet sustainability goals and the expected U.S. Securities and Exchange Commission climate disclosure rules.
“We're all now in a world where we have to disclose. It's going to be part of the Securities Exchange Commission requirement,” Bailey said, noting that companies should start thinking about how they can prepare to meet these requirements and plotting a path to realistically achieve their objectives.
JLL said these key components have accelerated companies’ approaches to meeting regulatory requirements ahead of time, and led cities to respond to changes at a quicker pace than the federal government. As a result, organizations are expected to increase their focus on sustainability and decarbonization in their real estate decisions, with 51% of firms in JLL’s 2023 Future of Work Survey citing plans to ramp up investments that involve embedding net-zero requirements into new site selections in the next three years.