📊 STAT OF THE ISSUE

79%: The share of Gen Z who have never even considered a career in insurance, despite 55% of them viewing the industry positively.

That's an invitation we forgot to send.

Let's start with a number you've probably seen before: 400,000.

That's how many insurance workers are projected to leave through retirement and attrition by 2026. We've been citing it for years like it's a warning label on a distant bridge. Well, we just crossed it. The 400,000 is no longer a forecast. It's a current operational reality sitting inside your org chart right now.

But I want to push past the headline number this issue, because there are three questions underneath it that I don't think our industry is asking clearly enough:

1. Who is actually going to fill these roles?

2. Will AI offset enough of the gap that headcount doesn't need to be 1:1?

3. What roles genuinely can't be automated — and are we building pipelines for those?

Let's take them one at a time.

First: Stop Talking About Millennials

I need to flag something before we go further.

You've probably seen statistics citing millennials as the generation the industry needs to attract. I wrote a whole best-selling book on this topic! (still available on Amazon and with the same name as this newsletter: Insuring Tomorrow) I want to retire that talking point, because it's outdated in a way that matters. The book is still awesome, but the reality is we need to focus a lot more on Gen Z.

Millennials are 28 to 43 years old The oldest are already in mid-career. Many are in leadership roles. Millennials aren't the pipeline problem… they're already in the building. The talent crisis conversation needs to shift entirely to Gen Z, or we're solving for the wrong generation.

So let's talk about Gen Z. And the numbers here are actually more striking than the millennial stats ever were.

A new 2025 Cake & Arrow report found that 79% of Gen Z have never considered working in insurance, and nearly half, 49%  say they have no interest in doing so, despite 55% still viewing the industry positively. Jacobsononline

Read that again. More than half of Gen Z has a positive view of insurance. They're not hostile to us. They just don't see themselves here. The findings point to a perception paradox: young professionals recognize the value of insurance careers but struggle to see a place for themselves within the industry. Jacobsononline

That distinction matters enormously for how you solve it. This isn't a reputation problem. It's a visibility and relevance problem. The issue is not a lack of interest in insurance careers. It is a lack of exposure, clarity, and intentional pathways into the industry. When those elements are present, early-career professionals don't just stay, they become advocates. Insurance Journal

There's also a fear layer that's new and worth understanding. Gen Z looks at entry-level roles and wonders: "Will a robot take this job next year?" For industries like insurance, seen as old-fashioned or slow, this is a big problem. Wipfli LLP Which brings us directly to question two.

Will AI Offset the Headcount Gap?

This is the question every insurance leader is quietly asking but few are saying out loud. If we can't fully replace 400,000 retiring workers with new humans, will AI pick up enough of the slack that we don't have to?

The honest answer: partially, yes, but not the way most people are assuming.

2026 is being called "the year AI goes operational in insurance." After years of pilots and governance groundwork, carriers are embedding AI into submission triage, loss run processing, claims, and service, though while over 90% of carriers tested AI in 2025, only 22% reached full production. Patra

The roles that are transforming are clear: claims processing AI can now handle the bulk of routine claims, while human adjusters focus on specialized cases. Actuaries are shifting from number-crunching to validating AI models and providing strategic insight. Customer service AI can automate basic queries while reps focus on complex relationship work. Risk & Insurance

So yes, AI is compressing the volume of routine work. McKinsey estimates generative AI could automate work activities that currently consume 60–70% of an employee's time in insurance. Insurancethoughtleadership That is a meaningful productivity multiplier. In theory, a smaller team with AI augmentation can do what previously required more headcount.

But here's the catch that keeps getting glossed over: businesses that have cut entry-level roles in favor of AI are now seeing an unanticipated negative effect, the work performed by junior employees didn't disappear, it shifted to senior staff, who are now experiencing increasing burnout and rework. AI accelerates a range of tasks, but cannot replace human judgment, design work, testing, and stakeholder conversations. Patra

In other words: AI doesn't eliminate the need for humans. It changes which humans you need and what they do. The industry won't shrink to a skeleton crew. But it will need a different shape, fewer people doing high-volume transactional work, more people doing judgment-intensive, relationship-driven, and AI-governance work.

The BLS projects that while the total number of claims professionals will decline by 5%, the industry will still face approximately 21,500 job vacancies each year over the next decade. Insurance Journal That's the realistic picture: AI compresses the gap but doesn't close it.

And we’re not even talking about how future expert claims adjusters, underwriters, etc will get trained, if we automate the entry level jobs that used to train them? Like I asked over and over in my book Insuring Tomorrow, and in the over 80 keynotes I’ve given around the insurance industry: Where will your future leaders come from? Much more to come on this topic in future newsletters.

What AI Cannot Replace And Where the Real Pipeline Urgency Is

This is where I want to be direct with you, because this is where the hiring strategy needs to shift.

There are roles in insurance that AI is genuinely transforming:

• Routine claims triage → increasingly automated

• Standard underwriting submissions → AI-assisted, faster, fewer hands

• Data entry and document processing → largely gone or going

• Basic customer service queries → chatbots handling the first layer

But then there's the work that AI doesn't touch, and won't anytime soon:

When clients face emotional or complex situations, health crises, major accidents, the loss of a loved one, they don't want a chatbot. They want someone who listens, understands, and guides them through difficult decisions. That empathy builds trust and strengthens long-term relationships. Insurance Business

The roles that remain irreplaceable are the ones that require judgment under ambiguity, trust built over time, ethical accountability, and human context. Complex claims. Large commercial underwriting. Broker relationships. Leadership. Compliance and governance. Building and training the AI systems themselves. (And again, if we automate all the entry level roles, where will our people learn the skill we need the to have for more complex roles?)

The largest projected growth areas in insurance right now are technology, underwriting, and claims Workday Blog, which tells you exactly where to be building your pipeline. Not the transactional roles that are compressing. The judgment-heavy, relationship-intensive, tech-adjacent roles that are expanding.

As retirements outpace new talent, leading insurers are redesigning roles early to prioritize judgment, compliance, and strategic work, with human oversight central. Sonant That redesign has to happen before the vacancy, not after.

The Real Play for Gen Z

Here's the thing about Gen Z and all of the above: they actually want the roles that are growing.

Gen Z wants careers that mean something. They want flexibility, modern tools, mentorship, and work that has a positive impact on people's lives. Send Sound familiar? Complex claims work, advisory roles, InsurTech product roles, these are purpose-driven, relationship-intensive, technically interesting careers. They match what Gen Z says they want almost exactly.

The problem isn't product-market fit. The problem is that 67% of Gen Z describe insurance careers as "boring," and only 16% express interest in working for large organizations. Jacobsononline We're letting our reputation do our recruiting for us, and our reputation is lagging reality by about 15 years.

The companies breaking through are doing a few things differently:

They're recruiting where Gen Z actually is. More than 50% of Gen Z spend four or more hours on social media every day, that's the first place they look for information. Capgemini State Farm's Jake from State Farm TikTok account has over 2 million followers. That's not a coincidence. That's a strategy.

They're leading with purpose, not product. The perception challenge is actually an opportunity, there's a lot of ground to make up in insurance, and for a generation that wants to make a difference, "go where you can provide value and change things" is a genuine selling point. IA Magazine

They're investing in in-person mentorship. Contrary to assumptions about Gen Z preferring distance, proximity and informal mentorship proved critical, simple moments like conversations over coffee or recognition in passing created a sense of belonging that formal training programs alone cannot replicate. Insurance Journal

That doesn’t mean they don’t want flexibility. They want in-person to learn and connect. They want flexibility to execute.

Three Things to Do This Week

1. Audit which roles in your org are AI-compressible vs. judgment-critical. The shape of your talent need is changing. Map it before you're filling vacancies reactively.

2. Redesign at least one entry-level role description around what it will look like in 3 years, not what it looked like 3 years ago. If the first thing a new hire does is mostly work that can be automated, that's a retention problem before it's even a recruiting problem.

3. Get visible where Gen Z is. That might mean LinkedIn for some of you. It might mean TikTok or Instagram. It at minimum means being present on your local university campus with a clear story about what a modern insurance career actually looks like. And please don’t let marketing, legal, compliance, etc ruin this. IT MUST BE AUTHENTIC! It can’t smell like marketing or you’re just wasting your time and money.

The 400,000 is real. AI offsets some of it. Gen Z fills the rest, but only if we invite them in the right way.

— Tony

🎩 FEATURED MAGIC

Look ma, no camera trick: https://youtu.be/LcfhjbTJ1ns?si=tK4OnF4CBMt6PBQq

🎙️ FROM THE PODCAST

Profiles in Risk · Episode 800: "EPLI is broken, it doesn’t defend the victim!"

Kit Chaskin, CEO and Lauren Golanty COO at Third to First.

In this episode, Kit, Lauren, and I dig into why EPLI is broken and how it must get fixed. This is radically important!

[EPLI]Wasn’t setup to benefit the people who carried it. EPLI very specifically pitted employers vs employees who report."

“EPLI is a 3rd party liability policy? Where is the 3rd party? If you are the employer and you have two employees, one of whom is harassing and one of whom is being harassed. Who is the adverse 3rd party? EPLI says that the person who has been harassed is the adverse 3rd party. So right off of the bat, that person who reports is outside the box. They do not get communicated with in writing. They obviously have no coverage under the policy so their legal bills don’t get paid. All of the costs associated with the harassment. They have to bring a claim and maintain a claim all by themself against a corporation.”

🎧 Listen → https://podcasts.apple.com/us/podcast/profiles-in-risk/id1209984530

 📺 Watch → https://youtu.be/TyyS_mGa9KQ 

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💬 TONY'S TAKE

I keep hearing "we can't afford to invest in talent right now."

Here's what I say back: you're already paying for it, just on the backend. Turnover. Open roles dragging on. Have you calculated the cost of vacancy? Senior people doing junior work because you cut entry-level headcount thinking AI would cover it. Institutional knowledge that left with the last retirement and now lives nowhere.

The question was never whether to invest in people. It was always whether to do it intentionally or accidentally. One of those is a lot more expensive.

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