As the insurance industry leans ever harder on automation and AI to gain efficiency, a parallel challenge threatens to undermine those advances: a growing shortage of underwriting talent.
The combination is creating a delicate balancing act – one where technological transformation risks accelerating just as human expertise becomes harder to replace.
Jullie Hands (pictured), partner, business consulting, insurance transformation at EY, described the underwriting talent gap as “both urgent and potentially destabilizing.” Across the industry, seasoned underwriters are approaching retirement age, and too few younger professionals are ready to take their place. The result is a demographic cliff that could leave insurers without the institutional knowledge that has long underpinned disciplined risk selection and pricing.
Without that experience base, insurers face more than just staffing shortages – they risk losing the subtle judgment that separates profitable portfolios from volatile ones. Knowledge gaps in pricing, risk evaluation, and client management could lead to inconsistent underwriting standards, higher loss ratios, and erosion of trust among brokers and clients.
The issue is not confined to any single market segment. In both commercial and specialty lines, the stakes are particularly high: every underwriting decision involves complex risk dynamics, and replicating decades of experiential learning with algorithms alone is not realistic.
To prevent a generational loss of expertise, Hands said organizations need to institutionalize mentorship and succession planning, while using technology to preserve insights before they disappear. Digital platforms and AI-based knowledge capture systems can help codify underwriting logic and historical decisions, ensuring that critical judgment doesn’t vanish with retiring staff.
Increasingly, some insurers are experimenting with “digital apprenticeships,” where AI tools record decision pathways from experienced underwriters to create a structured learning model for new recruits – a way to teach judgment, not just rules.
Yet technology alone cannot close the gap. Retention and culture have become as important as recruitment. “Competition for skilled underwriters is intensifying,” Hands noted, and compensation alone is no longer enough to attract or keep top performers. Insurers will need to focus on creating environments where people feel valued, connected, and developed – conditions that encourage long-term commitment in a sector known for slow career mobility.
Even as insurers struggle to fill underwriting seats, automation continues to reshape how decisions are made. But Hands cautioned that the pursuit of speed and efficiency can easily tip into over-automation – a state where process optimization undermines quality and relationships.
There is no fixed line between efficiency and excess, she explained. The balance depends heavily on client segment and business complexity. “For SME business, automation can drive significant efficiencies,” she said, because those clients tend to seek standardized products and quick responses.
In contrast, large commercial and specialty accounts still depend on personalized interaction and tailored coverage, where the judgment and trust of experienced underwriters remain critical.
The same tension plays out in claims. While automation can streamline routine processes and reduce administrative overhead, overemphasis on cost control can have unintended consequences.
“Focusing too much on efficiency and internal staff costs can lead to increases in indemnity spend and claims leakage,” Hands noted – the very outcomes automation is meant to prevent.
Maintaining human oversight, particularly in complex or high-value claims, ensures that decisions remain context-aware and aligned with long-term client relationships. It also helps preserve the confidence of brokers and corporate clients who still see value in expert judgment, not just algorithmic speed.
In many ways, the talent shortage and automation trend are two sides of the same coin. The more insurers automate, the more they rely on a smaller pool of experts to oversee, validate, and refine those systems. The fewer experts available, the greater the temptation to automate decision-making further – often at the expense of nuance and client trust.
The industry’s challenge is to modernize without hollowing itself out. That will mean using technology not to replace underwriters and claims professionals, but to elevate them – giving them better tools, richer data, and more time to apply the kind of expertise that no algorithm can yet replicate.
