Australian Insurers Struggle with Workforce Challenges
The Australian insurance sector is grappling with more severe workforce challenges than its global counterparts, raising concerns about its ability to attract and retain skilled professionals. According to Gallagher Bassett’s (GB) latest whitepaper, ‘The Carrier Perspective: 2025 Claims Insights,’ 92% of Australian insurance respondents reported that a limited talent pool is impacting claims management and business growth. This figure is significantly higher than the global average, where 72% of respondents faced similar issues.
Rethinking Retention Strategies Beyond Salary
Employers in the industry are now focusing on non-financial benefits to address retention. About 74% of local respondents identified enhanced benefit offerings, such as wellness programs and flexible work arrangements, as crucial to their retention strategy. There was a notable decline – 54% – in reliance on salary increases as a standalone retention tool. Tanith Jones, GB’s general manager of people and culture, emphasized the importance of supporting professional development, additional leave entitlements, and access to well-being programs in enhancing staff engagement and loyalty.
“Insurers can focus on developing existing employees through leadership or technical skill-based programs, which also attracts new talent looking to enter or grow in the industry,” Jones said. “Understanding what matters most to employees can significantly increase job satisfaction and ensure long-term retention.”
Claims Management Under Pressure
The shortage of experienced claims professionals is particularly acute, with a growing proportion of the workforce nearing retirement. “The talent deficit in the insurance industry is a pressing issue that cannot be overlooked. Australia is the most severely impacted by this trend,” said Debbie Vounakis, GB’s head of sales and client services.
Changing Workforce Expectations
GB’s findings align with wider employment trends highlighted in Aon’s 2025 Human Capital Employee Sentiment Study. The study revealed that 60% of workers globally are open to changing roles in the coming year, indicating continued volatility in the talent market. Gen Z workers ranked work-life balance as their second most important benefit after medical coverage, ahead of paid time off and career development.
Industry Response to Talent Shortage
The Insurance Council of Australia (ICA) has developed a structured approach to address long-term talent issues. In September 2024, the industry body released a six-year Insurance Industry Talent Roadmap aimed at sustaining workforce capability and attracting new talent.
The Australian insurance industry’s workforce challenges underscore the need for innovative retention strategies and talent development programs. As the sector continues to evolve, insurers must adapt to changing workforce expectations and technological advancements to remain competitive.
