This isn’t just another labor shortage story. This is about how a cascade of strategic missteps over 25 years created the talent crisis now threatening the heart of our industry.

After three decades in insurance recruitment, I’ve witnessed the rise and devastating fall of what was once the industry’s crown jewel: comprehensive talent development programs. 

Today, as claims departments across the country struggle to fill entry-level positions and retain experienced professionals, we’re facing the consequences of decisions made in corporate boardrooms over two decades ago.

The Dismantling of Excellence

The numbers don’t lie. When the tech bubble burst in 2001, followed by the September 11 attacks, insurance companies made what seemed like prudent budget cuts. Training programs that had successfully onboarded college graduates for twenty years suddenly became “non-essential” expenses. All the major carriers had robust rotational programs where new hires spent 12-18 months learning every aspect of the business, from underwriting fundamentals to claims handling.

These weren’t just orientation programs. They were comprehensive education systems that created the industry expertise we relied on for decades. A typical program would rotate participants through different departments, provide mentorship, create cohorts, and build the foundational knowledge that made someone truly insurance-literate.

Then came 2002, and the budget axe fell hard.

When Crisis Became Catastrophe

What started as temporary cost-cutting became permanent structural damage. The 2008 financial crisis delivered the final blow to whatever training infrastructure remained. Those programs that survived 2001? They were eliminated entirely or radically reduced in scope. The industry essentially stopped investing in its own future.

Today’s professionals tell the story: those with 20 to 2 years of experience may or may not have received formal training (just think how much faster today’s managerial workforce could have learned, strategized, implemented had they only had access to that robust training which disappeared only moments before they arrived!) . Anyone with 15 years of experience likely missed the boat entirely.  And professionals with five years of experience? They joined during COVID, when even basic job comprehension was a challenge, much less comprehensive professional development.

Claims: The Perfect Storm

Nowhere is this crisis more acute than in claims. According to Capgemini’s recent research 70% of the global population will live in urban centers by 2050, creating unprecedented risk concentrations. Meanwhile, claims professionals are leaving the field at alarming rates, and we’re struggling to replace them.

Claims work has always demanded a unique combination of analytical ability, administrative precision, and emotional intelligence. You’re dealing with people during some of the worst moments of their lives — when disaster has struck and they’re looking for help. It requires both spreadsheet skills and genuine compassion.

But here’s the cruel irony: we’ve completely failed to market this as a meaningful career path. How many college students know that claims work involves helping families rebuild after disasters? That it requires sophisticated risk analysis and investigation skills? That it offers genuine human connection in an increasingly digital world? How many college students know that claims work even exists?

We’ve allowed claims to be perceived as paperwork processing, when it’s actually one of the most human-centered roles in our industry.

The AI Paradox

Technology is accelerating the challenge. AI is eliminating many traditional entry-level positions — the data entry and basic phone work that previously provided what I call “training wheels” for industry newcomers. New hires now enter at elevated skill levels but miss the environmental learning that these foundational roles once provided.

It’s like joining a fast-moving train without understanding the destination. These new professionals lack the osmosis learning that comes from starting at the bottom and working up. They’re technically capable but contextually lost.

Breaking the Cycle

The solution to the claims hiring and retention problem requires industry-wide recognition that we must reconsider and rebuild, or at the very least, augment and attract:

• Eliminate the degree requirement. Not every claims professional needs a four-year college degree. Many roles require specific skills that can be taught through targeted training programs.
• Create modern apprenticeships. Partner with community colleges and vocational schools to develop claims-specific curricula that combine technical skills with industry knowledge.
• Invest in emotional support systems. Establish employee resource groups specifically for claims professionals. Create formal channels for processing the emotional toll of the work.
• Reimagine compensation. If we pay for professional designations, why not help with student loan forgiveness? It’s educational reimbursement that benefits both the employee and employer.
• Tell our story better. Market claims work as what it actually is: a meaningful career helping people through difficult times while using sophisticated analytical skills.

The Demographic Reality

Capgemini’s research shows we’re heading into a world where seniors will outnumber youth for the first time in human history. The dependency ratio will increase 63% by 2050. 

We simply cannot afford to waste talent or maintain artificial barriers to entry. The companies that recognize this crisis as an opportunity will gain significant competitive advantage. They’ll build diverse, skilled workforces while their competitors struggle with unfilled positions and high turnover.

I’ve been in recruitment since 1995.  The struggle to hire and retain claims team members will worsen without mitigation. The problems are real but the opportunities are clear.

The companies that act now — that invest in comprehensive training, eliminate unnecessary barriers, and properly support their people — will dominate claims hiring and retention for the next decades. This might mean dominating customer satisfaction and reputational goodwill as well; after all, claims resolution is often viewed as the end product of insurance.

The question isn’t whether we’ll solve the talent crisis. The question is which companies will lead the solution and reap the rewards of a well-trained, properly supported workforce.

We broke this system over 25 years ago. We can fix it in five. As long as we start now.