The insurance world has a talent shortage, and currently there is a talent war going on, Alan Jay Kaufman, president of the Kaufman Group, said when he was interviewed by John Weber for AM Best TV at the WSIA Conference in San Diego on Nov. 18.
There is a shortage of talent, Kaufman said, and at this conference people are out to steal employees from each other. “They are picking your pocket, taking your best talent because your best talent is at the WSIA conference,” he said.
“It is not the collegiate atmosphere that we would like to have,” Kaufman said. “If there was more talent, we would be better off.”
Kaufman said that other industries have more people coming into the industry, so companies in that industry have the opportunity to be more selective. “I’m dreaming that someday that would happen (in the insurance business), but so far it has not.”
Kaufman indicated the talent war has been going on for decades.
Weber pointed out that Kaufman Group and its largest subsidiary, Burns and Wilcox, was started by Kaufman’s father and that Alan has two children following in his footsteps, so talent, from that aspect, is not a problem for Kaufman Group. Nonetheless, Weber wanted to know where Kaufman believes the next generation of talent for the excess and surplus lines business will come from.
“We need to get more people interested in joining the ranks of the insurance industry,” Kaufman said. It’s difficult to attract people to the insurance industry because insurance is not first and foremost on their minds.
Very few of the top ranked business schools have insurance programs, according to Kaufman. “Without encouraging people to go into the insurance industry, it is hard for the next generation and the generations that follow,” he said.
“We are fortunate in our company that we do have second and third generation people besides my two children. There is definitely a concern for where the next person is going to come from.”
Kaufman said his company had a good year hiring people in 2021 despite the pandemic. As he sees it, one of the reasons is that there has been a disruption caused by consolidation. “Consolidation has helped us in the sense that when there is a merger some of those people do not want to join the ranks of the company that has acquired them.” As a result his company not only found individuals, but teams of individuals that fit into his company and have done quite well.
When asked about the importance of diversity, Kaufman told Weber that it is important to have diverse talent because “the clients that we serve are diverse.”
Kaufman contends that his company’s success as a global enterprise is due in part to the collaboration that takes place within the company and having different points of view. Cultural differences, he said, help bring the ideas and innovation that facilitate Burns and Wilcox bringing the most important products to the company’s national retail partners.
According to Kaufman, recruiting talent begins with sparking an interest, which should start in young people’s university years. “Without having insurance classes offered in business schools, students are not going to have the opportunity to explore insurance” as a career, he said.
“It doesn’t mean they will major in insurance, or necessarily pursue insurance when they graduate, but at least they will have some footing on the ground about what insurance is. If an opportunity comes their way, they will have an interest,” he said.
That is not just rhetoric to Kaufman, who established a chair at Michigan State University, endowing a professorship in insurance. Before he endowed that chair less than 10 years ago, he said, the Michigan State Business School, which is a very high ranked business school, did not have one insurance class taught.
Now, the program has grown with more than one or two classes taught and a student can minor in insurance in addition to finance. If more people would step up – individuals as well as companies – he said, that would give students an opportunity to explore what insurance is about.
As it is, Kaufman said, “We do not have enough people coming into the industry or being attracted from other industries into the insurance industry.” He commented that the insurance business is a “good financial path for many, many people.”
When asked if being a global company gives Kaufman Group a financial advantage in talent acquisition, Kaufman responded that it “certainly does” because people can move around the country and world for various reasons.
Students are interested in the world and want to have opportunities available that are in more places than just the United States Those students are driven, he said, and have the dedication and tenacity to pursue an insurance career. “It takes all those ingredients besides smarts to be successful in the business.”
Weber wanted Kaufman to assess the talent coming into the insurance business and asked if the new hires are ready to hit the ground running.
Kaufman lauded the talent that is coming into the industry even though the industry is not for everyone. He described the students coming out of schools today as being more motivated and driven. They move from job to job and around the country more than the Baby Boomer generation of his time did. He believes the students are well prepared, and he would like to see “a lot more students come into the industry and a lot more people interested in the insurance industry.”