Insurtech Talent Development in Hong Kong – From Insurance to Insurtech: Strategies for Building a Sustainable Talent Pipeline

16 From Insurance to Insurtech: Strategies for Building a Sustainable Talent Pipeline Covid-19 has sped up the digitalization and streamlining of operations and claims procedures for insurance firms in Hong Kong. It has become imperative for the sustainability of insurance companies to continuously innovate tomeet customer needs and remain competitive.31 Insurtech has become more important in Hong Kong’s market as it has the potential to revamp the entire value chain in any insurance system. Manpower demand for insurtech experts under these circumstances is expected to rise in the future for the continuous development of the industry.32 Insurtech is rapidly transforming the insurance workforce and the range of skills required by them to apply in increasingly changing conditions.33 Those who are good at insurtech – its deployment and applications – will be in high demand. In fact, the skills required by insurance businesses are also rapidly changing, but many of them are finding it increasingly challenging to find the right talent. People with digital capabilities, advanced analytics, agile skills, soft skills, and the ability to create human-centered designs are much needed.34 In April to June 2020, as the pandemic peaked, Hong Kong’s unemployment rate reached the highest in over 15 years at 6.2%.35 Despite the economic slowdown triggered by Covid-19 measures, many companies in Hong Kong were looking for the right talent to fill positions, especially in the areas related to actuary, compliance, risk management and insurtech.36 Specifically, potential employees with skills and specialized training in digitalization, data management and analytics are currently sought in the insurance industry. Overall, the market for insurance talent in Hong Kong is quite competitive. Various companies are all seeking people who can help them advance technologically, innovate, and remain competitive. The insurance sector in Hong Kong is generally facing difficulty in attracting and retaining insurtech manpower. In a survey conducted by the HKFI in February 2022, around a third of the international insurers in Hong Kong were considering cutting back operations in Hong Kong because of Covid-19 policies that contributed to the talent shortage in the city.37 Emigration out of Hong Kong in recent years has also adversely affected the talent pool. Moreover, graduates in relevant disciplines tend to view other jobs in the fintech industry as more appealing or they prefer to pursue more “traditional” and established roles in the finance sector. Such shortage in talent was highlighted by the IA’s Chairman, Stephen Yiu Kin-Wah. In May 2022, Yiu revealed that the IA was facing personnel shortage and was understaffed by around 10%,38 for which he attributed in part to private insurers hiring the IA’s staff to fill their vacancies.39 31 Insurance Training Board (2020). Manpower Update Report Insurance Industry . https://vpet.vtc.edu.hk/wiki/images/ 1/13/2020_Insurance_Industry_Manpower_Update_Report_eng.pdf 32 Ibid. 33 Manpower Group (2020). The Future of Insurance Recruitment . https://www.manpowergroup.co.uk/wp-content/ uploads/2019/05/MPG-The-Future-of-Insurance-Recruitment-Whitepaper-Web.pdf 34 McKinsey & Company (2021, December). Eight Talent Imperatives for Asian Insurers . https://www.mckinsey.com/~/media/ mckinsey/industries/financial%20services/insurance%20blog/eight%20talent%20imperatives%20for%20asian%20insurers/ mckinsey_eight%20talent%20imperatives%20for%20asian%20insurers.pdf 35 Insurance Training Board (2020). Manpower Update Report Insurance Industry . https://vpet.vtc.edu.hk/wiki/images/ 1/13/2020_Insurance_Industry_Manpower_Update_Report_eng.pdf 36 Ibid. 37 Insurance Asia (2022, June). How did Hong Kong’s Insurance Industry Fare in its First Quarter? . https://insuranceasia.com/ insurance/in-focus/how-did-hong-kongs-insurance-industry-fare-in-its-first-quarter 38 Insurance Asia (2022, June). Hong Kong Insurance Regulator Faces Staff Shortage: Report . https://insuranceasia.com/ insurance/news/hong-kong-insurance-regulator-faces-staff-shortage-report 39 Insurance Asia (2022, June). How did Hong Kong’s Insurance Industry Fare in its First Quarter? . https://insuranceasia.com/ insurance/in-focus/how-did-hong-kongs-insurance-industry-fare-in-its-first-quarter