Talent is the 'real existential risk' for insurance: NFP's Gillingham

By Erin Ayers, Front Page News

The insurance industry’s talent crunch isn’t a “slow-moving HR problem,” but rather a determining factor on the market's ability to take action on its most pressing challenges today, according to Tom Gillingham, president of commercial risk for NFP, speaking during Zywave’s recent Digital Distribution Conference in New York City.

“The real existential risk in our market is talent and we are underpricing it,” said Gillingham during a keynote address that covered pressure on the traditional “generalist” broker model, deceleration of growth in the excess and surplus (E&S) lines market, a mismatch on artificial intelligence (AI) adoption and application, sliding pricing in the commercial market, and talent.

“Talent is not a slow-moving HR problem; it is the resource constraint that will determine which of the other four trends you can actually act on,” said Gillingham.

Per the U.S. Bureau of Labor Statistics, by the end of 2026, about 400,000 insurance professionals will have retired since 2021. Over the next 15 years, the industry will lose about another 50% of its existing workforce. And insurance has a major image problem.

“Insurance ranks below mining and manufacturing as appealing to new career entrants,” he said, adding, “We like to talk about this as a demographic problem happening to us. It is not. It is substantially a problem we have manufactured through decades of underinvestment in how the industry presents itself.”

Retirement may be half the talent story, Gillingham commented, but the other half is about how the industry approaches insurance producers who have not yet retired. It’s a tale that “should genuinely bother everyone” in the audience, he warned.

For example, broker Howden launched its retail business in the U.S. in August 2025, hiring away more than 500 people from its competitors, Gillingham explained. A slew of lawsuits has followed in the wake of those exits, with one broker, Brown & Brown, even outlining the escalating impact of lost revenue of an estimated $50 million to $60 million over a year.

Howden isn’t the outlier, either, per Gillingham. Brokers have been suing each other for years over the exits of experienced producers and, by extension, business.

“The real cost of our talent isn’t just the 400,000 people walking out the door to retirement, it’s the legal spend. The injunction hearings, and the executive attention the firms in this room are pointing to fighting each other over a shrinking pool of people who haven’t retired yet,” Gillingham said.

That’s money and time that could be better spent, he commented, adding, “We are collectively spending real dollars defending market share in a zero-sum fight for experienced talent instead of spending those same dollars growing the supply of the talent. That’s not a strategy. That’s a symptom.”

Talent and AI converge more than the industry might realize, per the NFP executive.

“The two topics get treated as separate workstreams, and I think that’s a strategic mistake,” Gillingham said. “The honest tension is this: We are simultaneously telling the market AI will make our workforce more efficient, and telling our own people that AI is coming for their jobs. And both messages land with early career talent at exactly the moment we most need them to walk in the door.”

With insurance already behind in the recruiting game, getting new talent in the door only to do manual submission for two years before doing more interesting work isn’t helping the value proposition, he warned.

“The firms that are going to solve this aren’t the ones running the most job fairs. They’re the ones restructuring entry-level roles around AI from day one,” Gillingham said.

Exposure analysis and client-facing work make for a more engaging introduction than data entry and being told to “pay your dues,” he said.

“For those of us who came up through this industry the traditional way, this is an uncomfortable thing to advocate for,” Gillingham said. “That means the apprenticeship model that built our own careers doesn’t scale to the workforce we now need to build. Nostalgia for how we learn the business is not a talent strategy.”

Insurance also currently faces a mismatch on AI adoption and utilization, according to Gillingham.

“This industry has an adoption problem that looks like a success and a capability problem that looks like nothing at all,” he said.

Nearly all insurers in the U.S. and Europe are using generative AI, he said, citing analyst data. However, a recent WTW survey found that just 16% of insurers use AI to augment underwriting decisions, with the majority using it largely for administrative tasks.

“Think about what that gap means. We’ve overwhelmingly adopted a technology for the thing it’s least differentiated at doing – going faster – and we’ve barely touched the thing that would actually move loss ratios and combined ratios, which is better risk selection,” he said.

And while the industry has made real strides in implementing AI in the claims process, true end-to-end automation is a long way from being the norm. More than technology, AI regulation should be on every carrier executive’s radar, Gillingham warned. “The regulatory scaffolding is going up in real time,” as 24 states and the District of Columbia have adopted the National Association of Insurance Commissioners (NAIC) model bulletin on AI, he explained.

“The winners over the next three years will not be the companies that adopted AI first. Adoption is basically universal. The race is over, and nobody won it because we’re all in it,” said Gillingham. “The winners will be the handful of companies willing to do the harder work of actually changing underwriting judgment and risk selection with the technology, and doing it in a way that survives regulatory scrutiny. That’s a talent and governance problem, not a procurement problem.”

Managing Editor Erin Ayers can be reached at [email protected].