The insurance industry is grappling with a demographic dilemma. A significant portion of its workforce is nearing retirement, with an aging population and a looming swath of retiring veterans the sector risks losing capacity to grow and compete internationally.

An ageing insurance workforce and looming retirement risk

More than one quarter of UK insurance staff are already over 50. The Re:Generation research warns that 50% of the current workforce could retire in the next 15 years, taking decades of tacit underwriting know-how with them. London’s market is particularly exposed: it’s estimated that some 10% of its property risk engineers alone are due to retire in the next couple of years. This presents a looming ‘brain drain’ and risks one of our largest financial services industries losing market.

A thin graduate pipeline

At the opposite end of the career ladder, insurers still struggle to win hearts and minds on campus. Surveys of business students consistently rank insurance well below tech and finance as a desirable career. Despite a modest 13.5% rise in graduate hires between 2020-22, 2025 saw an 18% drop in graduate vacancies across the sector. The London Market Group reports that the over-50s and under-30s now each account for roughly the same share of the talent pool, signalling a shallow bench of emerging leaders and a change to the pyramid structure we have seen for so long across financial services. Many graduates join the industry because of a family connection, rather than being pulled towards the world of risk.

Brokers are particularly struggling to generate young talent, with more than half reporting that they struggle to bring in new recruits under 30, even with support and training programmes to promote development for new brokers.

AI anxiety amplifies the talent gap

AI offers a partial, if potentially short-term, solution: it can capture and replicate patterns from historical data, preserving some of the wisdom of retiring experts; and potentially replacing them in part. Insurers anticipate a 1% reduction in employment due to AI, while also expecting an 8% boost to productivity from AI over the next 3-5 years according to a Bloomberg intelligence report. However, it also raises fears of job losses. Nearly 70% of underwriters worry they could be replaced by AI within five years, and many feel underprepared for a tech-driven future. Without robust reskilling plans, the very tools intended to preserve corporate memory risk alienating the people who still hold it.

London’s dominance and the struggle to grow regional insurance talent

London remains the epicentre for high-value underwriting, attracting almost 39% of all UK insurance vacancies and employing 71% of the London Market’s 48,000 staff. Profits and a vibrant insurtech scene have sparked a 6.6% rise in City hiring even as roles in many regional offices decline. This gravitational force perpetuates salary inflation and intensifies competition for scarce specialists alongside budding young talent. London does have it’s own systemic problems with demographic though, with over 25% of underwriters in the City being over 50; potentially leading to a significant wave of retirements in the next five years.

Outside the capital, hubs in Manchester, Birmingham, Bristol and Glasgow are courting insurers and brokers with lower costs and hybrid work options. Firms such as Arch, Brit and Aon now operate distributed underwriting teams across at least 11 regional centres, arguing that local knowledge builds broker trust and improves loss ratios. Yet regional growth is uneven. Vacancy volumes fell 13.7% across non-London markets last year, and networking opportunities remain thinner than the City’s dense after-work culture - a hurdle organisations like iCAN and the CII are trying to tackle through active chapters in regional hubs like Birmingham and Manchester.

Insurance’s employer brand problem

The industry suffers with a perception problem – only 4% of young people find a career in insurance appealing. While some of the largest in the sector benefit from their global scale to draw in new recruits, brokers and smaller insurers lack this brand equity along with a large scale lack of awareness of how to break into the insurance industry. A lack of structured programmes, clear development pathways and general awareness of the opportunities for young insurers and brokers is leaving the industry with a large gap in skills and ultimately questions of succession in the medium term for many firms.

Key priorities for closing the insurance sector's talent gap

1. Awareness raising

The sector needs to raise its awareness with young talent and not be as reliant on word of mouth. Firm’s need to collaborate to position insurance as a purpose-driven, tech-enabled profession solving live climate, cyber and media challenges. There have already been good examples of firms and industry bodies partnering with higher education, but firms need to be focused on bringing the sectors reputation into the forefront of young people’s minds when they are looking for a career – competing with the entrenched banking, fintech and trading sectors.

2. Pivoting the hiring strategy

Firms need to focus on growing their pool of tech-savvy talent. The future of the sector will be digitalised in some form, and successful firms will be the ones which grow talent with the digital skills to keep pace with the changes coming in the future.

3. Expand on the learning opportunities available

Reinstate robust apprenticeship and graduate schemes that blend actuarial fundamentals with coding, analytics and behavioural risk modules. Aon reports that 75% of firms now offer formal underwriting programmes; replicating this across claims and tech roles would widen intake. Utilise the coming apprentice programmes being promised by the Government. Investing now in education and recruitment may press margins in the short term, but will provide longer term stability.

4. Retain and reskill mid-career experts

‘Mid-life MOTs’, part-time pathways and age-inclusive policies, already adopted by some large manufacturers, encourage experienced staff to extend careers while mentoring juniors.

Acting now to secure the future of insurance talent

Insurance’s demographic dilemma is a slow-burn that will turn to crisis if unaddressed. The market’s prosperity masks a looming national shortage of skilled risk professionals, while AI adoption adds another layer of uncertainty. The winners will be those that act now; celebrating veteran expertise, investing in early-career talent and work to grow the reputation of the market as a whole. In doing so, the sector can transform demographic threat into a catalyst for a more agile, inclusive and future-proof industry.

To discuss how demographic change, talent shortages and AI may impact your insurance workforce, contact Erin Sims.

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