Illustration Of Service Oriented Layered Architecture And GlobalAutomation could leave up to 25 percent of the insurance industry’s current full-time positions consolidated or replaced over the next decade, McKinsey & Company said in a new report.

The consultancy urged insurers to “rethink their priorities right now” and focus on revamping their operations to accommodate the digital transformations contributing to the trend.

Priorities “should include retraining and redeploying the talent they currently have, identifying critical new skills to insource, and retuning value propositions in the war for new talent and capabilities,” McKinsey & Company said. “That competition will almost certainly increase as the digital transformation takes hold.”

Most of that change would likely hit operations. Based on an evaluation of Western European insurers (and the use of its full-time-equivalent benchmarking database), McKinsey & Company predicted that just 33 percent of the insurance-industry workforce would be centered in operations within a decade, down from 46 percent in 2015. Automation could leave 10 percent of the workforce focused on administrative reports, down from 18 percent in 2015.

Other drops would be smaller. McKinsey said product development, marketing, and sales support would go from 21 percent of the workforce in 2015 to 20 percent within a decade. Similarly, IT could decline from 15 percent to 12 percent over the same period.

McKinsey said that declines could be steeper in more saturated markets where declining business volumes and redundant IT positions are more common. But other higher value positions could see a gain in numbers, the consultant wrote, such as marketing and sales support for digital channels and analytics teams that detect fraud.

McKinsey noted a related report from sister firm McKinsey Global Institute that puts insurance automation trends in line with the bigger picture. They found that automation will “change the vast majority of occupations, and up to 45 percent of all work activities in the United States can be automated right now with current technology.”

Source: McKinsey & Co.

Topics InsurTech Talent Market