Insurance industry prepping for workplace transformation

NEW YORK, Oct. 3, 2023 – The impacts of artificial intelligence (AI) and activation of the workplace were top of mind for insurance commercial real estate leaders at JLL’s 2023 Insurance Forum in New York City on September 19. The event, which brought together insurance executives seeking insights on the industry’s challenges and opportunities, focused on four key themes: workforce transformation, return to office, how to best optimize real estate portfolios and sustainability.

Co-hosted by Ben Bailey, Managing Director, Insurance, JLL, and Giles Wrench, Vice-Chairman, Financial Services & Insurance, JLL, the forum featured panels and presentations designed to drive engagement between participants, share best practices and discuss the trends shaping the insurance industry.

“Insurance companies are confronting the same uncertainty as other office users and attempts at boosting daily office attendance to reinforce culture have translated with varying degrees of success,” Bailey said. “The industry is unique in that insurance companies are balancing intense cost focus with the imperative to attract and retain a new generation of talent. Events like this prompt an open exchange that leads to fresh thinking around common challenges.”

1.      Activating the workplace of the future now

By 2036, it is estimated that 50% of the insurance workforce will have retired, according to the United States Bureau of Labor Statistics. This insurance talent cliff underscores the need to create a compelling workplace that appeals to younger talent and inspires the industry's workforce with a greater sense of purpose in our communities.

Activating a workplace that maximizes collaboration, productivity and innovation enables insurance firms to better compete for talent. It also better allows management to set up employees for success and career advancement and enabling agility for supporting continuous workplace changes over time.

“While workplace strategies will vary across industries – and functions within those industries – insurance companies that invest in cultivating a strong, inclusive culture that shows employees that what they do in an office environment is valuable to them will retain, as well as attract, top talent.” Wrench said. “Additionally, providing modern, high-quality spaces where people want to work must be a top consideration.”

Creating workspaces that draw employees back must provide a meaningful experience for them beyond management’s desire to be more office centric. Establishing exciting career paths and connecting an employee’s purpose to the company’s mission will increase engagement and appeal to the next generation worker.

2.    How artificial intelligence (AI) will inspire workforce transformation

According to JLL’s 2023 Banking and Finance Outlook, insurance and financial services companies are prioritizing technology investments to increase speed, resiliency and drive cost efficiency. Many already incorporate AI tech into their daily business operations, employing tools like AI-powered virtual assistants to help customers and using predictive analytics to assign claims. AI can also play a role in boosting productivity by simplifying tasks like analyzing complex data sets and report writing.

“Insurance companies are actively embracing innovative technology, specifically in the realm of artificial intelligence,” Wrench added. “This adoption is already influencing their real estate decision-making process, as they strive to attract a specialized workforce capable of developing these cutting-edge technologies for their core operations.”

Furthermore, the adoption of innovation and technology is crucial for attracting and retaining top-tier talent in the insurances sector. To stay ahead of the competition, firms prioritize hiring individuals skilled in cloud computing, generative AI, machine learning and programming will excel. To create a compelling value proposition for talent in these emerging fields, it will be essential to offer tailored workplace flexibility and environments that foster innovative and diverse thinking.

3.     Portfolio optimization decisions

Strategically assessing space needs to optimize real estate portfolios feeds into the importance of leveraging technology and data to achieve a footprint that not only provides significant cost-savings benefits but also enhances the customer and employee experience.

"A forward-thinking real estate strategy empowers insurance companies to attract and retain the best tech talent, establish the essential infrastructure for cutting-edge technologies and cultivate a nimble workplace capable of meeting evolving business demands,” Bailey said. “By aligning real estate strategies with larger corporate objectives, firms can optimize their real estate portfolio to effectively support their   workforce transformation and other strategic priorities. Ultimately, the success of an organization’s talent strategy hinges on a comprehensive approach encompassing a multitude of considerations and workplace strategy is a key element."

4.     The net-zero agenda

Regularly assessing one’s portfolio presents an opportunity for insurance firms to decrease their carbon footprint, and ESG and other sustainability considerations are critical when assessing location strategy. In an industry that is all about risk, climate risk implications are an important meter to influence location strategy. Sustainability practices also play an important role in managing risk.

“The distinct pressures confronting the insurance industry underscore the impact of physical climate risk on location decisions and talent strategy,” Sarah Bouzarouata, Senior Manager, Research, JLL. “By adopting a real estate strategy rooted in sustainability, organizations can effectively mitigate operational risks while seizing the opportunity to drive substantial progress in achieving their decarbonization goals across their portfolios.”

JLL’s Future of Work Survey detailed that 78% of financial services organizations say their employees will increasingly expect the workplace to have a positive impact on the environment. Additionally, the research shows that 51% of firms plan to accelerate investment into embedding net-zero requirements in new location selection over the next three years.

Accelerating approaches to achieving net-zero will not only meet regulatory requirements but be ahead of them, as cities are responding faster than the federal government to change. Additionally, clearly defining commercial real estate climate metrics and reduction targets satisfies intensifying demand by real estate investors.

In an industry that is rapidly transforming, JLL Financial Services offers the right alchemy of integrated technology, sustainability strategies and a forward-thinking approach to our banking, insurance, investment management and fintech clients. Whether clients are looking for us to optimize their real estate portfolios or manage their retail banking facilities, we serve as a trusted partner by developing real estate and advisory solutions to help accelerate growth while balancing risk. Armed with unmatched industry-focused intelligence and a dedicated understanding of the complexities of this highly regulated business, our experts deliver a consultative approach to clients with a spectrum of services and products throughout all stages of their real estate lifecycle.  

Armed with unmatched industry focused intelligence, our experts are dedicated to navigating and simplifying the complexities of this highly regulated business, to deliver a consultative approach with a spectrum of services and products throughout all stages of our clients’ real estate lifecycle.

Our ethos towards hiring and training top talent and providing a seamless value driven client experience has positioned JLL as a domestic and global market leader within the financial services commercial real estate business. Visit us.jll.com/financialservices to learn more.

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