Why Talent Attraction and Retention Is Now the Top Challenge for Insurers — and What to Do About It

By: Sarah Penny

As UK insurers face another year of scaling challenges, one issue is rising above the rest. The UK insurance market is battling a significant talent shortage, with talent attraction and retention now ranking as the top business challenge for 2026 according to our annual whitepaper, The Carrier Perspective: 2026 Claims Insights. This marks a sharp increase from last year, when it ranked seventh.

The 2026 Claims Insights whitepaper saw 72% of UK respondents report an increased difficulty in finding qualified candidates, while 48% reported that claims management and adjusting are facing the most acute shortages.

The notable shift indicates a direct impact on strategic priorities and places sustained pressure on operational performance across the market.

What's changed in the last 12 months?

With claims becoming more complex, the demand for more specialised expertise is higher than ever before, limiting entry pathways into the insurance sector for graduate or less-experienced workers. Not only does this demand for expertise increase challenges in attracting new talent, it also puts more reliance on an ageing workforce.

As a result, the retirement of experienced and qualified handlers is having a greater impact, causing a recurrent loss of expertise and technical experience without an adequate plan for succession. Replacing expertise is far harder than replacing headcount. New hires require longer ramp‑up periods, placing sustained pressure on already stretched teams.

So, what can insurers do? We look at some of the strategies insurers are exploring to counter talent shortages, deepen expertise and ensure resources are readily available when needed.

Adjusting hiring practices to look beyond

The challenge of finding qualified candidates has become significant, but rather than looking for traditionally qualified candidates, leading organisations are adopting the 'grow your own' strategy. This strategy emphasises recruiting talent based primarily on customer service skills and behaviours and then developing their industry expertise through everyday work and academic training. This approach shows that technical skills can be learned, but a customer-focused mindset and company-aligned behaviours are harder to cultivate.

At Gallagher Bassett, we've seen the benefits of hiring from outside the insurance industry and how it can help diversify expertise, enabling a more customised support and approach. Recruiting talent directly from client industries — such as selecting someone with retail experience to support retail clients — can provide sector-specific perspectives and skills and help to address distinct challenges.

Leveraging strategic partnerships for resource management

A strategic partnership can provide insurers with a sustained source of talent both in the short and long term, ensuring business priorities are met efficiently. As such, proactively addressing a talent shortage with expert-led support that can begin swiftly and scale as required is becoming a key resource management strategy across the industry.

Last year, Gallagher Bassett's Ashley Easen, managing director of Consulting Solutions, discussed how Burst Resourcing has become crucial to her division's strategy in helping insurers navigate the talent shortage with precision and consistency.

"Six out of 10 UK insurers have told us that labour market conditions are directly affecting their ability to grow and manage claims efficiently," Easen explained. "That's why we've made it a priority to evolve our Burst Resourcing function, to help clients respond quickly and effectively when they need it most. Over the past year, we've seen an 86.7% increase in Burst Resource days and a 177% rise in claims actioned. These figures reflect how our clients are leveraging our services to fill skill gaps, reduce overheads, and improve operational efficiency."

These observations underpin the importance of having access to additional resources as readily available reinforcement in times of urgency as well as to ensure that customer service standards are being upheld and claims backlogs do not become insurmountable. This readiness is particularly pertinent as the complexity and volume of claims continues to rise, causing even more strain on existing resources.

Evolving employee retention strategies for UK insurers

As pressures on attraction mount, the value of retention becomes clear. Insurers across the UK are shifting retention strategies, prioritising investment in training and development over raising wages and bonuses. Gallagher Bassett's market observations indicate that leading organisations are now adopting strategies of hybrid work models and hiring based on aptitude and mindset.

When it comes to flexible working arrangements, hybrid work models have become a baseline expectation for attracting talent. According to our 2026 Claims Insights whitepaper, 63% of UK insurers said it is their preferred structure. In addition to this model's significant upsides — such as increased productivity and reduced costs — hybrid working enables organisations to access a wider talent pool geographically, creating more opportunities for hiring quality talent.

Many of our employees here at Gallagher Bassett have shared how flexibility, training and development, and mentoring have allowed them to diversify and hone their professional skills, leading them to establish a long-term career trajectory that's both exciting and fulfilling.

Simply finding the right candidate isn't enough anymore, and the 2026 Claims Insights whitepaper demonstrated that even if it were, it's more easily said than done in today's talent climate. Finding a strategic partner that's adapted early to the trends emerging now as the keys to talent attraction and retention is a singular solution when it comes to building a sustainable and easily accessible workforce with deep expertise and diverse skills to counter the current talent problem the industry is facing.

Connect with us today to learn more about how a strategic partnership with Gallagher Bassett can expand your talent pool and ensure client service excellence.

The complimentary edition of The Carrier Perspective: 2026 Claims Insights is available now. Discover indispensable insights and key takeaways to help your organisation thrive and overcome the challenges facing the insurance industry in 2026.