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AI-Powered Underwriting and Claims Can Address the ‘Silver Tsunami’ in Insurance

P&C INSIGHTS BLOG | February 24, 2025

The Gradient AI Team

AI-Powered Underwriting and Claims Management

In an Industry Where Human Expertise is the Backbone of Operations, How Can Insurers Sustain Growth While Overcoming a Widening Talent Gap?

The Property and Casualty insurance industry is at a crossroads. On one hand, it continues to experience strong financial growth, with direct premiums written rising nearly 10% in 2024, following a 10.4% increase in 2023. And AM Best projects a 7.3% increase in net premiums written in 2025.¹

On the other hand, insurers are facing more difficulties in hiring and retaining talent, particularly in underwriting and claims management. Experienced underwriters and claims adjusters are retiring at a significant rate² , and they’re creating a talent and skills gap. Sometimes dubbed the “Silver Tsunami”,³ this wave of retirements threatens to leave insurers struggling to maintain talent in an industry where nuanced decision-making is critical.

As insurers look to address this skilled labor shortage, AI-powered underwriting and claims management solutions are emerging as key tools to support efficiency, consistency, and knowledge transfer.

Just over two years ago, Gradient AI conducted a webinar, featuring a panel of industry practitioners, which looked into industry labor trends and the challenges insurers were facing at the time to recruit and retain talented employees. The panelists discussed the AI solutions they were considering in order to bridge the talent gap. As it turns out, this insurance workforce issue has only grown bigger.

In this post, we explore the P&C insurance industry talent gap issue in 2025 and dive into potential AI-based solutions.

The P&C Insurance Talent Shortage: A Growing Concern

Recruitment and retention have become critical pain points for insurers. Recent studies have found that 52% of P&C insurance carriers plan to expand their workforce in the next 12 months, driven primarily by anticipated business growth.⁴ However, hiring is becoming increasingly difficult, with 48% of companies reporting greater challenges in recruitment compared to prior years.⁵

One of the key drivers behind the talent shortage is the aging demographic of the insurance workforce. The median age of insurance employees is significantly higher than in other financial sectors, meaning a wave of retirements is imminent:

Over the next 15 years, 50% of the current insurance workforce is expected to retire, leaving more than 400,000 positions unfilled⁶
The number of insurance professionals aged 55 and older has increased 74% over the past decade
Only 27% of insurance professionals are under the age of 35, highlighting the industry's struggle to attract young talent ⁷

As veteran employees retire, they take with them decades of institutional knowledge. The insurance industry relies heavily on human expertise for underwriting, claims adjudication, and risk assessment. Losing this expertise could have significant financial and operational consequences.

On the other end of the spectrum, although the demand for experienced underwriters and claims adjusters remains high, fewer professionals are entering the field. Millennials are showing little interest in working for insurance and insurance-related organizations. The Hartford’s 2015 Millennial Leadership Survey found that just 4% of millennials were considering a career in insurance.⁸ Another survey conducted by Vertafore showed a drop over the past 4 years of insurance pros who would recommend a career in the industry to a friend (from 85% in 2021 to 65% in 2024).⁹

AI May Be the Key to Retaining Institutional Knowledge and Enhancing Productivity

With a shrinking workforce and a widening experience gap, insurers should consider leveraging AI tools to bridge the divide. AI-powered underwriting and claims solutions can help capture, retain, and transfer institutional knowledge, ensuring that new employees can quickly develop expertise while minimizing operational disruptions.

Here’s how AI can help insurers address the talent crisis:

Capturing institutional knowledge. AI can analyze historical underwriting decisions and codify best practices, preserving expertise even as senior underwriters retire.
Enhancing decision support. Machine learning models provide real-time risk analysis, enabling newer underwriters to make informed decisions with greater confidence.
Providing additional insight and guardrails for underwriters and adjusters. By identifying potential actions and providing rationale, AI can act as an on-demand mentor, enhancing decision-making for novice adjusters. For underwriters, AI can suggest pricing adjustments based on nuanced factors like regional crime rates or industry-specific risks, supporting greater overall accuracy.
Improving operational efficiency. AI-driven underwriting and claims tools can automate routine tasks, allowing insurance pros to focus on complex cases that require human judgment.

Let’s consider a specific example of a new underwriter entering the industry. Traditionally, it would take years of experience reviewing applications, pricing policies, and analyzing loss ratios before they could become highly proficient.

AI accelerates this learning process by analyzing vast datasets—AI models ingest millions of past policies, claims, and outcomes to identify patterns and trends. While a seasoned underwriter may review thousands of policy applications in their career and remember only a handful, an AI model can analyze tens of millions of historical policies, learning from every single one. In short, AI replicates human learning but at an exponentially greater scale.

The Real-World Impact of AI

Some insurers are already leveraging AI to address talent shortages. For example, at Builders Mutual Insurance, AI is transforming how new adjusters are trained. Ken Bunn, VP of Claims at Builders Mutual, explained:

“Previously, new adjusters had to sit beside an experienced adjuster for years to observe claims handling. Now, thanks to integrated AI solutions, our newest adjusters can learn quickly and have guardrails in place as they make decisions. AI captures all the experience that could otherwise walk out the door and be lost. Instead, it’s retained in our models for future generations of adjusters.”

AI solutions allow insurers to train new employees more effectively, reduce errors, and enhance decision-making—providing a “virtual tap on the shoulder” when needed—without requiring new professionals to have years of on-the-job experience.

Conclusion: The Future of Insurance Will Be a Hybrid of AI-Driven Intelligence and Human Expertise

The P&C insurance industry is standing at a pivotal moment. With a growing percentage of employees approaching retirement, recruiting and retaining skilled professionals has become a critical challenge.

Fortunately, by integrating AI into underwriting and claims management, insurers can:

Retain institutional knowledge despite retirements
Enhance employee productivity and decision-making
Reduce training time for new hires
Improve profitability through better risk assessment and automation

According to a global survey conducted by research firm PwC, 54% of CEOs in the insurance and reinsurance sector have in fact observed improvements in employee efficiency thanks to AI and generative AI.¹⁰

The future of the P&C insurance workforce will be a hybrid of AI-driven intelligence and human expertise. While AI cannot replace human expertise, it can serve as a co-pilot, helping insurers navigate the changing workforce landscape. Those who embrace this shift will not only overcome current labor challenges but also position themselves for long-term success.

Are You Ready to Leverage AI for Your Workforce Challenges?

Gradient AI helps insurers harness the power of AI to enhance underwriting, claims management, and operational efficiency.Contact us today to learn how AI can future-proof your workforce and drive long-term success.