The insurance impact of skills gaps
Skills shortages and skills gaps are no longer just workforce challenges – they are emerging risk factors with direct implications for the (re)insurance sector. As industries struggle to fill critical roles, the likelihood of operational errors, liability claims, and systemic disruptions increases. Understanding how these talent deficits translate into rising exposures is key to anticipating future claims trends.
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Jobs and the qualifications required to perform them have remained relatively stable for a long time. Now they are evolving at a rapid pace, as technological developments, globalisation and changing market demands are rapidly changing today's jobs and the skills required to fill them. Over the years, this has led to a global skills shortage.
Why the skills gap Is growing
In addition to rapid technological change and shifting market demands, the demographic shift towards ageing societies is further exacerbating the problems. As a result, skills shortages and skills gaps are a much bigger problem than before.
Skills gaps and shortages can arise for various reasons, including:
- Rapid technological advancements outpacing the development of corresponding skills in the workforce
- Evolving industry needs caused by shifts in market conditions, consumer preferences or industry trends
- Inadequate education and training systems, or a mismatch between the skills taught and those needed by employers
- Geographic or sectoral imbalances, where skilled workers may be concentrated in specific locations, while shortages persist elsewhere
The economic toll of missing skills
The global talent shortage is not slowing down. Researchers expect an 85-million-person shortage by 2030. This skill shortage could lead to a collective USD 8.5 trillion loss in potential annual revenue in 2030. That is approximately USD 1 million in unrealised revenue for each unfilled position. Several industries are particularly affected by the skills gap due to their specific demands for highly specialised or rapidly evolving skill sets.
Some of the industries most impacted by the skills gap include:
- Healthcare
- Construction
- Engineering
- Information technology (IT) and software development
- Financial services
Skills shortages in healthcare
The healthcare industry requires a highly skilled workforce, including doctors, nurses, medical technicians, and healthcare administrators. In view of advances in medical technology and the ageing population, the need for specialised healthcare professionals is increasing, leading to a skills gap in most countries. The World Health Organization (WHO) estimates a projected shortfall of 10 million health workers by 2030.
Business resilience under pressure
The problem of skills shortages is a major challenge in today's labour market, affecting employers and jobseekers alike. A shortage of skilled labour can have a significant impact on both companies and the economy in general. The shortage of skilled labour harbours real risks for the future viability of companies. They are not inherently equipped to manage such risks. Looking to the future, it is therefore important to proactively prepare for the new requirements that will shape the labour market. Identifying the skills in demand and adapting strategies to address evolving staff and skills shortages are key to maintaining competitiveness and ensuring success in the dynamic world of work.
Skills shortages as a driver of insurable risk
From the insurance industry's perspective, skilled labour shortages are potential sources of claims. For example, they can lead to problems in technical work processes, as employees may lack the expertise to operate and maintain modern machines and technologies. This can lead to longer downtimes, production delays and higher costs. A lack of skilled labour with detailed knowledge and experience increases the likelihood of machines being used incorrectly and process routines not being followed, increasing the likelihood of workplace accidents, among other things.
Medical malpractice: A growing risk
Many healthcare systems around the world have been chronically underfunded for years. This development is largely independent of the respective health insurance system. The consequences are often non-existent or technically outdated medical technology, but above all an almost universal strategy of cost-cutting. Staff are being cut; vacancies are not being filled or are being filled with less qualified staff. Chronic work overload, inadequate medical-technical training and often poor pay have led to a situation of substantial staff shortages. This combination of staff shortages, overwork, and inadequate qualifications creates ideal conditions for medical malpractice claims. It is to be expected that all these circumstances will lead to an increase in such claims. In the long term, this could also lead to an increase in morbidity, mortality and associated claims.