A shortage of experienced underwriting talent has handicapped property and casualty (P&C) insurers across Canada, adding further adversity on top of the surging catastrophic claims and financial losses caused by extreme weather events they are already experiencing. 

“Everybody's really busy. It's hard to get the work done because in some instances there just aren't enough underwriters doing the work,” says Anne Kleffner, professor of risk management and insurance at the University of Calgary’s Haskayne School of Business. 

The shortage of underwriters has firms worrying about being negatively impacted by longer times to turn around a quote or deliver an underwriting decision, says Jessica Lewis, a partner in financial services consulting at PricewaterhouseCoopers (PwC) in Toronto.

Moreover, she notes, it is harder to find the very specialized commercial underwriting talent required to analyze more complex risks. 

A key factor contributing to the talent crunch for qualified underwriters, which was sparked during the COVID-19 pandemic, is demographics. Just as many experienced underwriters from the baby boom generation are retiring from the workforce, many younger workers, or potential employees who could replace them over the longer term, see underwriting as less desirable than other career opportunities, says Lewis.

The technology sector, for example, is sometimes perceived as providing a more exciting or varied career path. Younger people are also attracted to industries they see as offering more perks with regard to hybrid working conditions, compared to having to work in the office three or four days a week, as well as the presence of personal wellness programs, and more flexibility to move in the organization, Lewis explains. 

This trend has been particularly acute at the junior levels – for example, among underwriters with two or three years of industry experience, she adds. 

The work process itself can also be problematic. 

“Younger people entering the workplace can often be surprised at how manual some of the work feels,” says Lewis. “And so we've worked on [issues like], How do you streamline the work? How do you make it so that someone who's coming into it doesn't look at it and [say], ‘There are all of these issues in how we're working. We're working across antiquated systems. It's taking a long time just to do a simple task.’”

Evolving recruitment strategies 

The underwriting shortage has impacted insurers’ recruitment strategies, with talent a key area of focus.

“We’ve worked with a couple of P&C carriers that have rotational programs, or are focusing on trying to build a hybrid working environment where you can still get that on the job talent development or team environment, but [with firms also] trying to provide more flexibility to their people,” says Lewis. 

She also notes there is now more job coaching, including partnering newer underwriters with those that are more experienced to help them learn more quickly on the job and provide enhanced opportunities to move forward.

“One of the things we've done with an insurer was redesign the entire underwriter hierarchy in their team so that someone coming in goes, within two, three years, from a junior underwriter to a small market underwriter, then can be a mid-market underwriter. Then there's a path to becoming a technical consultant and supporting complex cases,” Lewis says. 

She has also worked with insurers who have offered better compensation programs for high performers as an incentive.

Investments in newer technology are also being used to attract employees. 

Lewis says that major insurers in Canada and globally are looking at modernizing their core technology systems, such as, for example, moving some of those technologies to the cloud, and examining the possibility of automating certain underwriting activities entirely. 

“On the personal line side, we're seeing much more of a move to stricter, rules-based decisioning that allows for a seamless, quick and easy customer experience where you can get your policy almost instantly. Both brokers and direct insurers have moved in this direction. On the commercial side we haven't moved in that direction yet, but it's all about investing in technology to allow underwriters to assess requests and move towards faster, more accurate decisioning,” she says.

Although such investments cost money, they also provide the company with important potential benefits, such as improved responsiveness, accuracy and pricing in areas that firms want to underwrite, and this can also lead to improved market share, Lewis adds. 

Another example is that agentic artificial intelligence (AI) is starting to be introduced into the underwriting process to support teams in reviewing documentation, reconciling data, and sending responses to brokers, she says. Insurers are looking at how they can redesign underwriting activities to provide underwriters with prompts on the risk assessment process to help them streamline some of their information gathering and respond more quickly back to the broker. As in all industries that are being disrupted by AI, insurers are examining how they can use this new technology to support and enhance the output of their key processes.

“They're trying to show that they have more modern ways of working to those coming into the workforce,” Lewis explains. 

Underwriting a key function 

P&C insurers are struggling with the losses they are paying for natural disasters, related to climate change. This impacts premiums, which affects both firms and homeowners, and has created a big concern which is ultimately having at least a marginal impact on the willingness of insurers to underwrite those risks, says Kleffner.

The effects of climate change, creating extreme weather events, makes it harder for even very experienced underwriters with a depth of knowledge to understand what the financial impact of those events will be. Furthermore, these risks are changing, which increases the hardship because insurers can’t rely on past history, says Kleffner.

Cyber risk is also much more pronounced today than it was even a few years ago. “It’s not so much if an attack can happen, it's when attacks happen, and being able to identify how different industries [insurers] work with will be impacted,” Lewis says. 

Such events are triggering a much higher rate of catastrophic losses, which negatively impact profitability, she adds.

The Insurance Institute of Canada, in its Spring 2025 Quarterly Review, says “Estimates are that the annual severe weather claims paid by insurers in Canada could more than double from 2020 to 2030, increasing from $2.1 billion to $5 billion a year. In 2024, Canada paid out $9 billion in claims.”

“Underwriting has always been arguably more art than science,” says Martin Halek, an associate professor of risk management at the University of Calgary’s Haskayne School of Business. 

“But you need people who are talented and…who can see the big picture. They're really the gatekeepers for the insurers. They’re not only evaluating the appropriate price for that risk, but also putting together a portfolio of risks that is acceptable for that insurance company,” he adds. 

Halek notes that the insurance industry is very complex, with a lot of layers. For example, much of what primary insurers can do is sometimes significantly impacted by their ability to access the reinsurance markets. This can also affect profitability. “For example, if the primary insurer is hesitant about certain risks that the underwriters have accepted, they can buy more reinsurance, but that costs money,” he says. 

“We’re not at some sort of crisis moment in terms of insurers selling homeowners insurance or anything,” says Kleffner. “But it's really become a critical problem for them, because as the losses keep going up, the premiums keep going up, and that doesn't make consumers very happy.

“But the reality is, if they don't charge enough to pay for the losses, then we don't have insurers to write the business. [And] so I would say that's really the most significant impact that it's having on their overall bottom line,” she adds. 

Opportunity for the future 

Halek says the shortage of experienced underwriters provides opportunity for business school students because there is significant demand for the skills they are being taught, and those skills have become even more critical as the industry experiences more emerging risks. 

“I think the industry is certainly doing their best to reach out to recruit talent from wherever they can find these skills. We’re one of the main suppliers of that talent,” he explains. 

The insurance industry has developed “quite an active outreach to try to get people to realize it's actually a great industry to work in,” says Kleffner.