A survey of insurance leaders has found wide agreement that artificial intelligence will lead to staff headcounts being cut substantially in coming years.

About three-quarters of executives expect reductions of up to 20% within five years, the research by consultancy The Bridge International finds.

A further 14% foresee cuts of 20%-50%, and only 12% believe AI will have no impact.

“AI is set to redefine the insurance workforce,” the Heartbeat of General Insurance Report says. “Workforce transformation is no longer a question of if, but how fast.”

The survey – held in partnership with the Australian and New Zealand Institute of Insurance and Finance – found 45% of respondents rank the economy and regulation as their top business concerns. Technology is named by 42%, and catastrophe and climate exposure ranks third on 33%.

About 39% of respondents have looked to change roles in the past year, and 46% have considered leaving the industry.

Succession planning is “emerging as a major vulnerability”, with only 17% of respondents at large insurers and 6% at mid-size groups “very confident” in their talent pipelines.  

The Bridge MD Stuart Blake said: “While there is strong confidence in the transformative potential of technology and AI, we’re seeing serious concerns about talent retention and leadership succession.

“Organisations that will thrive in this increasingly challenging environment are those that recognise leadership, culture and customer intimacy as their primary differentiator – not just technology or scale.

“Now is the time for decisive leadership: CEOs who act boldly, cutting through complexity, accelerating digital transformation and investing in talent.”

About two-thirds of respondents say technology-driven efficiency is their biggest area of focus, and AI and data literacy is considered of high importance by all respondents.

Mr Blake says a wave of retirements is expected over the next five to 10 years, and intentions to exit the sector are growing.

“What came through in our survey was pretty staggering on some of the numbers around succession planning,” he told insuranceNEWS.com.au. “The biggest challenge and the biggest opportunity is around AI tech and data-driven opportunities, but then quickly off the back of that, the biggest concern is around people and culture.

“With the bigger take-up of technology and digital, a lot of those entry roles are being impacted and that’s been the breeding ground for future insurance professionals.

“Retaining expertise while driving innovation will be pivotal to sustaining competitiveness and resilience.”

ANZIIF CEO Katrina Shanks says the industry cannot overlook the talent risks and succession gaps highlighted in the findings.  

“We are optimistic about technology, digital transformation and new ways of working ... Now is the moment for insurers to lean into leadership, capability development and meaningful workforce investment,” she said.

See the report here. A free webinar examining findings from this year’s Heartbeat report will be held on Thursday.