AI and the talent tipping point

Few will disagree that the transformation seen over the past decade, accelerated by the rapid uptick and (seemingly all-consuming) integration of artificial intelligence (AI) in everyday life, has changed so much of life as we knew it. This has become increasingly evident since the release of ChatGPT on November 30, 2022. The potential consequences are incomprehensible – and frankly overwhelming.

With information more accessible than ever, the automation of tasks is becoming more sophisticated in shorter and shorter time frames, and the debated topic of whether an unconscious (we hope!) machine can outsmart human intelligence persists. Yet one urgent question lingers: What effect will AI have on talent moving forward?

Losing the learning curve

Data collected from Bermuda:Re+ILS’s 2025 Rising Stars survey revealed that 55% of respondents believe that expertise in digital tools and data analytics will be of utmost importance for the next generation of re/insurance professionals, outweighing skillsets in specific lines of business or available vehicles for risk protection or transfer. One professional even outlined the greatest challenge for the next generation of re/insurance leaders as: “Leading in an AI-driven world, learning the pitfalls and possibilities that AI provides us and taking advantage of them”.

The repercussions of AI’s adoption have already reshaped the labour market and will continue to do so moving forward, and the re/insurance sector is no exception.

Could automation erase the foundations?

In July 2023, the OECD released a report, titled ‘Artificial Intelligence and the Labour Market’, which succinctly stated the issue at hand in its key findings:

“AI’s improving ability to complete these non-routine tasks raises new worries of job displacement for occupations previously thought impervious to automation. Occupations in finance, medicine and legal activities, which often require many years of education, and whose core functions rely on accumulated experience to reach decisions, may suddenly find themselves at risk of automation from AI.”

Delving into the concerns AI poses to human talent, the report notes that: “The potential for substitution remains significant, raising fears of decreasing wages and job losses. Taking the effect of AI into account, occupations at highest risk of automation account for about 27% of employment.” Given that AI’s adoption in the workplace is usually hailed for its ability to automate time-consuming tasks – tasks that are often performed by more junior members of staff at the beginning of their careers – this risk could threaten the talent pipeline.

If entry-level jobs are reduced due to the implementation of AI systems, not only does this narrow opportunities for those coming into the market, but it will, in time, limit the available leaders for the next generation. Considering that today’s talent market is already dubbed as problematic, and with Bermuda’s unique microecosystem – a small but globally integrated market competing for a limited pool of expertise – creating even tighter circles for talent availability, the prospect of the future looks bleak for upcomers yet to reach the job market.

However, the impact of AI on entry-level opportunity is not uniform. In larger markets such as London or New York, automation might compress certain administrative roles; in emerging markets, it could open entirely new paths as insurers leapfrog legacy systems. For Gen Z entrants, the promise of working with advanced tools might be as compelling as the risk of job displacement.

Soft skills, hard currency

Beyond the entry-level conundrum, the report, which surveyed more than 2,000 employers and 5,300 workers, went on to reveal that: “For the time being, more than replacing jobs, AI is changing them and the skills that are required to carry them out. According to employers, AI has increased the importance of specialised AI skills but it has increased the importance of human skills even more. Two out of five employers consider that the lack of adequate AI-related skills is a barrier.”

Considering the rapid evolution of AI’s use since July 2023, this effect can only have intensified.

Even as technical fluency becomes critical, reports consistently show that the most valuable abilities of the future remain inherently human: critical thinking, ethical judgment, empathy and communication. As AI systems take over routine tasks, the value of professionals who can interpret, explain and apply AI-driven insights will only increase.

Building digital talent

Looking specifically at the impacts of AI on the insurance industry, McKinsey’s July 2025 report, ‘The future of AI in the insurance industry,’ acknowledged AI’s capacity to “truly transform the insurance industry”.

In explanation, the report states: “At its core, insurance involves gaining an accurate understanding of the underlying risk, and effectively and empathetically assisting people in distress as efficiently as possible. AI can transform all this: Traditional analytical AI understands patterns in data; gen AI enhances those capabilities with greater understanding of unstructured data forms and enables the addition of hyper-personalisation and empathy into responses; and the latest advances in agentic AI add unprecedented levels of automation to complex workflows, allowing insurers to maximise benefits.”

This outlook brings more optimism, as leveraging these capabilities could broaden the opportunities horizon if upcoming talent and rising stars learn the skillsets needed to take AI implementation by the reins. McKinsey’s report stressed the importance for insurers to “build their talent bench by having a strong in-house digital talent pool, with ideally 70 to 80 per cent of digital talent being in-house”.

Across the market, insurers and reinsurers are beginning to respond. From Lloyd’s “FutureMinds” and Swiss Re’s digital-skills academies to ILS Bermuda’s education initiatives, firms are re-evaluating how they attract, train and retain digital-literate professionals. The challenge is not only hiring data scientists but ensuring that every underwriter, broker and claims specialist understands how to work effectively with AI tools.

From fear to fluency

Rather than looking at the integration of AI systems as a roadblock to opportunity, McKinsey foresees “a new era in which the workforce is made up of humans and AI agents, a development that will require organisational practices to evolve.”

This is a sentiment shared by many, including The Economist Group, based on findings in its 2025 report ‘Underwriting the future: the role of artificial intelligence in insurance’. The introduction of the report dives straight in, citing: “Jodie Wallis, global chief analytics officer at Manulife, sees a world in which insurers’ workforces will become hybrids of human employees and agents collaborating closely, with some agents working largely independently under human oversight.”

Regulators are also sharpening their focus on AI transparency and governance. From the EU’s AI Act to the Bermuda Monetary Authority’s emphasis on responsible data usage, compliance is becoming a new dimension of talent capability – one that will increasingly shape how the industry hires and trains its people.

The report highlights three key findings: “Short of a transformation, AI is so far delivering incremental gains; AI creates value, but insurers struggle to capture it; Organisational agility is essential to address technology, governance and regulatory challenges.” Used wisely, these insights suggest that the next generation of re/insurance professionals needs not fear automation. Instead, by mastering AI’s tools and understanding its limits, it can build a more agile, data-driven and resilient industry than ever before.

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