82% of insurance executives agree the digital revolution is driving a new era of corporate economic structure.

Insurance is on the cusp of a skills crisis as it struggles to attract ‘born digital’ professionals to join the industry, and faces the retirement of a vast part of its existing workforce over the next few years. The Insurance Information Institute, a US-based industry association, estimates that half of the country’s insurance workforce is aged 45 or above. A quarter of them are expected to retire by 2018.

What’s more, many insurers are finding that their existing workforces lack skills in customer experience, analytics, AI and other digital competencies they need to remain relevant in a changing market. As traditional roles are automated, insurers’ workforces may shrink, but the people will need to be more tech-savvy, creative, analytic, customer-centric and entrepreneurial. There will be new roles for people building AI customer experiences or orchestrating ecosystem partnerships.

Insurers are keenly aware that they need to rethink their approach to talent to thrive against this backdrop of digital disruption. Of the insurance executives we surveyed, 62 percent indicated they plan to increase their organization’s use of independent freelance workers over the next year. And nearly 79 percent said their organizations are under competitive pressure to extend innovation into their workforce and corporate structure.

These offerings enable insurers to quickly look internally or to the external labor market to meet the demand for skills. They offer efficient ways for insurers to plug gaps in their own capabilities—for example, accessing top UX or data science skills on-demand—and to efficiently speed new products or initiatives to market.

Some insurers are already leveraging technology solutions that efficiently match the supply and demand for people and skills. When State Farm wanted to test whether dashboard cameras could detect driver distraction and automatically alert the driver, it crowdsourced machine learning solutions through a contest on the Kaggle platform.30 Other insurers such as Allstate and AXA have also used Kaggle.

On-demand labor platforms like Freelancer and Gigster, which also provide online work management solutions, enable insurers to virtualize part of the workforce. Nextgeneration digital tools like Slack and Google Hangouts, meanwhile, orchestrate communication for newly virtualized and distributed workplace environments. Taken together, this allows insurers to efficiently plan, manage and oversee the remote execution of work, in turn enabling companies to leverage both internal and external workers—the blended workforce. This means that they can, for example, continue to draw on retired workers who wish to work part-time or pull in the skills of high-end professionals as needed.