How the UK’s Economic Situation is Reshaping Recruitment in the Insurance Sector

The UK is facing a challenging economic climate in 2025. Inflation remains high, interest rates are uncertain, and supply chains are still adjusting. These trends affect us all, but they create unique pressures within the insurance industry – especially with regard to staffing and recruitment.

Inflation and Rising Costs in Claims

The cost of claims is increasing. According to PwC, inflation is lifting cost-bases for insurance payouts, and tariffs are increasing the cost of raw materials which is pushing up repair and replacement costs in turn.

As a result, insurers face tighter margins and greater pressure to control costs.

Under this pressure, some companies may be pausing recruitment. They may also limit raises or shifting roles to lower‑cost areas. For recruiters, this means fewer open vacancies but it may also shift demand towards finance, claims negotiation, and cost control roles that help manage claims costs.

Technology: A Double‑Edged Sword

Insurers are investing heavily in digital tools. PwC name “an increasingly digital and AI‑driven world” among key trends shaping 2025. Many insurers are hiring tech and AI experts to implement digital transformation and automation, easing administrative burdens.

But this technology also reduces some roles. Routine jobs like claims entry or basic data tasks are shrinking. This means recruiters must pivot quickly - employers are now looking for people with advanced digital and analytical skills who can also handle AI and digital systems. They need strong soft skills, like communication and critical thinking too.

The Rise of “Silent AI” Risk and Legal Uncertainty

AI is bringing with it new professional risk. Kennedys Law highlights “Silent AI” - gaps where AI‑related losses may not be clearly covered or excluded in policies. This creates liability challenges with questions arising around who is responsible: the professional user, the AI developer, or both?

Recruiters see growing demand for legal, compliance and risk professionals. Firms are seeking expertise to clarify AI policy terms and manage AI‑driven risks. Talent in legal or professional indemnity fields will be highly sought‑after.

Brokers Seek Better Support from Insurers

In 2025, brokers report strong business ahead. A recent Insurance Times survey found 94% of brokers expect growth, et they call for more support from insurers. Brokerage complaints include slow responses, inefficient prioritising, and a need for flexible tech and pricing.

Recruiters may see new roles focused on broker‑insurer liaison. Firms will want staff who build strong relationships and promote speedy communication. They may hire people with commercial acumen to develop supportive systems. There may also be roles tied to digital platforms and dynamic pricing.

Talent Shortages, an Aging Workforce, and the ‘War for Talent’

PwC’s article highlights an ageing insurance workforce and difficulty attracting new talent.

Despite fears of automation, insurers still need the “human touch” in customer‑facing roles, so this is a pressing issue.

Recruiters face a tricky balance. They must fill urgent frontline roles while, at the same time, aiming to attract people to less visible but essential functions such as underwriting or compliance. Firms are investing in training programmes in AI literacy, soft skills development, mental health, flexible hours, and mentorship.

Business Models Are Switching Towards Ecosystems and ESG

PwC also describes an insurance shift towards digital ecosystems, sustainability, and customer‑centric models.

Firms are building partnerships across tech, claims services, and community projects.

To support these shifts, recruiters will help insurers hire for brand new roles. These include Environmental, Social, and Governance leads, partnerships managers, data strategists, and sustainability analysts. Talent with cross‑industry experience will be in high demand.

Implications for Recruiters in the Insurance Sector

Recruiters will have to stay agile. Vacancy demand is changing fast. Roles focusing on risk, compliance, data, and digital transformation will grow while traditional roles may decline.

Insurers need staff with both tech understanding and strong interpersonal skills. Careful candidate screening is essential with an emphasis on soft skills and a digital-human blend.

Firms are also investing in re‑skilling, mentorship, flexible working, and mental health benefits. Recruiters can highlight these to attract talent, but job specs must also reflect any new requirements: AI awareness, risk management, ecosystem partnerships, and ESG priorities.

Creating a close partnership with hiring managers will be vital. Recruiters should be coaching insurers re market trends and candidate expectations. The hiring process should be faster, more adaptive, and more targeted.

Final Thoughts

The current economic backdrop affects insurance recruitment in many ways. Rising costs, inflation, automation, and legal uncertainty mean the sector's staffing needs are shifting. Growth areas include risk management, AI policy, digital transformation, frontline sales and partnerships.

As recruiters, we have a vital role to play. Our expertise can guide insurers through this widely-evolving landscape. By staying informed and proactive, we can ensure our clients remain competitive, well‑staffed, and future‑ready.