Adapting Insurance Talent Models for a More Volatile, Tech-Driven Market

This article first appeared in Carrier Management.

By Peter Crowe and Nick Lamparelli

Insurance carriers are operating in a period of structural volatility. Catastrophe events are more frequent and severe, customer expectations continue to rise, operational costs are climbing, and nearly every insurer is dealing with a workforce that is simultaneously aging and underskilled for a digital future. Against this backdrop, the traditional staffing model—large, fixed internal teams with slow hiring cycles—has become misaligned with the pace and unpredictability of today’s insurance landscape.

To remain competitive, carriers need a workforce model that can expand, contract, reorganize and modernize quickly without compromising culture or compliance, or creating a disjointed customer experience. A growing number of insurers are adopting what we call Elastic Staffing. This is a structural approach that blends a lean internal leadership core, integrated vendor-partners and technology. Elastic Staffing is a fundamental redesign of how insurance work is organized and governed, and remains adaptable–the key to continually evolving with the future of work.

Why Traditional Insurance Staffing Models Are Breaking Down

The challenges facing insurers are well-documented:

• A shrinking talent pipeline. The industry has been in a talent crisis since the Boomer Generation began retiring, and it has been accelerating for quite some time. Digital skills remain scarce across the industry.
• Cost pressure and inflation. Loss adjustment, litigation and reinsurance costs have risen faster than many carriers can offset through rate increases.
• Volatility volume patterns. CAT events, economic cycles, and market entry and exit strategies create sharp swings in capacity.
• Technology demands. Automation, AI and cloud modernization require new capabilities, and many internal teams cannot scale on their own.
• Rising customer expectations. Policyholders and agents expect fast, intuitive, omnichannel service.

These constraints make operations structurally mismatched to the rhythm of modern risk. CAT-driven surges, unpredictable submission cycles and fast-moving customer expectations demand a workforce that can stretch, contract and reconfigure without friction. Companies relying on recruiting alone will be outmaneuvered by those who are re-engineering their operating models for flexibility.

What Is Elastic Staffing?

Elastic Staffing is an operating model that combines three interdependent components:

1. A lean internal core focused on leadership, judgment, governance, culture and complex exception handling. This would include the senior leadership team and a lean, efficient structure of direct reports.
2. Integrated vendor partners who function as extensions of the carrier’s team. These partners are very different from traditional outsourcers.
3. Technology and automation that absorb routine, rules-based work, freeing humans for higher-value tasks and enabling upskilling to manage and optimize the performance of AI-powered, automated workflows.

The model offers flexibility without sacrificing quality, control or brand integrity. Properly implemented Elastic Staffing increases operational resilience, accelerates change and improves cost efficiency.

The Lean Core Team: Strategy and Culture Anchors

At the heart of Elastic Staffing is a lean core team composed of senior leaders and key strategists who define the company’s vision, culture and long-term direction. This team is responsible for stewarding the organizational values, setting strategic priorities and maintaining cohesion across distributed workforces. Their role is less about day-to-day execution and more about guiding the overall business, ensuring alignment with market demands and regulatory requirements, and cultivating a culture of innovation and accountability.

This core team typically includes executives, senior underwriters, actuarial leaders and heads of critical functions who provide the intellectual capital and leadership continuity essential for sustained competitive advantage.

By keeping this group lean, carriers reduce fixed labor costs and minimize risks associated with workforce fluctuations while maintaining strong internal governance.

Vendor Partners as an Extension of the Team (Not ‘Outsourcing’)

Beyond the core, the model incorporates a first line of direct reports who execute operational functions in close collaboration with vendor partners. These vendor partners are not traditional outsourcing entities; they are integrated collaborators who assume responsibilities and accountabilities equivalent to those of full-time employees. A firm would not be outsourcing; instead, it would augment direct reports with staff, as if those resources were on the team.

Technology as the Third Pillar

Technology serves as both a force multiplier and an enabler of efficiency. Automation, artificial intelligence (AI) and machine learning are increasingly embedded into underwriting, claims management, fraud detection and customer engagement processes. The goal is to automate routine, repetitive tasks to free human talent for higher-value, judgment-intensive work.

Importantly, all three groups—the lean core team, vendor partners and technology—participate in shaping the direction of technology deployment. This collaborative governance ensures that technology solutions meet real operational needs and adapt dynamically to evolving business requirements.

The integration of technology also supports the vendor partnership model by reducing the manual work that must be staffed, making it more cost-effective to engage flexible, contract-based expertise. As automation handles more tasks, vendor partners can scale their involvement up or down without the complications of permanent employment contracts, preserving morale and cultural integrity within the core team.

Strategic and Operational Benefits

This Elastic Staffing model offers multiple strategic and operational advantages:

• Cost Efficiency and Risk Mitigation: By leveraging vendor partners and automation, carriers reduce fixed labor costs and exposure to workforce-related risks, such as layoffs (and the reputational risk associated with that) and regulatory scrutiny.
• Agility and Scalability: Firms can rapidly adjust capacity to match business cycles, new product launches or catastrophe events without the lag and expense of traditional hiring. An example is a carrier seeking to open a new line of business or expand into a new geography. Typically, those carriers would pre-seed staff before getting validation of product demand (or assume current staff can handle the new demand). Either scenario could strain the current staff or lead to overinvestment in staffing for a solution with poor initial traction. This scenario is better managed by a vendor partner that can scale and contract with demand volume.
• Access to Specialized Skills: Vendor partners often bring niche expertise and technology capabilities that would be costly or impractical to maintain in-house.
• Enhanced Innovation: The lean core team can focus on strategic innovation and culture-building, while vendor partners and technology drive operational excellence.
• Improved Employee Experience: Minimizing layoffs and maintaining a stable core team supports morale and reduces the cultural disruptions common in traditional workforce models.

Where Elastic Staffing Outperforms Traditional Models

• CAT events and claim surges create operational strain. In our experience, carriers will see 10-20x spikes in call volume within 24 hours, with 70-80 percent of FNOL volume arriving in the first few days. Hold times jump from seconds to 30+ minutes without surge capacity. An elastic model can activate licensed, U.S.-based support within hours who know your brand, maintain service levels and protect CSAT during the most consequential, make-or-break moments.
• Entering into new states or markets can result in overhiring and uncertain demand, stretching teams too thin. Elastic Staffing allows carriers and MGAs to scale underwriting, servicing and policy operations in line with submission volume and as needed, all while reducing the financial risk.
• Managing high-volume submission intake for MGAs and E&S carriers makes permanent staffing inefficient. Integrated partners can quickly and consistently absorb high-volume, document-heavy intake work without disrupting internal teams.

How to Implement an Elastic Staffing Model: A Practical Framework

• Map core vs. non-core work. Be explicit about what must remain internal and what can be automated and co-managed.
• Define service levels and quality expectations. This includes cycle times, accuracy targets, NPS and CSAT scores.
• Select vendor partners with deep insurance expertise. General BPO firms, or those focused more on consulting or technology integrations and platforms, can drive up costs and create friction. Companies delivering modern operations capabilities and specialized property/casualty expertise across markets will provide more controllable operating expenses and successful integration as a valid extension of internal teams.
• Establish shared governance. Joint operating meetings, KPIs, quality assurance reviews and transparent reporting are essential to Elastic Staffing’s effectiveness.
• Integrate automation over time. Elastic Staffing is most effective when technology removes low-level work from the system entirely.

Cultural Considerations and Leadership

Transitioning to this model requires intentional cultural and leadership efforts. The core team must cultivate a culture of trust and accountability that extends beyond traditional employment boundaries to include vendor partners. Clear communication, shared goals and aligned incentives are critical to ensure all contributors, whether W2 employees or vendor partners, are equally invested in the company’s success.

Leaders must also foster a mindset that embraces technology as a collaborator rather than a threat, encouraging teams to view automation as a tool that enhances their work rather than replaces it.

As technology reshapes insurance and market volatility becomes the norm, carriers and MGAs will need to rethink how work gets done to remain competitive and resilient. The lean core team, integrated vendor partners and a layered technology approach provide a pragmatic, cost-effective and flexible framework for growth. It balances strategic leadership with operational scalability and technological innovation, enabling insurers to navigate uncertainty while preserving culture and driving performance. This model is not just a response to workforce challenges; it is a strategic enabler for the future of insurance, empowering carriers to innovate, adapt and thrive in a rapidly evolving industry.

Peter Crowe is president of FOCUS Insurance Services. He began his career in technology consulting, then joined RE/MAX in 2013, serving as senior vice president of marketing, communications and investor relations and executive vice president of business and product strategy. In 2019 he joined We Insure as chief revenue officer, leading its expansion into 25 new states and growing the agency footprint from 90 to 190 offices in just over two years. In 2022 he became president of FOCUS (then named Team Focus Insurance Group). He holds a BBA from Indiana University and an MBA from the University of Denver, Daniels College of Business.

Nick Lamparelli is Managing Partner of Insurance Nerds, a media and continuing education company dedicated to advancing insurance. He is also a veteran insurance professional, having been an agent, broker and wholesaler before finding catastrophe analytics.

About FOCUS: FOCUS is an insurance BPO company that provides cloud-based, core administration solutions for P&C insurance companies and MGAs. Learn more at teamfocusins.com.