The insurance sector is facing a growing need to adapt its workforce strategies. Market volatility, digital transformation, and shifting demographics are prompting insurers to rethink traditional employment models. As a result, flexible staffing—including contract, contingent, and project-based roles—is gaining traction as a deliberate strategy for insurers to meet evolving business demands while managing costs and complexity.

This shift is not a trend but a structural change in how insurers manage talent.

Why Flexible Staffing Is Gaining Traction in Insurance

1. Bridging the Talent Shortage in Key Functions

According to the Insurance Institute of Canada, over 25% of the Canadian insurance workforce is expected to retire within the next five years. Critical functions such as underwriting, actuarial science, data analytics, and risk management are particularly impacted by talent gaps. Recruiting for these roles often takes months.

Flexible staffing enables insurance firms to bring in highly qualified professionals quickly, especially for specialized or project-based needs, without the long lead times associated with permanent hires.

2. Supporting Digital and Operational Transformation

Insurance companies are investing in cloud technologies, automation, and customer self-service platforms to modernize operations. These initiatives often require skills that are not core to the company’s existing workforce—such as UX/UI design, cybersecurity, or systems integration.

Bringing in contract specialists or IT consultants allows insurers to accelerate digital transformation projects while avoiding overextension of internal teams or the costs of full-time hires for temporary needs.

3. Improving Workforce Agility and Cost Control

The cyclical nature of insurance—especially in claims, compliance, and audit functions—makes it ideal for flexible workforce models. For instance, following catastrophic events or regulatory changes, companies often need to scale teams rapidly for short durations.

A flexible staffing strategy allows firms to align labour costs with business activity, reduce overhead, and maintain lean permanent teams. This elasticity is critical in managing profitability amid rising claims costs and economic uncertainty.

4. Accessing Emerging Skills and External Expertise

With the rise of insurtech and AI applications in insurance (e.g., automated underwriting, AI-assisted claims), insurers need ongoing access to emerging skill sets. By leveraging fractional executives, industry consultants, and gig-economy professionals, insurers can infuse fresh thinking into their strategy without long-term commitments.

Fractional Chief Technology Officers or compliance experts, for example, can guide firms through complex regulatory implementations or infrastructure upgrades while remaining cost-effective.

5. Aligning with Evolving Worker Preferences

A significant portion of skilled professionals are opting for non-traditional work arrangements. According to Randstad Canada, over 30% of the Canadian workforce engaged in non-permanent work in 2023. The insurance industry, traditionally seen as slow-moving, is adapting to attract flexible talent—especially among Gen Z and millennial professionals who prioritize autonomy and purpose over tenure.

Offering remote contract roles and project-based engagements expands the talent pool and supports diversity hiring goals.

Types of Flexible Talent Models in Insurance

• Contingent Workers: Short-term workers engaged through staffing firms or directly by the company, often used in claims processing or policy renewals.
• Independent Contractors: Self-employed specialists hired for specific tasks such as compliance audits, marketing strategy, or AI model training.
• Fractional Executives: Part-time leadership roles that allow small or mid-sized firms to access executive-level guidance on IT, legal, or digital innovation.
• Consultants and Freelancers: Niche experts brought in to solve defined problems, from actuarial modeling to customer journey mapping.

Risks and Compliance Considerations

Flexible staffing models must be deployed with strong governance. Misclassifying contractors as employees can lead to legal consequences. Organizations must also ensure proper onboarding, data security protocols, and confidentiality agreements are in place. Best practices include:

• Implementing background checks and access control systems
• Using formal agreements that outline scope, deliverables, and IP rights
• Regular performance evaluations and integration checkpoints
• Ensuring compliance with CRA guidelines on worker classification

Many insurers are now partnering with Managed Service Providers (MSPs) or using Vendor Management Systems (VMS) to streamline the engagement of non-permanent workers while minimizing compliance risks.

Strategic Benefits of Flexible Staffing

• Speed to Market: Contract professionals can be onboarded faster than full-time staff, helping accelerate timelines for product launches, technology upgrades, or compliance readiness.
• Scalability: Firms can scale teams up or down without the long-term financial burden of permanent staff.
• Innovation: Fresh perspectives from external talent can spark innovation in legacy organizations, especially in areas like digital claims processing, customer experience design, and predictive analytics.
• Resilience: A blended workforce provides insurance companies with resilience during market shifts, mergers, or operational pivots.

Looking Ahead

Flexible staffing is no longer just a cost-saving tactic—it is becoming a core component of workforce planning in the insurance industry. With growing talent shortages, rising business complexity, and increasing demand for digital capabilities, insurers that embed flexibility into their HR strategies are better positioned to remain competitive.

The firms leading the way are investing in integrated workforce planning, building internal flexible talent pools, and partnering with specialist firms to access top-tier contingent talent. By doing so, they are shaping a workforce model built for speed, adaptability, and long-term sustainability.