Digital transformation. Industrial Revolution 4.0. We are a tech company. These are all words and trends that fill the airwaves, the newsprint and websites across the world, as futurists speak of new paradigms and businesses talk about “digitalization” and connecting to “digital natives” who have grown up using technology as consumers and as employees.
In the insurance industry, harnessing technology has undoubtedly been a great thing for business, making it possible to capture, analyze and store data at an astonishing rate. As a result, insurers have been given a new lease of life to benefit from improved operations across underwriting, claims and expenses, while growing their business by better understanding their data and developing more relevant, competitive products.
Technology is bringing a host of new opportunities but insurers – particularly US regional firms – are struggling with a lack of talent in smaller cities and how to prepare for the digital workplace of the future when 65% of US insurance employees are over 40, according to the 2018 Ward HR and Employee Benefits Practices Study. In fact, digital is a mindset – which means it takes much more to create and sustain it than just implementing new technologies.
Key issues identified by insurance executives
Source: 2019 Business Environment Survey from Aon’s Ward benchmarking services
- Keeping up with and managing technology and innovation
- Attracting/retaining top talent, succession planning and talent management across the organization
- Maintaining profitable growth
- Remaining competitive, especially with new disrupters in the industry
- Expense management
- Adapting to changing customer expectations and enhancing the customer experience
As risk moves into the 21st century and beyond, what are the technology talent needs of an insurance business? What are the roles and skills that will be needed to harness and use the new technology? What jobs are staying, changing, or going away? And lastly, how will we compete for this new “digital savvy” talent when high-tech companies dominate the landscape?
1. What does technology mean to your business?
The first step is recognizing technology’s place within your business operation. High-tech companies like Google, Facebook and Amazon create amazing employment experiences – both in terms of rewards and opportunities – for their tech-savvy talent, both inside and outside their technology groups, because technology and the creation and selling of technology products are both central to who they are and how they generate revenue. This contrasts with insurance companies which are enabled by technology in how they generate revenue through premiums and investment, plus maximize the value of their industry knowledge and brand.
While “we are a tech company” sounds good on paper and seems like the obvious solution, it can be counterproductive to your organization’s objectives, since they do not align with how tech companies operate or are structured. Instead, insurers should seek to understand how and why tech company programs are structured the way that they are. This insight can then be applied to the design of insurers’ own talent and rewards programs to ensure that they are aligned with the market for tech-savvy talent, but in a way that supports and drives their business objectives.
2. Upskilling versus attracting new talent
The second is knowing what technology positions and skills are truly critical to your business. The 2019 Ward Digital & Innovation Survey found that the insurance industry’s greatest talent need is in technology and is most likely to see an increase in numbers over the next 12 months – followed by analytics and claims – across all sizes of company.
The rapid change in technology and business means that what is deemed necessary today can quickly become obsolete tomorrow – and that the need to “keep the lights on” must be balanced with the need to identify and adopt critical technology and process changes to drive the organization forward. For example, a claims professional’s role may become more efficient through artificial intelligence and automation so this presents an opportunity to retrain or upskill a colleague to handle more complex, time-consuming cases.
On the other hand, to build a business model of the future, insurers must consider how to attract tech-savvy talent through assessing competitive rates of pay both within and outside their sectors – and reconsidering their value proposition as an employer. This means changing the mindset of technology being a back office role to one that is driving the relevance of the entire firm and engaging with customers to deliver an enhanced product or service.
3. Opportunities to outsource talent
Failure to innovate was ranked no 9 by insurers in Aon’s 2019 Global Risk Management Survey as consumer expectations evolve and technology can help the industry build more client-centric processes. But the real challenge is to filter through the enormity of the emerging technology landscape to stay relevant and competitive by innovating at a faster pace. Aon is helping insurers by tracking 1200+ startups to match partnership opportunities with insurers’ strategic goals.
By taking an ‘analytics-as-a-service’ or end-to-end approach, insurers can now access both talent and technology through new collaborations.
These collaborations between insurers and their once-called ‘disruptors’ are signaling a new era where firms can benefit from technology by outsourcing talent and innovation.
4. Strategically uniting business and technology for better results
Thinking beyond just the technology talent to how technology can expand and accelerate the capabilities of your entire workforce. The key is in framing the question as a business problem – for example, wanting to increase the quality of your customer service department – and then developing a solution that looks for technology, rather than a technology solution that looks for an answer. This requires raising the awareness of both sides – the technologists and the business roles – as to how the other operates and thinks. It also points toward the need to develop and foster a “digitally-ready” mindset – curious, learning-focused and agile – to drive the demand for a “better way” – and open the door to greater innovation. Finally, it requires that organizational change toward technology and tech awareness not be limited or focused just on “traditional” IT or technology roles, ;but should include the entire workforce.
What are the key steps for insurers to realize these ambitions?
- Emphasize long-term and holistic thinking initially – where are we going and how do we plan to get there?
- Focus on strategic business objectives – what are the strengths, weaknesses, opportunities and threats for our business now and as we go forward?
- Identify and assess key traits and capabilities – such as learnability, curiosity, and agility – that underpin digital readiness within your current workforce
- Assess your culture – how ready are we to change? How quickly can it happen? How does that vary across the organization and between groups?
- Develop a strategic workforce plan that takes into account these different points of information, outlines a “profile” of what works and doesn’t work within your organization, and points towards key areas for highly-effective “quick wins” and long-term growth
- Focus initially on how you can transform and grow your current workforce through creating greater opportunities for learning and growth
- As talent comes into the organization, ensure that you are hiring both to your current and future needs and that high-impact talent is placed in high-impact roles
- Evaluate your jobs and rewards structure to ensure that they are aligned with your current needs, point towards your future requirements, and reward behaviors that create growth
The digital future is ever-changing, hard to predict, and can appear very chaotic. But an emphasis on ensuring talent and business goal alignment, developing an agile and flexible workforce, and encouraging a solutions mindset can help your business avoid pitfalls and maximize new opportunities.
About the Author
Dan Weber, Director of Market Trends and Industry Convergence, Human Capital Solutions, connects business, industry and economic trends and patterns with Radford and Aon’s world-class data resources to provide comprehensive and dynamic insights for calibrating, evaluating and developing human capital strategies for business and digital transformations.
Dan, a recognized expert in technology and life sciences business operations, organizational design and job roles, provides strategic market insight and advisement to clients across multiple industries and to Radford’s suite of Global Surveys in developing talent and career architectures.