Technology Is Transforming The Insurance Workforce

Insurance is a careful balancing act. Since it’s typically based on a risk-distribution model, individuals or companies are grouped together based on certain behaviours or attributes, and premiums are charged accordingly. Charge too much, and potential customers will look elsewhere. But if you charge too little, or if there are more claims than anticipated, then it’s the insurer that will feel the pinch.

Yet the careful balance that insurers tread is under threat, since people and companies want different things from their insurers than they did in the past. They want greater personalisation, ultra-flexibility, convenience, and better value for money – all this, without making any compromises on their cover or additional risk. We’re living in a 24/7, always-on culture, and so they also expect to be able to make remote changes to their service, with no fuss and little interaction with other people. New business strategies are needed for insurers to be able to adapt to these changing expectations – and this will have a significant impact on how they construct and manage their workforce.

There’s a growing gap between the service customers expect and the one they receive. To bridge this divide, insurers need to place greater focus on their customers, rather than their services. According to a survey by loyalty and benefits firm Collinson, just 24% of people feel their insurer treats them as an individual. Insurers need to be able to align their offerings with the unique requirements of each customer, and offer them the right service, at the right time.

Take home insurance as an example. When someone is at home, their risk of a break-in is likely to be lower than when they were at work. Instead of signing up for an insurance product that provides the same level of cover at all times, would it give them a better level of service if they could click a button on their phone to adjust their level of insurance when they arrive home? Fluctuating insurance cover in line with real-time lifestyle or business changes can convert into much higher levels of customer satisfaction. Higher revenue and increased retention can be achieved as a result, too. But to deliver this hyper-personalised level of service, insurers will need a workforce with different skills than in the past.

Not only are insurance providers being tested by changing customer expectations, but they’re also being challenged by InsurTechs. These emerging companies deliver digitally-led insurance services to customers, often through an insurance-as-a-service model. Their lean operating models, lower cost burdens and lack of legacy infrastructures mean they’re far nimbler than many incumbent insurance providers. This means they can operate in fundamentally different ways – tapping into new markets and delivering enhanced services through new innovations and digital processes.

InsurTechs are unpinned by Big Data and the Internet of Things. Together, these power the deep, predictive analytics that allow InsurTechs to really get under the skin of their customers’ behaviour. Armed with this intelligence, they can tailor an insurance package to the individual’s specific needs and nurture a very customised and personalised experience. It’s clear that incumbent insurance providers need to look at how they can compete with these emerging Insurtechs, and better meet the demands of customers – and this all starts with people and skills.

While many insurance firms recognise they need to change to better meet customer expectations and compete against InsurTechs, they often struggle to make progress quickly enough. In many cases, large-scale digital transformation is required – legacy platforms need to be realigned; new processes need to be embedded; and overall digital capabilities need to be enhanced and improved. What’s more, important IT security considerations must be taken into account too, before an organisation expands its digital footprint. This all takes significant investment, both from a financial perspective and a resource point of view.

When an organisation’s business model changes, so too must their workforce strategy. Throughout any digital transformation, some tasks will be automated, while new jobs will be created, to help build, manage and augment new technologies. In fact, our research found that 87% of employers plan to increase or maintain headcount because of automation. In the years ahead, insurers can expect to see significant churn in the workforce, as skill requirements rapidly change.

Developing the right blend of people, processes and technology is key. Humans will continue to be critical in the years ahead – but the skills that insurers will require of them will change. And, when the skill requirements of an organisation evolve, so too must the overarching strategy by which they are managed. It’s critical that insurers understand the skills they have in their workforce right now and can forecast the skills they will need in the future, so they can take steps to bridge the inevitable gap.

One solution that can help involves taking a Total Talent Management approach. This means uniting the entire workforce (permanent worker, contractor, freelancer, statements of work, outsourced services and more) in a single talent management programme. This approach can give insurers the complete workforce visibility they need to make more strategic decisions about recruiting and managing talent. This all means insurers can better identify future skills gaps, and take steps to upskill and train existing workers to fill them.

Throughout their business transformation, insurers will need to find the right balance between technology and humans within the organisation. There’s a plethora of tools that can support with this, under the guidance of your workforce solutions provider. By taking a more holistic view of their workforce, insurers can more easily adapt to changing skill requirements – ensuring they secure and retain the talent they need to transform their business.

Learn more about the importance of Total Talent Management, download our whitepaper Breaking Down Barriers: Total Talent Management Comes Of Age.

This article is an extract from our guide The Future of Insurance Recruitment. To download the full guide, please click on the link below.