Enable employees to better serve millennials

In a highly regulated and historically conservative industry like insurance, it’s more important than ever to learn how to evolve the standards of the past to continue be relevant and attract younger customers, Glenn Llopis argues. In this Forbes blog post, he talked with executives from Farmers Insurance about what they have done to rethink the way they serve millennials. “So we took one of our most talented underwriting people—Stephanie Lloyd—and said, ‘Listen, you’re going to set up a company. I don’t care what product you write,” Jeff Dailey, CEO of Farmers Insurance, told Llopis. “I don’t care what channel you write, you don’t have to use our technologies, you don’t have to use our brand. I want you to figure out a way to attract and be able to write and create loyalty with a millennial brand.’” Lloyd and her team of 15 people created a company called Toggle, which allows policyholders to customize coverages to suit their lifestyles. Llopis says this is a good example a shift from focusing on results to prioritizing methods. “When we loosen our grip on results and activate methods for leading in a way that honors our age of personalization, we become healthy. And when we’re healthy, we grow,” he writes.

How insurers should prepare for a new workforce

Preparing for the future of work in insurance is not just about technology skills training, it’s also about restructuring the workforce, Karen Pauli argues. She cites a recent SMA research that shows that personal lines insurers are strategizing and deploying around transformative technologies. “Many personal lines insurers are in the enviable position of having newly modernized core systems, and opportunities for operational efficiency abound in this environment,” she writes in Digital Insurer. “But modern core systems are also launchpads for workforce modernization. Paper-based workflow walls can come down and claims organizations can reorganize around goals of proactive service.” Pauli stresses that the retiring baby boomers create an urgency around workforce restructuring. “The new workers entering the workforce will not sit in the same seats as those that are leaving,” she writes. “Fortunately, that is not necessary if personal lines executives take the opportunity to align customer and digital strategies with transformational technology adoption in innovative new ways within organizations that are structured for the new reality of ongoing change.”

Insurance industry’s continuing talent challenge

Talent is the “secret sauce” for the transformation of the insurance industry, yet continues to remain elusive, according to EY Insurance Outlook 2020. “The generation coming out of school these days are all excited about working for some of the largest technology firms in the world,” Ed J. Majkowski, EY Americas insurance sector and advisory leader, told Insurance Business Magazine. “When they have to choose between working for a technology firm, a bank, or an insurance company, insurance almost always comes last.” EY’s stance is that insurers need to do much better at proactively communicating why the industry matters, what value it brings to society and the overall appeal of an insurance career. “If independent brokerages and agencies want to attract and retain the best talent, they have to operate faster in a digital environment; get products to market faster using digital capabilities; and partner with insurance companies who invest in the agent experience,” Majkowski said.

How to support the workforce shift in insurance

Historically, male, white and middle-aged employees have dominated the insurance workforce, that but dynamic is starting to shift, claims Bethan Moorcraft. “Diversity and inclusion is starting to make its mark on the insurance industry,” she writes in Insurance Business America. “Today, there’s a lot more diversity in the insurance workforce in terms of gender, age, ethnicity, sexuality, religious beliefs (the list goes on), than there was 20 years ago.” Moorcraft argues that building inclusive workplace cultures in insurance will also require setting up affinity groups, and mentorship and sponsorship programs to support employees from all backgrounds. The magazine will host two Women in Insurance conferences exploring these topics, on Oct. 3 in San Francisco and Oct. 10 in London.

The talent gap in financial services

The Bureau of Labor Statistics reported that the U.S. economy gained 130,000 jobs in August, with financial services realizing one of the largest gains—15,000 workers. “Conversations with over 30 recruiters throughout the country confirm that they view the job market as very robust,” Jack Kelly writes in Forbes. “The corporate demand, according to executive search professionals, outweighs the supply of qualified candidates.” Companies are experiencing difficulty hiring people with requisite skills and experience, with the unemployment rate remaining at 3.7 percent, a 50-year low. Dimitri Mastrocola, a financial services recruiter, told Kelly that the market for in-house counsel is the strongest it’s been since the 2008 financial crisis.

Bringing more young people into careers in insurance

The Insurance Institute of Canada’s Career Connections focuses on raising awareness among young adults about the many skilled professions in insurance. “When the program started, it was predominantly focused on how insurance works and demonstrating some of the career path potential, and it was focused on high schools as well as a little bit of campus work,” Trevor Buttrum, manager of Career Connections, told Insurance Business Magazine. “In 2007, when we identified that there was definitely an ageing workforce, [we realized] we needed to move the needle towards being able to feed the pipeline more directly.” Today, Career Connections holds more than 460 annual events on campuses and communities across Canada. “Our hope is that people can find something that aligns with [their skills], whether they’re good with numbers or good with people or good with data and analytics, or they want to help in a time of crisis and bring people back from something really terrible,” Buttrum said. “From our standpoint, too, it’s about building awareness, engagement, and action within the industry.”

Taking sustainability seriously

Is sustainability an insurer’s issue? American International Group (AIG) thinks so because it just created a brand new leadership position—chief sustainability officer—and named Jennifer Waldner to the role. This comes at the heels of AIG’s first Task Force on Climate-related Financial Closures report disclosing the company’s environmental, social and human capital initiatives. In her new role, Waldner is tasked with implementing AIG’s sustainability strategy and will lead a team to drive global initiatives. “The creation of a chief sustainability officer position reflects AIG’s ongoing commitment to sustainability as an insurer, investor, employer and corporate citizen, along with our efforts to take a thoughtful, coordinated approach across our global footprint,” AIG executive vice president and AIG Life Holdings vice-chair Thomas B. Leonardi said in a press release.

Insurance recruiters need to innovate

As the insurance industry transforms to meet the growing demands of the digital era, incumbent players face an ultimatum in recruitment: innovate or fall behind, claims Bethan Moorcraft. “Moving forward in the digital era, the challenge for incumbent insurers will be to strike the right workforce balance between innovative thinkers and those with a deep insurance industry knowledge that has been developed over time,” she writes in Insurance Business Canada. Hiring talent today can be approached with the same strategy firms take when they forge business partnerships, according to Rino D’Onofrio, head of the Canadian insurance business at RBC Insurance. “Some people have what I call future-ready skills, so they’re proficient in artificial intelligence (AI), digital tools, and so on, while others have the risk management, risk selection and risk adjudication capabilities,” he says. “When you look within those groups—for example, at the risk selection specialists (underwriters)—we’re not going to want every single one of the underwriters in our team to be working in such an agile way.” Successful talent recruitment comes from everybody being aligned, sharing a common mission, and everyone pulling forward together as a team as opposed to isolating people in expertise silos, Moorcraft concludes.

Insurers should look to non-traditional sources of talent

Speaking of graduation, Rosalie Donlon would like to see many of the fresh graduates consider insurance, but knows that the insurance industry struggles to shake off its “stodgy” reputation. “As the insurance industry competes for new graduates, I’d like to urge hiring managers to look outside the traditional sources for finding new employees,” she writes in this Property Casualty 360 article. “All too often employers recruit from colleges or geographies that they’re comfortable with. But everyone who graduated from the same college within the same few years is likely to have studied with the same professors and were subject to the same influences.” She cites three overlooked sources of potential employees: retired military, employees over the age of 40, and people with disabilities. “When you’re recruiting new talent, be sure not to look in the mirror and hope to find someone who looks, thinks and acts as you do,” Donlon writes. “You’ll be missing out on people with skills that you didn’t know you needed until that employee arrived in your office.”

How the insurance workforce will evolve

The evolving consumer landscape will ultimately shape the future insurance workforce, claims Kimberly Harris-Ferrante. “Insurance is an old, traditional industry that always hired from within, and hired people that think the same way,” she told Insurance Business Magazine. “Insurance companies need to think bigger than just gender and racial diversity.” Harris-Ferrante believes there will be an increase in the number of people from different fields, such as marketing, retail, and automotive, entering the industry. “More and more women are going into the analytics field,” she said. “Many insurance companies are struggling to find people who are up to speed with machine learning, AI and new data skills, so there is a great opportunity for women pursuing those fields.” However, Harris-Ferrante advises women to be patient. “It’s an exciting time for women in the industry,” she said. “Big changes are coming, but it’s not going to happen overnight.”

AI in the insurance workforce

The potential uses for artificial intelligence (AI) in insurance are becoming more plentiful and will continue to shape the future workforce, claims Bethan Moorcraft. In this Insurance Business Canada article, she identifies three core areas of AI use in insurance: customer engagement, automation of processes, and the discovery of new insights. “While easy cases can be automated, such as automated document processing, you still want to have a human in the loop for the more difficult cases,” Charles Dugas, head of insurance at Element AI, said. “Rather than seeing this as a black or white situation—100 percent manual or 100 percent automated—there’s a happy middle you can reach where a portion of your easy cases are handled automatically, and the other portion is supported by AI but really managed by human beings.” Allstate CEO Tom Wilson announced his company would invest $40 million to help train employees to thrive in an AI-driven environment. Moorcraft points out this training can be particularly helpful when it comes to AI and the issue of determinability (being able to explain why an algorithm arrives at a specific conclusion). “If you are the machine learning expert and you can’t back up a decision, you’re in for some trouble,” Alex LaPlante of Global Risk Institute said.

Brokers need to up benefits game to attract young talent

The struggle to attract younger generations to insurance is not a new subject, but brokers need to take a new approach to the war on talent, argue John Ludley and Matthew Reed. “Some have been proactive in setting up apprenticeships or graduate schemes, or creating defined training programs, but is this enough?” they ask in a blog post for Insurance Age. “There is abundant research out there which demonstrates how important perks and benefits are to potential employees before accepting a new job, and the positive impact these benefits have when it comes to staff retention.” The authors cite key findings of a new survey: Less than two thirds of employees (60 percent) have a benefits package, while of those who do, 86 percent said it made them feel valued. Yet, among the owners and managers surveyed, only a third said they offered some form of benefits package, and only 10 percent of those who provide a benefits package said they offered health coverage. “We found this particularly odd given that of all the perks, surely health insurance should be the one that an insurance broker should feel the most confident about buying even if they don’t have an HR professional in their business?” the authors write. “Brokers need to wake up to the fact that well-designed employment packages that go beyond the basic salary, holiday and pension offer will play a massive part in helping them compete effectively to attract and retain that talent.”

How AI can help insurers attract top talent

Using artificial intelligence (AI) can help insurers attract and retain talent, claims Saad Mered. “It’s a tough talent market right now across the leading insurance markets. Canada is no exception,” Mered, CEO of Zurich Canada, told Canadian Underwriter. “We need to make sure that we have a work environment, and tools at the disposal of these young professionals, who could be interested in the insurance industry but really don’t want to work in the 19th century.” Zurich Canada is working on implementing AI tools to help its experts in claims and underwriting improve accuracy in policy documents. “To be able to manage and augment and evolve the tool—that can really only come from people who understand the subject matter extremely well in great detail, and have a bit of passion in the subject matter and a bit of passion in the technology.” Mered added that these experts love insurance, love what they do, but are also “technogeeks” who enjoy the fact that they can do both at the same time.

The millennial factor in insurance

Millennials will shape the insurance industry both as customers and as employees, according to a new report from KPMG Canada. “The quality of talent that is coming out of universities and their understanding of technology is fantastic,” Chris Cornell, a partner at KPMG, told Insurance Business Canada. “It’s a race to secure that talent, and the insurance industry is going to have to participate in that race and there are some headwinds associated with that.” Some Canadian insurers are attending job fairs regularly and telling young potential candidates about the upsides of a career in insurance. “We really want to let students understand that insurance is a viable, long-term career. Regardless of the stock market going up and down, regardless of the economy in general, insurance is always going to be here,” said Jodie Kaufman Davis, corporate vice president at H.W. Kaufman Group and managing director of Burns & Wilcox Canada. “It’s not only for individuals who want to be underwriters—there are opportunities in accounting, in claims, in marketing, and in administration. There’s a lot for individuals to do and many different career paths beyond just thinking of traditional underwriting.”

Insurance’s ongoing talent challenge

In this in-depth article, authors Brian Klapper and Francois Kouroriez explore the talent problem that consumer-driven disruption has inflicted on the insurance industry. They believe the insurance industry has three main talent challenges: 1. Most top graduates from business schools don’t aspire to work for insurance companies. “The industry projects a dusty, 19th century image,” they write. “People tend to think of insurance as looking backward as opposed to looking forward; a necessary evil rather than a positive force.” 2. Insurers are having trouble attracting the digital natives who may better understand the changing needs and expectations of digitally inclined customers. 3. Many of the well-regarded training programs were eliminated in the 1990s and 2000s, resulting in the loss of the pipeline of talent that was being developed. How can insurers get over these hurdles? “At the top, the C-suite and the board must recognize that their businesses require different kinds of talent than before and that the people they are hiring want different things from their work lives than did previous employees. Moreover, companies must engage this new generation of talent in novel ways, such as presenting them with the chance to actively participate in the transformational programs that will define the insurers of the future,” the authors write.

Remote work on the rise in Canada’s insurance industry

Canadian insurance employees are 13 percent more likely to work remotely than office workers in the United States, Canadian Underwriter reports this week. The article shares highlights of the Insurance Institute of Canada’s recent report, “Demographics of the P&C Industry in Canada,” which states that more than one-third of insurance employees north of the border work remotely, compared to the one in five U.S. workers who do. Remote work is most common in risk management (63 percent) and claims (41 percent). Only 20 percent of Canadian brokers and actuaries report working remotely. The article notes that working from home is not a set-in-stone rule, based on formal agreements. The Insurance Institute study found that 70 percent of the employees who work remotely do so on an informal basis. “Technology today provides us with the opportunity to enhance the employee experience with the ability to work from home,” Catherine Leclair of Gore Mutual told Canadian Underwriter. “This flexibility has given us the ability to attract top talent and provide all our employees with a better work-life balance. I see the concept of working from home continuing to expand in the future.”

Cultivating the future leaders of insurance

As baby boomers continue to retire from the insurance industry, insiders continue to worry not only about attracting the next generation of talent, but also about the loss of expertise and leadership. This Insurance Business Magazine article argues that the current transition period can be an opportunity, instead of an obstacle. “While many young people don’t consider insurance as exciting as other financial services fields such as banking or investments, by creating an ongoing and structured dialogue with younger people, insurance leaders have a chance to slowly shift those outdated views,” the article notes. Josh Ammons, vice president of the WSIA’s U40 group for young insurance professionals, shares his tips on engaging younger generations about the industry. “It’s a people business, and I don’t think enough people know that,” he says. “The retirements in the next five to 10 years are going to create so many opportunities, both for people who are already in the industry and fall into the under-40 segment, and for people in their early 20s who don’t know much about the business at all.” Ammons believes that insurance companies looking to attract the next generation of leaders should avoid being influenced by stereotypes about millennials. “It’s up to us as leaders to create a culture where millennials feel part of a team and are held accountable. We need to give them a career path, direction, and some mentorship and opportunities for development along the way,” he says.

Insurance: the new American dream job?

According to a new report from Bankrate.com, actuarial science was ranked the most valuable college major, with an average annual salary of $108,658 and a better-than-average unemployment rate of 2.3 percent. “The actuarial science profession is interesting because students don’t need advanced degrees to gain livable wages, but instead are certified through a series of exams overseen by the industry’s professional organizations,” Bankrate.com analyst Adrian Garcia told Bloomberg in an interview. “Students typically pass one to two of these exams while in school and then go on and complete others while working, earning raises and bonuses as they pass.” The study was based on data from the U.S. Census Bureau’s 2016 American Community Survey and ranked 162 majors with labor forces of at least 15,000 people. Other fields of study that topped the list were in the science, technology, engineering and mathematics fields, bolstering the efforts to get more students involved in STEM programs.

Survey predicts record hiring in insurance in 2018

According to the 2018 Insurance Industry Employment and Hiring Outlook Survey released earlier this month by GreatInsuranceJobs.com, there is potential for record hiring in the insurance industry through to the end of the year. The survey found 8,454 current job openings among 64 companies, with an additional 13,000 jobs to become available in the last three quarters of 2018. The top five positions insurance companies are looking to fill are in sales, underwriting, customer service/administration, technology and claims. On the other hand, the top hiring challenges include the lack of skilled talent, uncompetitive salaries and small recruiting budgets. “One of the biggest things is the fact that employers stated recruiting strategies have not changed since the recession,” explained Roger Lear, the site’s co-founder. “For most, this leaves them in the dust to companies who can get a targeted recruiting message delivered on multiple platforms. Most of our surveyed employers have not even considered new recruiting technology yet.”

Butler University pilots student-run insurance company

Students in Butler University’s Davey Risk Management and Insurance Program are underwriting Steinway pianos, rare books in the library, as well as the school’s mascot bulldog, according to an article in The New York Times. The student-run captive insurance company is the brainchild of Zach Finn, a clinical professor and the program’s director, and Michael M. Bill, co-founder of Indianapolis-based MJ Insurance, who funded the minimum capital for the company. “To the students, learning by doing through an on-campus insurance entity makes sense,” the article notes. Josh Toly, a Butler senior and the student company’s vice president for property underwriting told The Times: “We go here. We know the ins and outs of the buildings better than a standard insurance company would.”