As technology continues to disrupt the insurance sector, Matthew Eames considers the implications of the digital revolution for talent attraction and retention.
There is no doubt that the insurance sector is changing in an era of digital disruption.
Technology is playing a huge part in the transformation to not only increase efficiency and achieve lower processing costs, but also to gain competitive advantage. Insurers are increasingly under pressure to revitalise traditional business models under intensifying competition. But what does this mean for talent attraction and retention strategies?
Some change is being driven by market consolidation. A huge increase in mergers and acquisitions has led to major transformation projects and this is driving up demand for the talent that can manage and implement them.
The shortage of delivery-focused programme managers is a real concern for some and much of this focus is on collaborating in order to deliver effective transformation. Efficiency and change is not just about doing better business, it’s about survival. This is evident in the demise of companies such as Blockbuster and Kodak; organisations that failed to see the challenges facing their traditional business models. In a transforming market, we’ve seen an increase in insurers working alongside specialist recruitment consultancies to deliver on the implementation phase and to mobilise resources for these big change projects – creating a more cost-effective solution.
From a change perspective, the consumer market is obviously leading the march, with firms such as Black Box and Marmalade disrupting traditional business models. However, change is also a key tenet of corporate insurers, with Lloyd’s CEO Inga Beale talking at length about modernisation being a key priority.
In a knowledge-intensive industry, with competition rising, the importance of attraction and retention is paramount.
Looking outside the box
But in a sector that has historically preferred to recruit from within its own ranks, what needs to be done to ensure that the insurance arena attracts – and retains – the talent that it needs? Should the sector be prioritising tech-savvy talent in its resourcing strategies?
While there’s no doubt that in the Lloyd's market some of the front-office processes will continue to be carried out traditionally, it’s clear that technology is driving so much change that the back office is now struggling to keep up with the pace.
The consumer market is becoming digitalised much more rapidly, and is open to bringing in skills from other sectors such as utilities and banking. Though insurance is now deemed a more lucrative industry for career opportunities, some argue that the issue doesn’t lie in attraction, but in corporate insurers being open to looking outside their own industry for the skillsets needed to safeguard its future success.
The industry faces a disconnect between supply and demand, with a shortage of talent across many areas – not just technology. But with tech talent becoming more of a priority, the need to cast the net wider and look to other areas that may have transferable skill sets, such as banking, is business-critical.
The banking sector has already seen some huge change projects, so there is opportunity for the insurance market to utilise the knowledge within those sectors and seek talent that can impart best practice, experience and new ideas into the industry.
Barriers to change
While the industry opens up to fresh talent and new ideas, many will still face barriers to making change happen.
Is there enough of a desire for change within a market that is so traditional in nature? Despite the recent introduction of the London market Target Operating Model, there is scepticism about the appetite for a modernised market, driven perhaps by a fear of technology transforming or consolidating traditional job roles.
If broking becomes more digitalised, what eventually happens to the broker? Of course, much of the proposed model is driven by the need for efficiency and cost-cutting; removing London-specific processes and realising economies of shared services, for example. With the discovery phase underway, what this may mean from a talent perspective will be interesting to see.
One of the key barriers to change, particularly in the corporate market, is attracting more innovative talent into the insurance sector, which is arguably still viewed as old-fashioned.
Employers can do more to promote their employer brand and highlight the upward career path and stability that the industry can offer.
Recruitment consultancy partners can provide key business intelligence such as benchmarking reports on salaries, benefits and working environments to help improve attraction strategies and help insurers alter their image.
With the market facing increasing pressure to transform traditional business models using digital technology, making the sector attractive to tech-savvy talent is going to be key with regard to future-proofing an industry steeped in tradition.
It’s not just about adopting new technologies to improve processes, but aligning to a consultative partner who is best able to help deliver on the changes that will take place as a result. Professionals who can handle and process real-time information, who are comfortable with big data and can utilise analytics will be in high demand.
The disruption posed by technological innovation is approaching. For an industry that has talked about digital advancement for years, having the right controls today, and being as productive and effective as possible to meet the need for more efficient distribution and processing, will be key for success.
As Hyperion chief executive David Howden said at the Xchanging London Market Conference recently: “We’re kidding ourselves if we don’t think there’s an Uber out there coming for us!”
Article originally featured in the winter issue of Insider Quarterly Magazine.