The insurance industry has a reputation for being a stable, consistent employer with a structured model for talent acquisition and development. But new demands may require additional skills, training, and terms of engagement to meet an emerging disruption. We’d like your thoughts.
Insurers and Future Work
The noted futurist David Smith produced a white paper for Fineos titled “Are Insurers Ready for the New Worker?” As the title suggests, the current structure of work in the insurance industry will change dramatically as technology takes over traditional functions and will face new demands that require new skills and perspectives.
Focusing on health and benefits insurance, Smith notes that “In the insurance industry it’s foreseen that up to 99 percent of underwriting and 98 percent of claims activity could be fully automated.”
At the same time, competition will require that the consumer be placed at the centre of all functions. Consumer experience will drive innovation. As a result, insurers will have to abandon their reliance on traditional business — and, as we will see, on traditional employment models. Smith notes:
The insurance value chain will be disrupted, and from a growing range of possible vectors. Insurer IT ecosystems will increasingly need to exist ‘out there’ – at the edge – rather than within the organizational walls.
Does this extrapolate well?
Smith is writing on Life and Benefits insurance. So what about the P&C community? Perhaps not as directly pressured by consumers, this group is just starting to get the same message.
At a recent London roundtable discussion on the customer-focused insurer of the future, there was a discussion on changes in the industry. While several of the attendees seemed to lean towards incremental change, one member of the panel – Lindsey Heap, casualty underwriter for QBE European Operations – seemed to understand the deeper consequences. She says:
What we need to do as an industry echoes is what our customers are doing right now. We really need to shift and match what our customers are seeing as an issue for them and start focusing more on what they need from us rather than what we can give to them.
What are the skills that are needed?
In addition to technology, the industry needs a new breed of worker.
According to David Hill, Editor in Chief at Singularity University, “we must reform education to properly prepare students for life and careers in the technology-driven 21st century—but how?”
A model from Finland shows promise. According to Hill, the country:
plans to replace traditional school subjects with a topical approach by 2020. Instead of students having a series of classes, like language, math, or history, they’d study cross-subject topics in groups over the course of a few weeks that include components of many subjects as part of the lessons.
This approach promotes problem solving over fact memorization. It stresses four Cs: “communication, creativity, critical thinking, and collaboration—skills that are central to working in teams, a reflection of the ‘hyperconnected’ world we live in today.”
How can we get a workforce for this?
To respond quickly, insurers need mobilize teams equipped with these skills. This is not going to be easy to achieve if we go through the normal employment channels alone. The industry has started to move towards customer experience supported by digital platforms, but this is not ubiquitous yet.
However, there are early movers that are leapfrogging their competitors, and seeking talent with skills that are not well defined. Perhaps we can piggyback on the work in the Life community.
Smith argues that the consumer driven disruption in the Life and Benefits industry are fostering the rise of ‘talent platforms,’ along the lines of the Amazon ‘Mechanical Turk’. (We discussed these platforms recently in this space.) This is part of a larger trend.
Smith cites a McKinsey estimate that “by 2025 some 540 million workers will have used one of these platforms to find work and that they could add $2.7 trillion yearly to the global economy.”
Until we have critical mass workers fitting the profile, it may behoove the industry to spur its growth.
What do you think?
Are you seeing a need for a new insurance worker? Do you sense an urgency that the industry could address?