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Personal Lines Workforce Modernization: What’s the Price Tag?

New SMA Blog by Karen Pauli, Principal, Strategy Meets Action

For me, one of the happiest, most inspiring headlines I’ve seen in recent months read as follows: “Nationwide announces five-year, $160M Future of Work investment.”

Finally, an insurer was putting a stake in the ground, announcing a major commitment to address a looming and significant reality – the nature of work is changing. The article addressed the “how” of their initiative with phrases such as “reskill and upskill,” “future-ready skills,” and “technology-enabled.” A recent SMA research report, 2020 Strategic Initiatives: P&C Personal Lines, shows that personal lines insurers are strategizing and deploying around transformative technologies such as AI/ML, IoT, and blockchain. Successful execution is not going to occur without the supporting skills, so there is a clear need that must be addressed. Nationwide is stepping up, and that is very important.

But there’s another angle to this. It’s not just about technology skills training. It’s also about restructuring the workforce. If one holds the belief that it’s all about the technology – technology for technology’s sake – then going about skill training alone is just fine. But I have met very few people who believe that – including Nationwide, as explained in press releases and articles. Given the enormity of the changes currently in motion related to customer and agent expectations and digital transformation, technology skills alone will not suffice. Personal lines organizations need to look at their business structures from an outside-in, consumer perspective, as well as traditional inside-out, operational perspective, and then reimagine business units and operational outcomes.

Make no mistake; this is very hard to do. SMA survey results show that 23% of personal lines insurers are not addressing the structure of their workforce at all. The percentage of insurers that are strategizing around this topic has stayed relatively the same for several years – again confirming that it is very difficult to move beyond tradition and culture and view the organization through a new lens. One of the things that makes this challenging is that the industry has historically reorganized itself around the goal of ROI, i.e., put in a new system and offset the cost through staff reductions. Unfortunately, this generally results in shuffling and redistributing work to remaining staff for quick pay-back versus actually realigning and reimagining processes.

Many personal lines insurers are in the enviable position of having newly modernized core systems, and opportunities for operational efficiency abound in this environment. But modern core systems are also a launchpad for workforce modernization. Paper-based workflow walls can come down and claims organizations can reorganize around goals of proactive service. Underwriting and product development can unify around insight-driven new market opportunities with personalized coverages and services, and actually deliver in weeks versus months and years. Most importantly, reskilled and technology-empowered employees can focus on complex business needs and not waste valuable time on ticking workflow boxes. While it may seem like an over-worked topic, the retiring baby boomers are creating an urgency around workforce restructuring. There has been a long ramp-up to the tidal wave of retiring skill sets, but the moment is at hand. And there is no time to waste. The new workers entering the workforce will not sit in the same seats as those that are leaving. 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. Every insurer will have a different price tag to achieve this state, but it will be money well spent!

For more information on specific strategic initiatives that personal lines insurers are planning or already have underway, read SMA’s new research report:

2020 Strategic Initiatives: P&C Personal Lines

The personal lines insurance industry is in the midst of transformation. In fact, many insurers are striving to accelerate transformation within their companies. SMA research reveals a widening and alarming gap between those insurers that are actively transforming and insurers that are struggling to keep their heads above water. What strategic initiatives are personal lines insurers embracing to deal with the forces of change? And what is the maturity level of these initiatives? How do the InsurTech movement and the rapid advancement of transformational technologies play into insurer plans?

This report provides survey data, insight, and analysis around the business drivers that are compelling personal lines insurers to develop strategic initiatives. Additionally, information on the top thirteen strategic initiatives is presented, highlighting the maturity of activities. The report provides an analysis of the direction that personal lines insurers are taking regarding InsurTech and transformational technologies.

Click here for the table of contents or to access the report.

About The Author

Karen Pauli, Principal at SMA, has comprehensive knowledge about how technology can drive improved results, innovation, and transformation within insurance operations. Karen has worked extensively with insurers and technology providers to reimagine processes and procedures to change business outcomes and support evolving business models. Her areas of focus include underwriting, claims, business intelligence and analytics, data sources, agency distribution, and customer management. Karen’s real-world experience with digital transformation projects has given her unique insight into the changing customer and distributor experience in the digital age. In her more than 30 years at insurance companies, and in the technology research and advisory space, Karen has developed her talent for aligning business goals and perspectives with technology roadmaps to create competitive advantage.

About SMA

Exclusively serving the insurance industry, Strategy Meets Action (SMA) is an advisory services firm offering retainers, research, consulting, events, and innovation offerings to both insurance companies and solution providers. Learn more about SMA at

SOURCE: Strategy Meets Action (SMA)