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Digital Insurance : the war on talent and the fight for the ownership of the digital agenda

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This article from  guest author Marc Baloch examines the digital trends from a people perspective and examines the changing requirements for the role of the Chief Information/ Technology Officer CIO/CTO as well as the broader implications for both executive ownership of the digital agenda and the war for talent.

Editorial Comment from The Digital Insurer

In this engaging guest article Marc Baloch, from Harvey Nash, examines the strategic impact of trends in digital insurance from a people perspective. He identifies the coming battle for ownership of the digital agenda as well as the fight for scarce talent. CIOs and CEOs need to plan ahead.

From paper to mobile in one career

Most current global and regional CEOs of insurance firms will have started their careers when the industry was regarded as People & Paper.  Much has changed since then, and in recent years the influence of technology changed this to an industry of People and IT.

With mainstream consumer technology entering the business distribution channels, now is the time to take advantage of the unique opportunity to become a prime innovator, and seize market share from leading competitors.

Game changing technology has arrived via BYOT (buy/bring your own technology) where consumer driven preferences are impacting business IT, along with business analytics software tools and platforms enabling companies to really deep dive into their customers’ information.  With Asia’s changing demographics enabling a rapid adoption of mobile technology,  the insurance industry is transforming.

Global CEOs and insurance leaders cannot afford to be mere spectators in this phase where the rules of the game are being re-written.

What has changed?

Let’s use football as a metaphor – back in the paper world, IT was considered the defence, the utility needs, offering a simple data tool. Later it became the midfielder, IT connecting front and back offices, creating efficiencies around their operating models, but it didn’t really impact at the customer front line.

Now, IT is part of the attack, a tool used to provide a genuine solution to gain more business.  What are we talking of here?

  • Cloud Solutions – smart, cost reduced, flexible
  • Mobile – apps that enable on the move client interaction via tablets
  • Big Data – Masses of data is available that with customer analytics tools give companies rich knowledge about their customers and create opportunities for cross selling solutions
  • Web 2.0 – highly interactive internet channels enabling demand pull customer experiences

New tech solutions enable more sales via direct, agency and bancassurance channels.

 New game and new rules

If the game and the rules have changed, how does this affect its players?

The Chief Information Officer, or modern-day IT Director, has changed.  The best ones have embraced new technology, its impact and the ability to speak the language of the business, and are becoming the most impactful player for our clients’ businesses.  CEOs have gone on both major cost reduction programs, and M&A in order to achieve profit or revenue growth.  Today, new technology presents CEOs with an integrated solution, offering major economies of scale in terms of cost and can act as a key revenue driver resulting in a very exciting land grab war.

This insight is derived from Harvey Nash’s annual CIO Survey, which showed from a pool of 2,000 respondents that Digital, Mobile BYOT, and becoming more business focused are now the key to future success.

What skills does a CIO need nowadays in the insurance market to be transformative?

CIOs must genuinely understand the customer journey, the business strategy, speak the language of the business and be able to build relationships across front to back-office channels.

According to the global Harvey Nash CIO survey, “the role the CIO plays in articulating the technology vision cannot be overstated, but ‘championing’ technology is as much about collaboration and persuasion as it is about setting strategy”.

Many CIOs struggle to build support from their C-suite level peers in achieving their technology vision in this critical phase of the industry. It becomes quite clear, that as we enter a more collaborative age, the importance placed on the relationship-building and influencing skills of the CIO will only grow, as internal and external partners are required to work together collaboratively to achieve success.  The gap between CIO and peers reduces as technology truly impacts the revenue curve, customer interaction and profits.

In the current market environment, growth strategies are the talk of the day and innovation has a crucial role to play.  However, many CIOs recognise there is still a gap between the innovation ambition of their organisation and the actual innovation capabilities of their IT department. Business needs to invest to accelerate the innovation cycle and capability.

Almost two-thirds of CEOs prefer their CIOs to concentrate on making, rather than saving, money for the company.  Surprisingly, 75% of CIOs feel collaboration with sales and marketing should be improved.  Best they get on with it, as CMOs are increasingly taking ownership of some of this new technology (web, customer interaction, digital and social media) when they see the CIO isn’t!

Digital media is now firmly on the CIO agenda and is clearly an area of shared responsibility between the CIO and the CMO.  Where IT and marketing strategies were once developed in isolation, they must now be integrated and executed in synch.  CIOs must identify how to utilise any new platform to secure the most business benefit, whereas content is likely to become the responsibility of the marketing team.  Smart CIOs may handle both.

How can game changing results be achieved in real terms? 

IT divisions often either sit on the periphery of the business or at the core as a key business partner. In the future, when new products are developed and channels are transformed, IT must be front and centre with actuarial, operations and sales/marketing & distribution. IT must adopt the common business language and build collaboration skills that are necessary to drive efficiency forward. The goal is to put ideas forward at the right time, where in the past product development or channel development was reactive, this model will ensure that differentiating business ideas are not lost along the way.

In order to achieve transformational success for the business, the relationship between IT and other business functions has to be improved (see exhibit 8) and communication lines clearly established. This could lead to Centres of Excellence structures filled with experts from all business areas  pulled together into teams to enhance the ability of the business to swiftly execute pilot projects and also, to have all areas involved more effectively.

CIO and Digital Insurance Harvey Nash

New product pushes will be agile pilot programs that test the waters, requiring speed and impact. The team driving these will include pricing actuaries, marketing executives, channel heads and IT, requiring all departments to work together much more closely.

As many insurers struggle with the silo structure of their distribution channels, everyone will strive for new models to enhance better cross selling and less internal competition. It will result for most of the life insurers in a balanced multi-channel distribution strategy where technology paves the way forward.

Who is in charge?

As technology is constantly evolving it has been the  responsibility of the CIO to ensure that the business stayed ahead of the game and put consumers at the heart of demonstrable results. In the new digital world, customers need to be able to quickly grasp the benefits of any new innovation.

However new tools alone cannot drive greater business results – the role of the sales force, the agent, the customer-facing financial planner all have to change and be on board with new innovations.  In the past, sales teams were focused on products that accounted for the highest margins.  Now products must be solution based, offering tailored options to customers – this changes the approach of the business.

As the rules for the game change, organisations witness new battles between the CIO and those that sit on the distribution side, be it the CMO (who generally seem to embrace social media with  vigour), the Chief Customer Officer (a new title reflecting the emergence of customer centricity) and also actual Heads of Distribution, who all want to be seen as being in charge of pushing digital solutions and seizing  new opportunities.

It is quite fascinating, as a real-time example, that the state-of-the-art tablet sales toolkit from AIA, iPoS (known as iAIA previously) was not developed by either the CMO or CIO, but  under the direct supervision and authority of the distribution executives within agency and bancassurance/partnerships. (Editor’s note : Check out the Tablet Toolkit magazine  from the Digital Insurer for the case study on this tool).

It points to a development that distribution may be the only real powerful corporate body to effectively push forward the digitisation as sales enablers, more powerful even than the CIO and CMO.

CIOs together with CMOs/CCOs  will either be game changing business leaders at the heart of their companies’ commercial transformation, or they will see their business move into decline as a result of a lack of innovation.

Whilst it is not yet clear who will be in charge of the new digital game, it is evident that companies who do not embrace the new world of digital commerce will truly suffer by witnessing competitors or potential new entrants that use new technology effectively to re-invent the market.

The talent shortage – even more acute in the digital space

Not only in Asia but worldwide, as highlighted by our global CIO survey, the talent capable of transforming and seizing golden opportunities is scarce. CIOs have identified big data, mobile solutions, security and resilience and technical architecture as the most critical  skills that are in short supply (see Exhibit 2).

Talent shortages in digital insurance

Exhibit 2 : Talent shortages even more acute

While some of the scarce technical skills and competencies can be found within other sectors, it has become apparent that many CIOs will not be able to find and secure the talent that has the ability to create the most positive impact for their businesses. Clearly, the findings of the survey demonstrate there is a missing link between creativity and technology and some respondents mentioned that specialists within PR and media agencies may form a talent hub able to absorb the likely demand, not only from insurance but also other industries.

As talent is truly scarce, businesses and CIOs need to prevent staff attrition by adopting the best retention strategies, as for more than 90% of respondents, retention is a concern (see Exhibit 3).

Digital Insurance talent retention harvey nash

It is a new game; and the game is on.

 

by Marc Baloch, Head of Financial Services for Harvey Nash in Asia

About Harvey Nash:

Established in 1988, Harvey Nash has helped over half the world’s leading companies recruit, source and manage the highly skilled talent they need to succeed in an increasingly competitive, global and technology driven world. With 4,000 experts in 40 offices across Europe, Asia and the U.S. we have the reach and resources of a global organisation, whilst fostering a culture of innovation and agility that empowers our people across the world to respond to constantly changing client needs. We work with clients, both big and small, to deliver a portfolio of services: executive search, professional recruitment and outsourcing.

To learn more, please visit www.harveynash.com

Follow us on Twitter www.twitter.com/harveynashgroup

About the author:

Marc Baloch heads the Financial Services Practice of Harvey Nash Executive Search in Asia. He has more than 15 years’ experience in Executive Search, developing an international career working in Hong Kong, Singapore, Tokyo and Europe. Marc has a significant understanding of both developed markets such as South Korea, Japan and Hong Kong/China in addition to high growth markets, for example Vietnam, Indonesia, Malaysia,  from many years covering the region.

Marc works on C-suite mandates across Asia and has successfully completed critical hires on behalf of his clients within the insurance, asset management and banking sectors.

Further Information / Reading

Harvey Nash 2013 CIO Survey

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