Workforce challenges as insurance companies go digital

Article Synopsis :

Meeting evolving customer expectations can require deep organizational change 

Insurers historically leading and optimizing for risk mitigation and execution are now required to develop new products at faster rates, meet the larger financial industry’s pace in customer service and take advantage of data analytics in a manner far beyond what’s typical of underwriters. According to this survey of over 60,000 respondents by Korn Ferry, leaders are having a tough time responding to this new set of needs.

Two pictures tell a thousand words:

The report breaks the problem down into five components, with ‘what you can do’ recommendations for each:

1. 1. Evolving customer expectations: Relative to the global trends, insurance employees’ favorable responses dropped 9 percentage points with regards to seeing the organization as providing a high-quality customer experience. In addition, compared to global norms, insurance employees are 8 percentage points lower in seeing good cooperation between functions, hindering an organization’s ability to meet customer needs in a timely and complete manner.

What you can do:

• Recognize the need for deep organizational change
• Engage communication teams to chart a roadmap to both internal and external stakeholders
• Do not tolerate internal finger pointing
• Invest in technology tools required to do the job

2. Low growth rate and confidence: From 2011 to 2015, the U.S. insurance market experienced a compound annual growth rate of only 2.1%. Confidence in the future business prospects of the organization is a key driver of employee engagement, and it has gone down for insurers relative to global trends. In addition, insurance employees’ perceptions of innovation at their companies is 8 percentage points lower than global norms. Lastly, employees’ understanding of the company’s overall strategy has dropped 4 percentage points in the last three years compared to the global norm, which underlies the increasing ambiguity of how insurers are responding to the market.

What you can do:

• Connecting employees to financials has been consistently shown to improve employee engagement (but that needs to be moderated by maintaining confidence in the future of the company)
• Consider leveraging and communicating progress against industry benchmarks; this will serve to contextualize performance, guide decision-making, and moderate concerns that the business is in trouble

3. Insufficient staff: In response to diminished growth, many insurers have reduced staff and white-knuckled compensation policies. As staff is reduced, employees are frequently required to do more with little or no change in compensation. This cycle leads to the following result: In comparison with global trends over the last three years, insurance employees have dropped 8 percentage points on seeing their pay as fair compared to the market, and dropped 5 percentage points on seeing a link between pay and performance.

What you can do:

• When employees call for reduced workload, focus on the process before the headcount
• Evaluate whether there’s a need for more of the current talent profiles, or a need for different talent for a long-term solution

4. Focus on deep, technical expertise: Attractive talent has often been narrowly defined as those that execute with excellence on established day-to-day activities. At a time when insurance needs new and better ways of doing things and process disruption, organizations are hiring and promoting staff to keep the lights on, but not the type of agile talent capable of reshaping the industry.

What you can do:

• Recognize which parts of your business require talent focused on execution versus innovation
• Identify opportunities for collaboration across product lines

5. Operating as “one company”: Focusing on centralization and a uniform culture has a lot of appeal, but carefully consider what parts of the business need uniformity versus more localized (and perhaps vocalized) specialization.

What you can do:

• Exercise caution when determining where the organization needs to behave uniformly
• Separate efforts and communications to create back-office synergies from efforts to create a more unified and collaborative organization

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