Executives must lead in the changing insurance marketplace
Here are three steps to usher in disruption for a new generation of insurance employees and consumers alike.
The evolution of the insurance industry is completely dependent on people. With a new generation “coming of age,” stepping out into the workforce, commuting, and starting businesses, today’s leaders need to ensure that their organizations are evolving with the marketplace and not getting left behind.
Millennial consumers respond to the idea of insurance quite differently than past generations. Because technology is a pervasive part of everything they do, they expect technology to play a key role in how the insurance industry functions.
While digital-savvy consumers can be a tough crowd for insurance companies, those who work in the industry are exerting pressure from within — but it’s pressure for less technology rather than more. These workers are constantly connected to not only work-related stimuli but also to social media, news, and endless data. They’re experiencing “digital fatigue” and increasingly look for workplaces to roll out more balanced working initiatives and processes, including more face-to-face interactions.
So how does the industry evolve for both consumers and the workers who run it — especially when their needs are in opposition/? Before answering that question, we must consider the context of why the industry has been slow to change.
What competing needs mean for insurance executives
S&P Global Market Intelligence showed the total cash and assets from U.S. insurance carriers to be $5.77 trillion just last year, a figure that includes reserves for benefit payments in the future.
New processes and technological transformations could easily change the methods behind those reserves. They also could spark major concerns about the industry taking a financial hit if the methods don’t work, forcing risk managers to negotiate new, disruptive processes while keeping these reserves in mind.
All of that is to say that the risk involved in disrupting an industry with so much at stake means the pace of change has been infamously — but sensibly — slow.
Three ways to go from traditional to transformed
Knowing that demand is high in an industry that pursues evolution and transformation, follow these three steps to usher in disruption for a new generation of insurance employees and consumers alike:
No. 1: Nurture a flexible workplace.
Healthy disruption begins at home. If your employees are itching for change while simultaneously feeling burned out from too much technology, adapt your working environment before you make any other changes.
Studies show that companies with flexible work options and a focus on balance are viewed more favorably by job seekers. Those companies also are more appreciated by current employees, so it’s a change worth pursuing.
No. 2: Welcome the new, diverse workforce.
You can only start serving new generations if those generations are actually represented in your company. Seek members of different groups when you practice talent development. With baby boomers retiring by the thousands every day, you can’t afford to stick to the same hiring focus.
Fill your organization with people who work in different ways. Combining salaried employees, freelancers, and contract workers affords you greater flexibility to use the various talents required for specific assignments — or even to implement a more variable cost structure as your organization evolves.
No. 3: Take a bold step toward integrated, personalized solutions.
While being absorbed by risk management is the status quo, leaders must also test processes to embrace artificial intelligence, cognitive technologies, machine learning, and open-source data systems to create the evolution that today’s world demands.
Consumers are willing to share more about themselves in return for a more personal, integrated way of managing their lives. Leaders must listen to these emerging preferences and capitalize on that openness.
As they evolve, insurance organizations must continue to provide valuable protections and benefits to consumers and their families during some of the most difficult periods of their lives. Transform and disrupt toward that goal, and you can’t go wrong.
Dave Armstrong (darmstrong@sassadvisors.com) is the president of Sass Advisors and the current president of PIMA. He has more than 25 years of executive leadership and expertise building and retaining high-caliber teams in growth-oriented insurance benefits organizations. Prior to founding Sass Advisors, Dave was the president and CEO of the benefits division at AIG.
These opinions are the author’s own.
See also: