The future of the insurance industry is one of innovation and change, with the rise of InsurTech permeating nearly every corner of the market. While the majority of insurance professionals believe that InsurTech may help to bring in new business models and redefine the customer experience, how many of them are actually implementing new technologies and approaches into their businesses? And just how ready for the future is the insurance industry?
We recently conducted an industry-wide survey of insurance professionals and Business Leaders about the future of the insurance market, revealing significant insights into how the market is preparing for upcoming changes.
How prepared are businesses for the digital revolution?
One of the main insights gained from our research is the preparedness of business – or lack thereof. There’s a message of ‘digitise or die’ within the market, with most insurers knowing they need to adopt business process transformation and become agents of change in order to leverage the benefits of the digital world. Indeed, InsurTech is no new trend – it emerged around 2010 on the back of FinTech’s success and has rapidly gained momentum industry-wide. Despite this, however, 61% of our survey respondents are less than confident that their business has a robust plan to use InsurTech, and 77% don’t have plans to mitigate the impact of technology on their employees.
These findings reveal two things: Many insurers aren’t yet maximising the potential of InsurTech, and by burying their heads in the sand about technology in the sector, they are not considering the potential impact of the digital revolution on their human talent. Just 12% are completely confident that their business has a plan to attract “new generation” talent, which reveals a significant problem for businesses that must equip themselves with digital skillsets in order to adapt to the industry of the future.
For those businesses that are following the digital revolution, the vast majority expect to see underwriting as the area that is impacted most by technology, followed by distribution and pricing and actuarial.
Recruiting the right talent
We know that technology’s impact will only intensify within insurance, yet only 8% of insurance leaders say that digital experience is the most important factor when selecting talent. Instead, the overwhelming driver - at 85% - is previous experience in the role. This traditional mindset shows that many within the industry are talking the digital talk but not walking the walk, and are continuing to hire in the same way they have always done. Insurers can no longer to do this. KPMG research suggests the industry will have been completely digitally transformed in as few as three or four years, which means insurance firms must act now to make their business digitally focused. This means being more flexible with industry experience in favour of candidates with digital skills and tech readiness. Two-thirds of insurers say they plan to increase staff over the next year, but the labour market is tighter than ever, particularly when it comes to technology and data science talent. That means businesses must proactively look for digital skill sets to add to their teams now, or risk being left behind and losing market share to smaller, more agile firms who take advantage of the benefits presented by technological solutions. Similarly, businesses must continue to look for the soft skills that are increasingly being demanded throughout the industry. Our research shows that 17% of organisations think verbal communication is the most important soft skill in ensuring future success, a further 17% think emotional intelligence is key and 14% point to cognitive flexibility as being business critical.
Humans vs machines
While technology presents enormous opportunities for the insurance sector, it does also come with its challenges. One is the much discussed debated around humans versus machines, and whether robots will replace humans in certain roles. Insurance professionals are clearly concerned about this, with 89% saying they expect technology to reduce headcount in their businesses. And while it is true that technology may replace some repetitive and monotonous tasks, strategic adoption and adaption of InsurTech should complement and enhance your existing human talent, freeing them up to focus on more strategic or relationship building tasks. We can expect to see artificial intelligence being used to make data-driven decisions that have previously been performed by human insurance professionals, so now is the time to upskill, cross-skill and adapt to ensure careers are being pushed forward, rather than hampered by technology. This message applies to managers as well as candidates, who may feel their jobs being threatened as technology takes hold. Roles will change, but this disruption can be positive to employees and job seekers who act now to identify areas to use technology to their advantage. Business can assist with this by retraining current employees to fill more digitally skilled roles, future-proofing their talent pool and maintain a competitive advantage in this era of technological upheaval.
What do candidates want?
It is clear that candidates must prepare to upskill and take on more digital tasks as they progress their career into the future – but what are they actually looking for in their next insurance roles? Our survey results suggest that for job seekers, company culture is more important than ever, with 47% ranking it as the key factor when considering a new employment opportunity. Behind this is salary, at 28%, which is always important within the industry – but interestingly, the overall ranking for most important factors in a new role position salary, brand and respect for management as similarly important. For some firms, this will be a big learning curve. No longer can organisations lure the best talent purely with salary. Now, consideration must be paid to the working environment, employer branding and management style, suggesting change is afoot in insurance in more ways than just digital readiness.
Prepare for the future of insurance with IDEX
As an innovative recruitment and talent management consultancy, IDEX have already embraced new technology to provide a better service to our candidates and clients. So we are proud to utilise this technology to identify trends and ensure our clients are appropriately staffed to prepare for them. If you’re looking to diversify your talent pool and recruit digitally skilled staff, we’d love to help by offering our expertise. Contact us hereto find out how we can help.