In a recent roundtable meeting of the Datos Insights Insurance Special Interest Group on AI and Innovation, we explored the implications of this rapidly unfolding transformation. Attendees represented a diverse cross-section of life/annuity/benefits and property/casualty insurers eager to compare perspectives and action plans for leveraging leading-edge AI capabilities while mitigating risks. 

The Promise: Massive Productivity Gains 

Early adopter feedback remains overwhelmingly positive. Several participants highlighted the value being generated by AI applications. Use cases that streamline traditionally labor-intensive processes received particularly enthusiastic endorsement: tasks like reviewing new business submissions, extracting details from third-party reports, and summarizing claim adjuster notes, to name a few examples. 

“It can really take [a task that would require] hours and deliver condensed summaries in seconds or minutes instead. Our adjusters can brush up on key events in a fraction of the time before contacting policyholders now,” noted one executive. Their peers concurred, and some insurers shared that they are already seeing productivity improvements as a result. 

The Peril: Risk, Bias, and Regulatory Compliance 

However, AI is not a magic cure-all; insurers must approach it with caution. These tools, while promising, have hardly reached full maturity yet. Consideration must be given to regulations as well as risks like chatbots making unauthorized coverage recommendations. Existing biases in algorithms and training data need to be proactively addressed as well.  

Carrier leadership teams should maintain a balanced perspective. While still in the early days, most seem to believe productivity and customer experience gains currently outweigh the risks posed by thoughtful AI adoption. Yet an undercurrent of healthy caution pervades. As one attendee noted, “This is all moving incredibly fast, and we must be responsive while avoiding recklessness.” 

The Prognosis: Strong Leadership and Enterprise Governance 

Getting governance right may not be as glamorous as deploying AI capabilities, but it’s what separates winners from losers. Governance and risk management practices must evolve to keep pace with rapid application advances already underway within insurance organizations. Moreover, those processes require ongoing oversight rather than once-and-done enactment, given the speed of change industrywide. 

Carriers should incorporate AI strategically into their existing risk, compliance, and IT checks and balances while staying flexible since environmental dynamics keep shifting significantly. The ability to audit model transparency and explainability will be just as crucial as thoroughly scrubbing training datasets. 

Harnessing AI’s immense potential for insurance while steering clear of the pitfalls necessitates asking tough questions together as an industry. We remain committed to helping insurance leaders find the right answers to unleash innovation responsibly. If you would like to join one of our upcoming discussions or learn more about our research, please visit our website or reach out to me at cgeaglone@datos-insights.com.

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Balancing Career Aspirations With Personal Responsibilities Can Be Challenging

McKinsey’s “Women in the Workplace 2023” report showed that over the past five years, women’s representation at the manager or director levels has only grown 3-4%, creating a weak pipeline for future leaders. According to our panelists, there are many different factors that are factored into their decisions and timing for pursuing a leadership role. Several mentioned that their career paths were not linear; some specifically chose to pursue a leadership position, while others were presented with the opportunity. Routes to leadership also differed – some entered via a supervisory role and some through a project-leadership role that eventually turned into a people-management role.

Other factors discussed that can impact women’s interest in pursuing leadership included: the desire to lead and influence individuals and teams; work-life balance considerations; organizational culture (including politics); exposure to role models and mentors; and generational perspectives around boundaries and what it means to be a leader.

More Can Be Done to Fill The Future Leader Pipeline

Despite concerns that women are less interested in leadership roles than in the past, McKinsey’s report shows that 9 out of 10 women under 30 want to be promoted to the next level, and 3 out of 4 aspire to become senior leaders. To encourage more women to seek out leadership positions in their organization, there needs to be more leadership development and opportunities specifically aimed at preparing and supporting women, a focus on building company culture around inclusive practices, and visibility of women leaders as role models.

Most of our panelists agreed that their interest in pursuing leadership was developed during their early careers, often by a mentor at their company who saw their potential and encouraged that direction. This highlights the importance of mentoring women who show leadership potential, beginning in their early roles at a company, but also women at all stages of their career path.

Advocate For Yourself

Women often struggle with self-promotion, which can be a limiting behavior when pursuing leadership positions. Women seeking to advance their careers should take the opportunity to document accomplishments in performance reviews, be comfortable speaking up to take credit for ideas, and seek out opportunities that can help them build their technical and interpersonal skills and exposure. Additionally, for women already in leadership roles, it is important to advocate and provide opportunities for women in your organization.  

In addition to advocating for your accomplishments, our panelists discussed the need to advocate for your boundaries. Not all tasks are created equal. When presented with additional work, consider which assignments are aligned with your career goals and can provide you with an opportunity to learn the business, advance your skills, and build new relationships and prioritize those if possible. One panelist shared, “Setting boundaries shows strong leadership – it speaks volumes to the people you lead. Set boundaries and have the ability to stand by them.”

Conclusion

Despite headlines touting women’s disinterest in leadership roles and the recent “lazy girl job” stereotype, many women do aspire to senior leader roles. Their pursuit may vary depending on personal goals or obligations, but it’s important to encourage women to consider taking on leadership positions. Fostering an inclusive company culture, offering leadership development and mentoring programs, and providing more flexibility are ways to maintain the pipeline of women reaching senior level roles.

Our next Datos Insights Women’s Network virtual meeting will take place on January 31^st at 11am ET on the topic of How to Avoid Getting Stuck in a Critical Support Role, led by Datos Insights Senior Principal Deb Zawisza. Register to join us here.

The post Navigating the Path to Leadership: Insights for Women appeared first on Datos Insights.

Ideal use cases for RPA are often short-term fixes lacking long-term strategic value, such as bridging legacy systems during upgrades. RPA can also help manage legacy systems that must be perpetually maintained. For life insurers, RPA may replace integration long-term for closed books. The technology generates lift rekeying data between disparate systems and during new business processing.

However, RPA doesn’t provide true integration or flexibility of modern cores. Over time, it can create technical debt and complexity that inhibits innovation and customer experience.

When implementing RPA, insurers need intentional governance and operating models to contain “bot sprawl.” A decision framework can guide use cases, balancing short-term value and long-term risks. The goal should be eliminating manual processes rather than perpetuating them with bots. Insurers should have a plan to eventually sunset many RPA deployments as part of overall transformation efforts.

RPA is a valuable tactical solution that generates quick wins. However, integrated API-enabled core systems will better position insurers for growth, risk management, and meeting demands. With the right approach, RPA can optimize operations today while serving as a bridge to more strategic modernization down the road. The technology is best leveraged not as a permanent fix but as part of the journey. 

For more information on successfully deploying RPA, check out Datos Insights’ recent report, Effective RPA Implementation: An Insurer CIO Checklist, or contact me at cgeaglone@datos-insights.com.

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AI Can Impact Nearly Every Aspect of Insurance

There are a significant number of use cases for AI in insurance. AI is being used to increase efficiency and effectiveness in all areas, including product and actuarial, marketing, underwriting, customer service, billing, claims, and compliance. When finding ways to incorporate AI into your organization, it’s important to look for use cases that can quickly deliver business value and build from there. AI is best used to augment insurance tasks and should not be aimed at replacing human expertise. 

One panelist identified underwriting as a key area for automation. During the proposal stage, speed matters. Finding ways to automate the entry of submission data can not only alleviate workloads, but also improve risk selection as companies are now able to better leverage all of the submission data rather than just the data entered. Another example our panelists brought up was in claims. On the claims side, and in workers’ comp specifically, insurers are utilizing texting capabilities early on in the claims process to gather vital information while keeping the tone conversational, and often empathetic, enabling them to resolve claim issues more quickly.

Make Sure the Right People Are Involved in AI Projects

When beginning a new AI project, it’s important to determine the expected ROI and how you plan on sustaining that value long term. Understanding how to get a project out of the idea phase and into execution mode is an important skill set for those involved with AI. Additionally, it’s critical to ensure that SMEs are included in the conversation. SMEs work with the data every day and can provide the proper context and business needs to enable IT to build solutions that make tangible impact.

One panelist discussed how organizations can build frameworks and models that are scalable and applicable to the majority of use cases to prevent an organization from having countless, bespoke processes. Proper project prioritization is a key step. There are often competing priorities, and it’s difficult to know what projects will produce the most value, so focus efforts on those that have a measurable ROI and address a key business opportunity or challenge. This panelist also noted how important it is to bring SMEs into conversations to answer the business questions and provide key insights. Data people don’t always understand the context of the data they’re looking at, so bringing in experts to provide context can make the impact much greater.

ChatGPT Can Help With Tasks, but Expertise Is Still Needed

ChatGPT is a hot topic, and many organizations are looking to determine how it can be used to meet their needs. Current tests of the platform have shown that it has the potential to help with summarizing data and can provide significant time savings for laborious data entry tasks. However, it is critical to have someone with expertise check the output’s accuracy or an organization can risk running into a compliance issue. 

One panelist mentioned summary data by nurses as a good use of ChatGPT. She mentioned that currently, nurses spend about four hours summarizing data, but ChatGPT can do the same summary in seconds. Another panelist agreed and mentioned that if you are prescriptive with what you give it, you can get a fast response, but that it’s not always accurate. In an industry where compliance is key, insurers need to find a balance between finding efficiencies and opportunities for automation while maintaining accuracy and compliance. While ChatGPT, and AI in general, can provide great opportunities for process improvements and efficiency gains, balancing technology with the human element remains imperative.

Our next Aite-Novarica Women’s Network virtual meeting, titled “You’ve Come a Long Way…Maybe,” will take place on June 28th at 2pm ET. We will be discussing some stats about the progress women have made in the industry broadly. This meeting will be open to both Women’s Network members and non-members. Register to join us here.

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Claims optimization is about making the entire process faster by automating lower-value, manual tasks while providing claims professionals with the right information at the right time to make critical decisions regarding the claim. It entails using analytics and AI to analyze structured and unstructured data at every interaction and task in the claims cycle to determine the next best action. When used correctly, applying AI and intelligent decisioning to the claims process will yield tangible benefits such as lower loss and expense ratios, along with improving the overall adjuster and customer experience.  

Leveraging data and improving customer experience are top priorities for carriers regardless of size or lines of business offered. Carriers are interested in digitizing the entire claims process—from first notice of loss (FNOL) to payment. It is becoming more common to leverage third-party data providers to assist with fraud identification and severity scoring, and predicting the ability to minimize loss through subrogation or alternative payers is an emerging area of interest for both carriers and vendors.

The number of quality ecosystem partners available to carriers is at an all-time high. These partners enhance the core claim system’s capability to provide services essential to handling claims. Some services, such as outbound payments and litigation, support all lines of business, while others are line-of-business specific. There are multiple service providers to choose from for all aspects of the claims life cycle, including FNOL, inspections, appraisals/estimatics, bill review, subrogation and recovery, litigation management, and outbound payments. 

Technology is great, it but must solve a real business problem to be valuable. In today’s economic environment, experimental innovation budgets have been significantly reduced or eliminated altogether. Therefore, it’s even more critical to understand where the opportunities exist to provide the biggest benefits (speed, operational efficiency, customer experience) and how they align with your overall business strategy. 

Prioritizing the capabilities most valuable to your organization and choosing the right partners requires a process for identifying the right investment areas. If you’d like to learn more or discuss this topic, contact me at cgeaglone@datos-insights.com. To dive into how the world of property/casualty insurance solutions is evolving, read our report Aite-Novarica Core Ecosystem Map for P/C Insurers.

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Life insurers, for example, tend to think in terms of blocks of business covering a multi-year span based on the mortality tables at the time of writing, resulting in a few large blocks of business. For these insurers, it’s often cost-prohibitive to migrate such a large number of policies into a new system. This results in a balance between legacy systems maintained in the long term for older business and modern systems used for new business.

Property/casualty insurers, on the other hand, have policies with much shorter terms. This allows them to move off legacy systems slightly more quickly. Both property/casualty and life/annuity/benefits insurers deal with a mix of legacy and modern core systems, but the approach to support, conversion, and modernization via IT services partners can take different strategies and follow different timelines.

Approaches to IT Services Partnerships

Most midsize and almost all large carriers have multiple systems and multiple service providers. It’s common, though, to have one big, strategic partner that is viewed as a part of the team and is involved in the planning and decision-making process. Many insurers also like to work with a smaller, boutique IT services partner (though the definition of “smaller” depends on the insurer) where the insurer feels they have more influence.

This can then be augmented by niche partners, either local partners—often a small team that used to work at the carrier—or a services provider with a very specialized skill set like mobile app development. Carriers will also typically use a separate QA partner to avoid conflicts of interest so that the partner doing development isn’t performing QA on their own work.

The combination of a broad, strategic partner augmented by niche specialized partners serves two main purposes: long-term stability and risk mitigation. The presence of a strategic partner helps preserve institutional knowledge and maintain the momentum behind large projects, while the various vendors providing more niche services augment a disaster recovery/business continuity plan with an additional line of defense.

Starting a New Carrier-Services Provider Relationship

For most insurers, over 50% of the year-to-year budget is focused on maintenance, modernization, and replacement of core systems. Most strategic partnerships start there—as an SI partner helping with an implementation. Being a known and certified SI partner isn’t the only way to start a strategic partnership, but it can be a great first step.

This is not always the favorite work of an IT services vendor as it tends to include a large amount of lower-cost configuration work rather than custom software development, but it represents the majority of IT services spending. It is also a great way to provide value, which can lead to more complex and important engagements (i.e., bigger and better assignments).

Services providers aren’t distinct to a single core systems vendor. If there’s a great relationship with a service provider, the strength of that relationship and history will almost always outweigh other factors. New relationships between service providers and carriers tend to start only if the previous one has gone awry, or if a specialized skill or expertise is needed that the incumbent doesn’t have. If the partnership is working well and there’s a good history, a carrier will want to keep working with that partner to build on their success.

A new core system is a trigger to think about or look for a new services provider. In general, however, if a carrier already has a trusted service provider, they’ll want to stay with them. For service providers, it is important to bring deep domain knowledge and relevant experience to the table.

The relationships between service providers and carriers provide long-lasting benefits for both parties, and those that treat it as a true partnership will get the most value from it. To learn more about the IT services providers carriers are relying on, read our full report IT Services Providers for Insurers: Vendor Analysis Report.

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The strategic focus on global sourcing was done for cost reasons, for organizational scalability reasons, to expand technology capabilities, and, sometimes, to improve processes. Even if a company didn’t directly source their teams, many IT services providers have a large percentage of globally located resources, which require CIOs and their boards to have additional risk identification and mitigation strategies.

As for any IT endeavor, results varied depending on insurer, partner, and use case. From time to time, alternative models were discussed, e.g., rural sourcing, but these did not approach scale and success with resources external to the U.S.

With no near-term end in sight to international political and economic volatility, Aite-Novarica has heard companies not simply asking tactical questions (“Do we have the right partner?”), but rather asking far more fundamental questions such as, “From a risk perspective, do we need to reevaluate our resource models and move to have more work accomplished in the U.S. or North America?” 

An additional global issue is inflationary pressure. We have heard CIOs share their concerns over potential rate card shocks when current contracts expire. Add all of these complications together and traditional sourcing models, as well as service partners with heavy allocations of resources in one location, are feeling the pressure. 

Making major changes to global sourcing models shouldn’t be taken lightly, but the risks are real and intense—and they will only keep intensifying. Insurers and IT services providers should be prepared to evolve quickly.

So what can these organizations do to foster that evolution? There are a couple of options:

1. Companies can follow the, “More BMWs Being Built in South Carolina” model. That is, a foreign corporation makes large-scale investments in the U.S. From the IT supply chain perspective, this has occurred in the past. For example, TCS made investments in Cincinnati, and Infosys invested in Des Moines. Increasing this type of investment may prove prudent for a global systems integrator for many reasons. Less drastic, but also effective, is spreading the geography of resources from a central location to multiple locations around the globe. In fact, some service providers have started communicating their resource counts and locations in more granular terms than on- and offshore.
2. Companies may stop requiring a four-year degree for every role. A four-year computer science or electrical engineering degree will continue to be the gold standard for many roles, but some companies may decide a silver standard is totally fine for certain roles. Options may include internal employees taking aptitude tests for more technical roles, hiring graduates from community colleges, or offering extensive online training. Employers may determine that, for some technical roles, the resources they are seeking are closer than they realized. Similarly, service providers may start to recruit less-experienced industry professionals and run them through their own boot camps to accelerate their development.
3. Companies and service providers alike may move to retirement-isn’t-binary models. From a purely economic perspective, the current model of an employee going from 100 to 0 on a particular day doesn’t make sense. It is especially foolish when the employee goes to zero after accumulating knowledge, experiences, and (yes) lessons learned from a few mistakes along the way. Companies may find themselves constructing ways to have employees go from 100 to 50 or 25 and find that path far more rational.   

The world is uncertain on many fronts, but when it comes to adapting insurer IT resourcing strategies, there are some solid options available. To learn more about the IT services providers active in the insurance space, read our latest report, IT Services Providers for Insurers: Vendor Analysis Report.

If you would like to discuss this blog or the IT services report, please contact me at cgeaglone@datos-insights.com or my colleague John at jkeddy@datos-insights.com.

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On May 25th, I hosted the latest meeting of the Aite-Novarica Women’s Network on Mastering the Many Facets of Project Management. Panelists Caty Hartley, Senior Project Manager at Harford Mutual Insurance Companies; Jennifer Ramos, AVP, Portfolio Manager at Global Indemnity Limited; and Amy Aluyi, Director of Strategic Portfolio Management at Pekin Insurance Group shared their perspectives.

Qualities of an Effective Project Manager

Our discussion of project management began with the qualities that make a good project manager. With the transition in methodologies from Waterfall to Agile, the skill set of a project manager has evolved; project managers need to be strategic thinkers, able to keep track of all the work that needs to be done in the short term, but also be able to see and articulate the bigger picture. Being an effective communicator is now more important than ever, especially when it comes to tailoring communications to various audiences: from front-line teams to executive-level updates.

One panelist mentioned that a good project manager needs emotional intelligence to diffuse conflicts and good leadership skills to generate buy-in for a plan. Additionally, a genuine curiosity and being a lifelong learner are important—as a project manager you need to be doing many things at once and also need to know what the people on your team are doing.

Challenges of Project Management

Our panelists also discussed the challenges that come with project management, including defining roles and expectations for everyone on the project, especially with different types of Agile implementation (e.g., project manager vs. scrum master vs. product owner). One panelist shared that making sure everyone has a seat at the table and defining everyone’s roles and responsibilities has been one of their organization’s biggest challenges over the past year.

Another major challenge of project management is delivering tough messages to executive leadership, especially related to missed deadlines. Knowing when and how to communicate to leadership that a deadline is unreasonable or that it’s time to pull the plug on a stalled project are vital skills for people in this role. Other obstacles include resource allocation, project scope changes, and setting clear project goals and deadlines.

Project Management as Career Development

We ended our discussion on advice for younger professionals and project management as a career path. Project management is a great career development role, providing experience and exposure to various aspects of IT and business units, both strategic and operational. Projects offer the unique opportunity to work with many different skill sets across an organization, and they can provide exposure to executive leadership that you wouldn’t get in other roles. Panelists agreed that being a project manager opens doors on your career path.

You can be known for a lot of things, but what you want to be known for is being someone that gets stuff done. As project managers, we get stuff done, and in your career, that’s going to be an important skill set. There are not many other roles where that is the crux of your experience.

The next virtual meeting of the Aite-Novarica Women’s Network, Insights on Executive Coaching and Stories from the Field, will take place on June 29th, 2022. The session will include two executive coaches as guest panelists and will be led by Aite-Novarica Group Senior Principal Nancy Casbarro. More information is available at https://aite-novarica.com/womens-network.

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But they’re not the only success factors insurers need to consider. In this second blog, I’ll discuss the value of establishing and measuring key performance metrics.

Being delivered on time and within budget has long been a measure of success for system implementations. However, as initiatives have transitioned from big bang projects with a defined start and end date to a more agile, iterative process focused on generating business value, this metric is less indicative of success. Value is delivered in results achieved, not just capabilities delivered.

It is vital to identify key performance indicators (KPIs) for both project health and business results before the project begins, and all stakeholders should be aligned on the value of these KPIs. Using Aite-Novarica Group’s Three Levers of Value—Sell More, Manage Risk Better, Cost Less to Operate—is a simple yet effective way to prioritize the features and functionality that will create the competitive advantage all carriers are looking for. All metrics should be meaningful and simple to track.

Having an executive steering committee (ESC) helps ensure that the project is on track and staying aligned with the strategic goals, provides a forum for key decisions that may impact one or more departments, helps address and resolve any challenges or issues, and keeps the executive team engaged and aware of project health.

Create a report card that evaluates deliverables against agreed-upon business objectives. The report card should reflect where the project stands on scope and schedule (release value vs. backlog carried over into the next release), budget (internal and external costs), resource allocation, and a risk indicator for each item (on target, at risk, or needs attention are three common statuses used). Issues that need ESC attention should also be noted, and decisions should be documented.

Establishing service-level agreements with vendors is critical to ensure that everyone understands and is committed to meeting critical and non-critical items. Assigning a severity level and priority to each item is also essential. 

Some simple yet meaningful metrics for business results include improved turnaround times for processing new business, endorsements, and renewals. In our on-demand world, accelerated cycle times are top priorities for both carriers and agents. Other metrics related to improved productivity per employee are usually attributed to optimized business processes. Historically, this has meant automation of manual tasks, but in today’s environment, the elimination of certain non-value-added tasks combined with automation results in truly optimized business processes. Establishing measurable customer satisfaction metrics is also important.

KPIs tied to gains in speed, efficiency, and effectiveness of key business processes are easily understood by senior business executives and can be an easy way to communicate the success of a project and value of technology (IT).

If you have thoughts or want to discuss this topic further, please contact me at cgeaglone@datos-insights.com.

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During our vendor selection engagements, carriers often ask vendors, “What is your on-time and on-budget success rate?” While it may seem like a simple question, the answer is complex and depends on many variables, the key drivers being scope and speed of decision-making. When vendors use terms like MVP (minimum viable product) it can sound like “bare bones to get it into production” to the business community. Therefore, it’s critical to have a strong framework in place from the beginning to position yourself for success.

Any successful core system transformation framework needs to have certain key elements. It starts with having executive sponsorship and engagement at the highest levels of the organization and identifying the key project roles and responsibilities. Select business product owners who can step away from their full-time job and have a back-up in place to cover for them; this responsibility cannot be done as a part-time role or side gig. 

These product owners must have the authority and strategic vision to make decisions, which may include abandoning the “way we’ve always done it.” The strategic vision component must also be balanced with being in the weeds enough to understand the impact of those decisions on existing workflows, employees, and customer experiences. The business product owner will be accountable for the system long after it’s in production so they will want to ensure it meets all of their needs.

Equally important is strong project management. Having a program manager experienced in core system modernization lead the initiative, with project managers over each workstream (policy, billing, claims), is vital as it is not uncommon to run concurrent workstreams. The program manager plays the critical role of overseeing the interdependencies and interconnectivity of three simultaneous projects that would each be a sizeable effort if approached as stand-alone!

Companies often leverage a systems integrator (SI) in these roles as they bring strong project management experience as well as experience implementing these vendor solutions, and they can leverage best practices and lessons learned from past implementations.

Once the key roles have been defined and participants identified, establish an executive steering committee (ESC) to ensure the project is on track. The ESC also helps make sure the project remains aligned with the strategic goals, provides a forum for key decisions that may impact one or more departments, can help address and resolve any challenges or issues, and keeps the executive team engaged and aware of project health. Depending on the frequency of meetings, it is also a good idea to have key leadership from the vendor participate in the ESC for all the same reasons.

If you have thoughts or want to discuss this topic further, please reach out to me directly at cgeaglone@datos-insights.com.

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The best approach to core systems modernization partly depends on what the biggest driver for that modernization is. Although speed to market and better agent experience are often at play, “fear of being unable to support the legacy system” topped the list for participants. Their next question was, given the sense of urgency that fear can inspire, how can insurers best contain implementation costs and avoid slipping time horizons and undue strain on the business?

All industries are facing talent issues, but with working from home becoming normalized for many insurers, participants discussed how else to make their organization an attractive option for current and future employees.

In addition, it is becoming more common to partner with insuretech startups that offer innovative technologies to improve ease of doing business and provide operational efficiencies.

Approaches to Core Implementations

The saying “You can’t eat an elephant in one bite” is very applicable to core systems implementations. One approach to making core systems modernization more manageable is doing it in pieces. Two insurers at our recent meeting took that approach by starting with claims, noting that billing and policy are best done together due to their tight linkages. Other insurers take it a few lines of business at a time.

Others are maintaining and hardening their legacy systems and surrounding them with modern digital add-ons to buy time until they are ready to begin a transformation effort. These insurers are often waiting for the vendor market to mature a bit and to hear more about the success stories that align with their type of company, rather than the struggles. 

Over time, we have observed that there is not necessarily one best approach. The right approach for any insurer considers their specific business goals and pain points, existing technology environment, ability to enable change, and available budget.

Acquiring, Training, and Retaining Talent

Hiring, training, and retaining talent is a challenge across industries, not just in insurance or commercial lines. Many insurers have continued to offer remote or hybrid work options. While this may still be for practical reasons in some cases, it’s also good for talent retention and acquisition—flexibility around work location remains very high up on employee wish lists.

The downside of remote work, as many insurers have discovered, is that it can be harder to manage employees’ work-life balance and identify burnout. Managers must check in with employees more formally than if they were all in an office together. Some insurers have even begun conducting “stay interviews”: frank conversations between employees and managers on happiness with and fit for the current role, company and manager performance, and short-to-medium-term professional goals. If the employee is looking for a new or different opportunity, insurers should realize that “up” isn’t the only career development path and enable and encourage lateral moves within the company.

Even insurers who retain employees well are working to acquire new talent. Insurers have a lot to offer outside of the typical roles—from advanced analytics to cyber insurance and lots of innovation funding, insurance is more exciting than some people might think. There are plenty of things to attract both young and seasoned professionals. Messaging this to prospective employees is key.

Insuretech Innovation

On the topic of innovation, commercial lines insurers are partnering with insuretech startups to accelerate underwriting, claims handling, and risk mitigation; ease submission intake; and automate testing. Insurers we spoke with were particularly interested in aerial imaging technologies for examining roof conditions and surrounding debris.

Such technologies can go beyond the typical insurance use cases in underwriting and claims and extend into risk mitigation by generating automated letters to insureds based on their roof condition. Insuretech startups are also offering solutions for other common manual tasks, such as intelligent text ingestion for new business submissions and RPA and other forms of automation for test automation.

Commercial lines insurance is an exciting space these days, with many insurers focused on growing this market segment significantly. The availability of configurable modern core systems as well as insuretech offerings that provide robust data, analytics, and AI-enabled capabilities are presenting opportunities for insurers of all sizes to increase efficiencies, improve outcomes, and optimize agent ease of doing business.

To join the conversation, sign up for one of our Insurance practice’s upcoming virtual or in-person events or reach out to me directly at cgeaglone@datos-insights.com.

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On March 30th, I hosted the latest meeting of the Aite-Novarica Women’s Network on Talent Strategies for the Evolving World. Panelists Kara Hoogensen, Senior Vice President of Specialty Benefits at Principal Financial Group; Laurie Pierman, Vice President of Claim Operations and Shared Services at Amerisure; and Qing Yang, IT Business Analyst at Pennsylvania Lumbermens Mutual Insurance Company shared their perspectives.

Flexible Work Models Help Attract and Retain Talent

Our meeting began with a discussion of work-from-home and return-to-office planning, a hot-button topic in the industry today. Panelists agreed that policies in the industry seem to be all over the board. One panelist shared that, in her company’s experience, the flexibility they are offering in terms of the choice to work from home or from the office is helping them retain employees. She stated that, in her opinion, “In order to attract and retain talent, erring on the side of more flexible is best.”

This view is consistent with industry and societal trends. While we often see generational differences in responses, several surveys on this topic have shown that most employees, regardless of age, want to work anywhere, anytime, and on any device thanks to available corporate communication and sharing tools. They wish to balance family and life priorities outside the office. Other panelists shared that their organizations are also operating on hybrid models and, in some cases, allowing employees to work fully remotely.

Virtual Work Environments Require “Building New Muscles”

Companies are also facing new challenges that have arisen due to remote work. Companies can keep employees engaged through innovative assignments and projects that have a meaningful impact on the organization as well as strengthen their individual skill sets. Employees are also assuming additional workloads as a result of the Great Resignation.

One panelist shared a concern about the difficulty of identifying burnout in employees who are working virtually: “It’s harder to see it because you don’t have those side conversations that you typically do in the office, water cooler talk or getting a cup of coffee. That’s a challenge… and then, when we identify the problem, what solutions can we put in place at the leader and organizational level?” Balancing engagement and burnout are critical priorities for leaders in our current environment, as it can turn into a vicious circle if more employees leave due to burnout.

The issue of maintaining company culture and building relationships among employees in a virtual work environment was also discussed. Companies are finding that it takes longer to build trust and connections through virtual interactions, although it can be done. One panelist who works fully remotely shared that regular check-ins with people outside her department as well as quarterly in-person meetings that bring everyone in the company together help her stay connected to her coworkers.

A panelist summed up the new challenges companies are facing in this work environment: “We are building new skills and muscles here in terms of how to be effective leaders for people we sometimes see and sometimes don’t.” Leaders and managers need to continue to build these muscles in order to retain employees.

Tips for Addressing Talent Gaps

Panelists discussed several ways their own companies are working to address talent gaps. Tips include shortening the amount of time from application to extending an offer and sharing résumés between different departments for applicants that may be a good fit for a different role. Encouraging existing employees to look for new opportunities within your organization, something that has not always been supported, could be win-win for both the employee and the company.

Companies are also focusing on creating a more formalized and robust knowledge transfer process to reduce the impact of departing and retiring employees. Additionally, with an increase in the number of boomerang employees—individuals who return after leaving a company—companies should maintain connections with departing employees who may want to return to the organization in the future.

The next virtual meeting of the Aite-Novarica Women’s Network will take place on April 27, 2022, on the topic of “Optimizing Business & IT Alignment.” The discussion will be led by Aite-Novarica Group Senior Principal Deb Zawisza. More information is available at https://aite-novarica.com/womens-network.

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