Previously we discussed the trends that are forcing the insurance industry to rethink its approach to talent management. This week we take a closer look at how one trend—digital disruption —is changing the industry’s traditional approaches to hiring, training and retention.

“Talent in the Digital Age,” a recent Accenture study, identified five ways in which digital is disrupting work and the workforce, and examined the impact on insurance in each area:

How work is organized. Digital radically disrupts traditional ways of organizing work, driving open operating models and collaboration. Siloes and hierarchies become obsolete when businesses are using seamless collaboration, open business models and crowdsourcing. But these techniques are far from ubiquitous in the insurance industry. Although 81 percent of insurers surveyed said they leverage the power of collaboration across their employees to achieve high performance, most property & casualty insurers cited major roadblocks to digital transformation: 87 percent blamed insufficient organizational agility, and 66 percent cited current product structure and complexity. Only 29 percent said they’d made significant adjustments to their operating models within the last year.

What work is performed. Technology-enabled talent transforms work practices, and digital enhances both “brain” and “brawn” in the workforce. The availability of analytics-based decision-making allows businesses to be more experimental, and human-robot collaboration and gaming-infused work practices will further change the work terrain. But our survey found that most insurers are a long way from making this a reality. Although 79 percent said more sophisticated analytics usage will be important or very important to insurance distribution in the next three years, only one in three have the right human and technology resources to use analytics regularly. And although 57 percent of insurers plan to increase process automation for underwriting in the future, only 43 percent have automated 70 percent or more of their underwriting processes.

Who performs the work. Digital both demands and enables a fundamentally different workforce. Insurers can tap into a network of global workers anytime, anywhere; but this work paradigm requires a new global, flexible mindset and a high level of digital skills for all involved. It also carries with it the reality of eliminating some jobs while creating others. Again, our survey found a disconnect between these ideals and reality. Only 38 percent of insurers said they use temporary teams and task forces to tackle problems, and 34 percent are concerned they won’t have the skills they need in the next several years. Only 32 percent said they can shift resources easily to address emerging or critical needs.

The insurance workforce of the future: why will so many insurers fail to achieve their digital potential
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Why, when and where people work. Digital has created not only changes to the physical and virtual workplace, but a new value proposition for working, with employers competing on democratized, customized work experiences. To adapt, insurers must develop strong employee value propositions that address the skills shortage that will result when the huge baby-boomer generation retires (most insurers in North America have an average workforce age of over 50). In preparation for this, 86 percent of insurers said their organization is adopting a customized approach to talent management to meet the needs of individuals or groups of employees. Not all insurers are this prepared, though: 60 percent of property & casualty insurers said the lack of a culture that supports innovation is a challenge to digital transformation, and only 29 percent said creating a digitally empowered organization is a very important strategic priority.

How work is led and managed. The digital environment requires new ways of leading and managing work. Leaders must walk a fine line between guarding core values while experimenting with products, services, and structure. Insurance seems to recognize this: 53 percent of high-performing insurance companies said building the right leadership teams is very important. However, while 42 percent of insurance employees considered management’s tolerance of failure to be very important, only 12 percent thought their company does this effectively to foster a culture of experimentation.

Next week we will discuss specific ways in which insurers can adapt to the workforce changes wrought by the digital revolution.

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The insurance workforce of the future: Why will so many insurers fail to achieve their digital potential?

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