Insurance is the lifeblood of our capitalist society; without it commerce cannot function. A vibrant insurance industry requires skilled and trained knowledgeable workers who can understand the broad aspects of risk in a changing dynamic.
The economic climate continues to be difficult on a global scale and presents some long-term structural problems that will not be easily remedied. The past decade has presented enormous challenges, and unpondered “Black Swan” events. Major companies have disappeared entirely.
In the age of predictive analytics, CAT modeling, telematics, and structured solutions, the fundamental risk principles remain. The combination of technical training, practical experience, judgment, and ethics are as relevant today as at any point in time.
Our world is evolving and changing with amazing speed. New definitions of risk are only beginning to be anticipated and evaluated. As we look to a future with much uncertainty, even more unpondered challenges will appear.
Organizations prompted by stakeholders and ratings agencies are delving into the broader definitions of enterprise risk. New skill sets and backgrounds are required, and insurance education is a critical in this changing risk dynamic.
Industry Demographics
The U.S. property/casualty industry is going through an unprecedented demographic shift as a generation of insurance knowledge workers, the baby boomers, enters into the early stages of a career retirement cycle. These workers have been seasoned by a variety of market cycles and experiences with evolving risks; many are specialists with decades of experience in specific coverages or claims issues.
Replacing them will not be a matter of finding bodies and putting them in chairs with a modicum of training. Their replacements will need to be sourced from universities and trained and developed over the course of time. They will require mentoring and knowledge transfer from exiting workers. This is a daunting task and we are behind the curve at this point.
New programs in risk management and insurance will need to be developed while existing ones will need to be enhanced to meet this training need. Companies will need to work in a coordinated fashion to attract, recruit, hire and train these workers.
Insurance Carriers
Looking ahead, this industry is facing pressures to invest in emerging technologies and service capabilities. Risk selection and claims efficiencies will be critical to help differentiate one company from its competitors. Insurance education can be such a differentiator.
The return on investment from better educated and trained employees is often difficult to calculate. However, what is the return of a bad risk that is not put on the books by better trained underwriters? What is the value of a claim that is adjudicated with minimal leakage and improved outcomes? What is the value of a trained workforce that understands the knock-on effects of each and every activity and helps to enhance efficiencies overall? In this context, insurance education is not just a cost — it is an investment that will pay dividends over time.
Agents and Brokers
Margins are increasingly under pressure at global, regional, and local agencies. Agencies face the combination of depressed commission and fee income from a highly competitive market that is increasingly commoditized, and a demand to deliver to clients increasing (and expensive) analytical services. Every dollar of expense is closely scrutinized and insurance education dollars need to be earmarked carefully.
The role of an agent has evolved to an increasing sales role and insurance education is often tailored to a more narrow scope to support the specific coverages provided by the agent.
From a larger perspective, over time, more in depth generalist insurance education is extremely helpful. Ultimately, an agent seeks to be an indispensable “most trusted business advisor” to their clients — someone able to respond to a variety of risk challenges with prompt and thorough expertise. Superior sales and support services provided by the agency also serves to mitigate the risks they face from errors and omissions exposures. Better trained agents mitigate this exposure and better served clients drive superior returns to the firm.
Topics Trends Agencies Market Training Development
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