Automation, artificial intelligence, IoT and other advancements are disrupting the insurance industry, creating a wealth of possibilities for digital transformation and evolution.
Savvy insurers are embracing these new capabilities, adjusting strategies and processes to meet evolving customer expectations, and exploring how to leverage emerging technologies long-term. In the current business landscape, innovation is paramount; organizations that fail to adapt and evolve will eventually fall behind.
While the insurance industry has traditionally been slow to change, the COVID-19 pandemic forced many insurance organizations to quickly adopt new ways of working. According to Boston Consulting Group, the industry’s digital transformation has been accelerated by at least five years as a result of the pandemic.
As insurance organizations navigate uncharted territories, new divisions are forming internally and insurtechs are being leveraged to support new ventures. Global insurtech funding was up 21% in 2020 compared to 2019, with property and casualty accounting for 45%. Reports show the global insurtech market is expected to grow by a compound annual growth rate of nearly 50% from 2021 to 2028, reaching $60.98 billion in the next seven years.
Resisting change is no longer an option, even for the most traditional carriers. Today’s leaders must be future-focused and able to inspire and support new ideas and solutions within their teams.
It’s important for insurance organizations to proactively disrupt themselves before being disrupted by external factors. Help your team understand that while change is inevitable, they can control how they lean into change to positively affect organizational outcomes. Invest in technology and innovation, even if it is not an immediate direct profit center. By cultivating these areas now, you’ll be prepared to tap into future opportunities and continue to evolve alongside shifting customer demands.
While it can be easy to feel insurtechs are a threat, consider their positive impact rather than viewing them as adversaries. The growth of insurtechs is pressuring the entire industry to collectively step up its game. Insurers are creating new divisions, launching new products, and providing customers with more personalized and relevant experiences. Startups and insurtechs are able support these endeavors, filling gaps and helping move ideas and capabilities forward.
Develop Technology Talent In House
As digital advancements continue to be made, ensure you have the right technology expertise in house. In our Q3 2021 Insurance Labor Market Study, conducted in partnership with Aon plc, technology roles were the most in-demand among insurers, and also the most difficult to fill.
Hire and retain these individuals now, building internal experts who are ready to assist in future technology implementations and transformations. Successfully integrating new systems and software can take several years and may not always go as planned.
Knowledgeable individuals who understand your company and its needs can serve as liaisons with external vendors and software companies, helping processes go smoother and enabling you to achieve your goals faster.
Focus on Potential Over Tenure
It’s common for insurance organizations to follow linear career paths, ensuring individuals put in their time before moving on to the next stage of their career. However, as insurtechs begin to recruit talent from traditional insurers, they’re more focused on an individual’s potential than their past experience. Consider how you can incorporate this approach within your own talent acquisition and development strategies. While technical skills are important, areas such as emotional intelligence, agility, communication, leadership and curiosity are key to long-term success. Individuals with these traits are more likely to grow and adapt with your team, champion new ideas and effectively tackle unfamiliar projects.
Foster a Growth Mindset
Individuals with a growth mindset know that new skills and competencies can be learned and developed. Talent and intelligence are just starting points to be built upon. Encouraging this method of thinking within your team serves as a catalyst for ongoing innovation and forward movement. Praise effort and strategy, even if the desired outcome was not achieved. Failure is an opportunity to learn; ask individuals what they could do differently next time, how they plan to move forward and how past failure will influence future strategies.
Create Interdisciplinary Project Teams
Interdisciplinary teams with diverse perspectives can help set the foundation for innovation, while encouraging robust dialogue and productive discourse. This is key in smoothly adopting new technologies, processes and ideas, while ensuring stakeholder needs are met. By consulting multiple departments, it’s more likely you’ll avoid potential roadblocks while engaging in more informed decision-making. If your organization is currently operating in a remote or hybrid capacity, consider bringing these individuals together in person when possible — even if it’s once or twice a year — to share new ideas and foster continued innovation.
As the business world continues to transform, insurance leaders must be prepared to adapt along with it. Agility and a willingness to evolve are necessary for staying relevant and competitive. By employing talent with necessary skills, encouraging growth and prioritizing innovation, organizations will be prepared to rise to new challenges and drive the industry forward.
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