Here’s a fun way to place the broadening P&C talent gap in some context:
1.) Do you work at a P&C Insurance Carrier?
2.) Is the inability to find exceptionalgood sufficient talent materially impacting your business?
If #1 is “Yes”, then we both know the second answer. The stats aren’t difficult to find:
Average age in the P&C industry is 56
400,000 P&C jobs to fill by 2020
25% of current insurance professionals to retire by 2018
And so on…
An Increasingly Common Answer
Not surprisingly, the insurance business process outsourcing market continues to expand at YOY double-digit growth. Accelerating this trend is a broader understanding in the boardroom that “outsourcing” doesn’t mean “offshore sweat shop”. These days, the business case isn’t even necessarily a cost play. Today’s business process outsourcing market enables P&C carriers to quickly enhance capabilities, broaden distribution, tap into innovation, and often times deliver a customer experience superior to the one those resistant to change aim to protect. It can be supplementary; not necessarily job-replacing.
Nonetheless, P&C carriers remain challenged: most P&C business processing outsourcing vendors mandate the usage of their policy administration and/or claims platform for the delivery of operational services. But what about the carriers that just completed (sort of) a multi-year, multi-million, multi-CIO implementation or modernization project? What about the carriers that’ve concluded that simply re-facing their legacy system with customer engagement & workflow enhancements likely yields a commensurate ROI a heckuva lot faster? Or in short: what about the carriers that don’t need a new platform?
Beyond technology constraints, many companies simply don’t need full-blown outsourcing. Often times more targeted or “surgical” support would help a carrier achieve operational, production growth, or retention objectives:
Free up precious Underwriting Talent to focus on more valuable risk review & selection
Claims: Outbound Claim Status Updates
Customer experience, and thereby retention, is materially improved when the insured feels informed
Sales: Outbound sales support to follow-up on prospects (for Agent Partners or Direct Carriers)
Expand distribution reach (particularly effective 5 – 7:30 PM local time)
The (Very) Short List
While a shorter list, P&C operational support companies that deliver services on their clients’ platforms actually do exist. The list shrinks if criteria include “U.S. Based”, shrinks further at “A-la-Carte / Targeted Services”, and even further yet at “Licensed Producers to Support Distribution”. OK; too obvious? If you’d like to know how we help P&C companies “plug the gap”, drop us a line at firstname.lastname@example.org or check us out at www.cxis.com.
By Joseph Richard Serrano
President, CX Insurance Services
The Insurance Industry – particularly P&C – harbors complexity not found in most others. Fragmented distribution models, supply chain hand-offs, and pervasive regulatory requirements collectively create a challenging environment for Agent & Policyholder experience. As product and price competition grow increasingly difficult for insurance companies, customer experience is becoming the next battleground for differentiation.
Some food for thought…
Nearly 2 out of 3 policyholders are at risk of non-renewal with only a neutral and/or negative customer experience
Among least satisfied policyholders, only 39% indicate they’re likely to renew and only 44% say they’re likely to recommend their insurer
Among highly satisfied policyholders, 86% say they “definitely will” or “probably will” renew their policy, while 96% say they “definitely will” or “probably will” recommend their insurer
Source: J.D. Power
Except for pieces of paper (for those who still want them), insurance companies don’t sell something people can touch, feel, or hold. They sell a promise. Because of this – and because technology continues to empower consumers with choice, convenience, and speed – customer experience has become table stakes for today’s insurance organizations.
Unfortunately, most don’t have the expertise or time to quantitatively measure their Agent & Policyholder experience – nor manage it as a continuous improvement program. They’re certainly not getting this from their BPO vendors.
Fluff? Not likely. A Forrester Research index of customer experience-leading companies has posted an average ten year stock return of 213% vs. the S&P 500 average of 75% from July 2004 – July 2014 (Source: Forrester Research). It’s not hard to envision the financial impacts of a strong customer experience when considering those that got it right: USAA, Southwest, Amazon, and so on. Although as a whole we’re playing catch-up, some in our industry are getting it right too. These and other P&C organizations that prioritize customer experience as a C-Level initiative will win the next battleground for differentiation.
By Joseph Richard Serrano
President, CX Insurance Services
There seem to be three “common truths” amongst those of us in the insurance industry:
Everyone gets into the insurance business “by accident”
For a huge industry, it’s an amazingly small world
Insurance is the best-kept secret in Financial Services: nice salaries, relatively sane work/life balance, but without the curb appeal of some of those banking gigs
With regards to this last point – given the alarming talent shortage that is growing across the P&C industry, I wonder if this has been a best-kept secret perhaps kept a little too well. Securing talent with the insurance expertise needed to “run the shop” is becoming an increasingly challenging proposition for today’s Carriers, MGAs and Program Administrators.
Some eye-opening data:
The average age of an insurance industry professional is 54
60% of insurance industry professionals are older than 45
70% of claims adjusters are older than 40
Source: Deloitte Research
This problem is growing worse on account of two trends: the retirement of Baby Boomers, and a growing skills gap. Over time, hopefully we’re able to transform a common perception of the insurance industry as outdated and stodgy amongst young job seekers. But in the meantime, insurance companies must think about the problem differently.
The global insurance BPO market has grown to US $2 billion, and continues to expand at 17% year-over-year growth (Source: Everett Research). However, BPO models are transforming from pure cost-saving “lift & shift” maneuvers to more strategic in nature – for both full enterprise operations and more surgical, function-specific approaches. Quality control and communication concerns with off-shore outsourcing are consequently driving demand for on-shore BPO partners. Those U.S. based BPO organizations that are able to package meaningful value-add services alongside traditional business processing will continue to differentiate across insurance companies as the talent gap widens.