The ‘Talent Problem’ in Insurance – can it be solved?

Isn’t it interesting that whenever you talk to someone in (re)insurance about how they first got into the industry, the answer is always something along the lines of ‘I fell into it by accident’ or ‘I got introduced to someone and they found me a job’.

Quite incredible really that a c. $5 trillion (Life, Health & P&C combined premium income) global industry has a talent pool developed ‘by accident’! Take nothing away from the great talent we already have in our industry, but could we do more?

In this week’s article I explore some of the themes around why this might be, how the industry could do a much better job of attracting talent as the skills and attributes required to be successful in the future change, and how insurance technology (‘InsurTech’) could hold the key to bringing in greater diverse talent to our industry in a more deliberate and systematic way.

Here goes…..

2011 – The year I almost said goodbye to the industry. Thankfully Lady Luck intervened.

About a decade ago back in 2011, I found myself at a low point. Five years into my professional career I was not enjoying my day job, found getting up in the morning to go to work to be a real chore and felt truly stuck and disengaged.

Like many before (and after) me I’d fallen into insurance ‘by accident’. It was a job in the ‘City of London where the action was’, paid well relative to other career choices (excluding investment banking) and seemed to be a career which offered a number of different growth opportunities. Unfortunately, I just couldn’t get engaged with the role I had and I think a lot of the problem was that I hadn’t been given the opportunities to properly develop my knowledge of the industry and take on stretching assignments. It was at that point that I seriously considered throwing in the towel and starting over in a completely different field.

Enter stage left – a well-respected insurance executive came into my life. We got on well and this individual noticed I wasn’t enjoying where I was or what I was doing. After a few coffee chats during which they offered up a lot of sound advice the diagnosis was simple, ‘Premal, you need to move on to pastures new to really learn how the industry works, because once you understand that you start to realise how fascinating it is, but also where there are problems that need solving. That’s where the opportunities are and they are exciting, plentiful and huge!’. I must admit I was rather sceptical, but thought I had nothing to lose so it was worth a second shot.

I took the advice, changed jobs and after a few lucky twists and turns a decade on I’m still in the industry today. More importantly, I absolutely love what I do and can gladly say I’m fascinated everyday by developments in the (re)insurance industry.

I was very lucky. Without that fortuitous intervention, who knows where I’d be today. It’s very likely that I wouldn’t be working in the (re)insurance industry in 2021.

So that begs the question…how many talented people are out there in our industry who might be feeling how I felt all those years ago, and conversely how many talented people are out there that have never considered our industry as a realistic career choice? Unfortunately, many organisations have a bad habit of talking about ‘talent development and retention’, but it all too often appears to be simple lip service.

It’s time to shake up our approach to talent in the industry. The future of our industry is dependent on it. That starts with how our industry is communicating its value proposition to the outside world…

An Observation – our industry has traditionally been very poor at selling its value proposition to others

If you haven’t read Stephen Catlin’s book Risk & Reward (written pre-Convex launch), then I’d certainly recommend getting a copy. In it, he talks about how the commercial (re)insurance industry has historically done a very poor job of selling its value proposition to clients and those outside of our industry. I agree 100%.

I also think this observation is inextricably linked as to why our industry struggles to attract talent that might otherwise end up in the technology, banking & capital markets or the consulting industries. Most people do not see the value of insurance until they experience a loss (certainly not when they purchase insurance), and when they do many unfortunately end up in disputes with their insurance company to have their claim paid. This type of reputation (whilst thankfully in the minority) follows us around like a bad smell. There’s no doubt that that type of reputation influences people in their career choice. I’m certain of that.

So how can the Talent Model be approached?...

Talent through 3 lenses – Acquisition, Development & Retention

In my eyes, the Talent Model can be broken down into 3 constituent parts – Acquisition, Development and Retention. Let’s take each in turn.

Acquisition. How do most industries attract people to come and work there (especially young people and recent graduates)? Typically, it can take the form of ‘University Milk Rounds’ which involves corporations coming onto campus to share what they do, how they do it and why graduates should choose them over others. I think the banking and management consultancy industries have done this particularly well to attract the best and brightest.

When I was a newly-minted graduate, the big global banks, Big 4 accounting firms, FMCG companies (P&G, Unilever etc) and strategy houses dominated the Milk Rounds and swarmed the various events promising graduates fabulous careers, growth opportunities and very competitive compensation packages. Where were the insurers? – I don’t remember even one being there. People today tell me that it’s not materially better 15 years later. It surely has to start there plus utilizing social media platforms (e.g. LinkedIn) to continue to promote the virtues of a career in the (re)insurance industry? That misnomer of our industry being ‘boring’ has to be quashed and quickly before takes hold in the minds of young people researching career options. Anyone who works in our industry today will actually tell you how intellectually fascinating it really is.

Development. Once people are in our industry working for an insurer, broker etc then how are their careers typically developed? It’s usually a mixture of 3 elements – exposure, experience and education.

Exposure is the concept of ‘learning by osmosis’ i.e. being around other more experienced colleagues that can teach, mentor and guide.

Experience is as it says on the tin – being given opportunities to lead projects, initiatives and learning through a trial and error process typically supported by team members and colleagues.

Finally Education. This is the more ‘in-classroom’ style learning that companies support either through on-site training offered by internal colleagues or an external specialist firm.

How many of of us can seriously say we're doing an amazing job at each of these?

Retention

Once you’ve got talent in (acquisition) and trained them (development), how are you able to retain the best people? – it’s usually a mixture of competitive compensation (we all work in a talent marketplace after all!), ensuring your best people feel heard & valued and they’re given the best opportunities to grow, develop and get promoted.

Could InsurTech be the ‘unlock’ for talent in our industry?

Insurance Technology (‘InsurTech’) has been growing at an accelerated rate over the past few years. A recent report by Willis Towers Watson highlighted that H1 2021 saw more VC funding in InsurTech than in the whole of 2020, the last full record-breaking year. Full year 2021 will see us smash that record to pieces.

In my line of work, I have the privilege of meeting some of the world’s most cutting-edge InsurTech start-ups and scale-ups, as well as their VC backers. I can honestly say that the level of talent is of usually very-high quality, but most importantly the ‘can do’ attitude by founding teams and their businesses is infectious. Everything from coding experts, data scientists, ex-brokers, underwriters, claims professionals through to actuarial and finance experts can be found at leading InsurTechs. These hyper-growth players know how to engage their talent around a mission, they’re highly-energised and are prepared to break through challenges. These vehicles seem to have a knack for attracting great talent, developing and retaining it.

I genuinely believe that InsurTech’s have not only been a great thing for our industry to make us more efficient, better underwriters and more relevant to our clients, but the new wave of talent coming into InsurTechs has been a real boon to our industry.

A Call to Arms…

If you’re responsible for Talent, then honestly ask yourself if you’re doing everything you possibly can to ensure you’re selling the insurance value proposition to those you interact with, are acquiring/developing/retaining the best talent you possibly can and are you looking beyond the traditional (re)insurance arena to source diverse and exciting new talent.

If you are then I commend you. We need more people like you. Why? – the future of our industry will be shaped by technology, doing a better job of selling our value proposition and ensuring we’re continuing to stay relevant by meeting the unmet needs of our clients and brokers.

But most of all the future of the (re)insurance industry will be shaped by our Talent. That’s why it’s critical we continue to level up in how we approach it. Our industry’s ongoing relevance depends on it. Period.

Disclaimer: This article represents solely my own views and not those of my employer or any other third-party