“Insurance is one of the industries I cover for CNBC, so I look forward to discussing the top issues of the day at one of its premier events,” Brewer said. “Given 2021’s extreme weather, high-profile cyberattacks, and economic volatility, insurance has been in the news constantly, so there are plenty of things to talk about.”
The 2021 JIF is being held at the New York Hilton Midtown. The in-person, daylong program, bringing together the most accomplished thinkers and leaders in insurance, will be conducted in accordance with New York City’s Covid-19 protocols.
“CNBC is a recognized world leader in business news and reaches millions of Americans across all of its platforms,” Kevelighan said, adding that he looks forward to “a robust discussion” with Brewer. The agenda also includes panels on insurance economics, insurer talent and recruitment initiatives, and the societal costs of runaway litigation.
If you didn’t quit your job this year, chances are you’re thinking about it: 41 percent of the global workforce is considering leaving their employer this year according to a Microsoft study.
U.S. workers are quitting in record numbers: 4.3 million resigned in August, nearly 3 percent of the U.S. workforce and the most in the 20 years since Department of Labor began keeping track. This followed 3.98 million resignations in July and 3.99 million in April.
While the reasons so many workers are quitting now are often related to low wages and poor working conditions, the pandemic has also led many people with “good” jobs to reevaluate the role of work in their lives and to pursue jobs that are more meaningful to them. The mass exodus has employers worried.
According to a Gartner survey of human resource leaders, 91 percent are “increasingly concerned” about employee turnover in the near future. Employee turnover costs U.S. businesses close to a trillion dollars a year, by some estimates (made before the pandemic).
What does this mean for insurers?
To shed light on how the Great Resignation is affecting the insurance industry, we turn to the Jacobson Group’s Insurance Labor Market Study conducted in third quarter of 2021 jointly with Aon. The study found that insurance professionals who were waiting to make moves earlier in the pandemic are now exploring their options and re-evaluating their positions with their current employers – a situation that makes recruiting, especially at experienced levels, “extremely competitive.”
Other key findings from the survey include:
56 percent of companies plan to increase staff during the next 12 months, driven by the life/health segment, at 73 percent;
If the industry follows through on its plans, a 1.81 percent increase in industry employment is expected during the next 12 months;
Understaffed areas and business expansion were the top two reasons cited for increasing staff;
Technology is the area most likely to increase staff for large companies, followed by sales/marketing and underwriting;
Medium-sized companies want to increase staff in technology, followed by analytics;
Small companies have the greatest need for technology talent, followed by claims;
Technology and product management are the top two areas in which companies are looking to add experienced staff;
Technology, analytics, and actuarial positions are the most difficult to fill; and
Operations and actuarial roles were identified as areas most likely to add entry-level positions.
Not all insurers are looking to hire more workers; 13 percent report that reorganization and automation will be the primary reasons for staff reductions during the next 12 months.
What companies can do to retain talent
Leaders are advised to become more methodical in how they keep valuable human capital from walking out the door. According to Anthony Klotz – the professor of management at the Mays Business School at Texas A&M University credited with coining the term “Great Resignation” – employers often don’t give enough thought to the off-boarding process and employees often don’t give the real reasons that they are quitting. Instead of just having an exit interview in which employees are asked why they’re leaving, he suggests talking to their coworkers and friends at the company who will be aware of their actual reasons.
Once the main causes of turnover are identified, a company can create customized programs to correct these issues. According to Ian Cook, an HR strategist, “adopting a truly data-driven retention strategy isn’t easy, but it’s worth the effort to do it right, especially in the current market…. With greater visibility into both how serious your turnover problem really is and the root causes that drive it, you’ll be empowered to attract top talent, reduce turnover costs, and ultimately build a more engaged and effective workforce.”
Of course, salary and benefits are still important in retaining and recruiting. Sixty percent of American employees say the COVID-19 crisis has caused them to think more carefully about the benefits their employer provides and about 68 percent anticipate their workplace benefits to play a more critical role in their future job selection, according to research from Voya Financial, Inc.
Many workers report feeling overwhelmed and depleted, a condition the pandemic has exacerbated. Employers can use the pandemic as an opportunity to offer an outstanding employee experience by listening and engaging with their workforce. After surveying hundreds of workers, McKinsey has identified several factors that go into the creating the right environment. They include: a sense of social cohesion, and purpose; collaborative teams; clear responsibilities and opportunities to learn and grow; an organizational sense of purpose that aligns with workers’ personal values; and a suitable physical and digital environment that gives them the flexibility to achieve a work–life balance.
People who report having a positive employee experience have 16 times the engagement level of employees with a negative experience, and they are eight times more likely to want to stay at a company, McKinsey research found.
By Loretta Worters, Vice President – Media Relations, Triple-I
When you think about domestic violence, insurance typically isn’t top of mind. But financial security and access to resources can make all the difference to victims when deciding to leave an abusive relationship. And insurance is an important component of financial planning that can help survivors move forward.
Financial abuse is a common tactic used by abusers to gain power and control in a relationship. The forms of financial abuse may be subtle or explicit but, in general, include tactics to conceal information, limit the victim’s access to assets, or reduce accessibility to the family finances.
Growing evidence shows the pandemic has made intimate partner violence more common—and often more severe. Layoffs, loss of income, and living in isolation with abusers due to working remotely have dramatically increased the incidence of domestic violence, further hampering a victim from leaving an abusive situation.
Survivors struggling to get back on their feet may also be forced to return to their abuser. That’s why it’s so important that survivors understand how insurance works and what a critical role it can play in gaining financial freedom and economic self-sufficiency.
In support of Domestic Violence Awareness Month, Triple-I offers financial strategies to protect victims before and after leaving an abusive relationship. They include securing financial records, knowing where the victim stands financially, building a financial safety net, making necessary changes to their insurance policies and maintaining good credit.
The National Coalition Against Domestic Violence (NCADV) reports that 10 million people are physically abused by an intimate partner each year, and 20,000 calls are placed to domestic violence hotlines each day. In addition, 85 percent of women who leave an abusive relationship return because of their economic dependence on their abusers.
“Home is often times a dangerous place for survivors of domestic violence, and COVID-19 exacerbates the circumstances, due to the abusers’ ability to further control,” said Ruth Glenn, president and CEO of the NCADV. “Tactics abusers use include ruining the credit of their victim as well as financial and digital abuse, such as stimulus funds being co-opted by abusers to an increase in domestic online harassment,” she said.
Experts agree that domestic online harassment can come in many forms, from impersonating a victim by email to sabotage her work to controlling information about the pandemic to make her more fearful and dependent.
Since 2005, The Allstate Foundation has been committed to ending domestic violence through financial empowerment by helping to provide survivors with the education and resources needed to achieve their potential and equip young people with the information and confidence they need to help prevent unhealthy relationships before they start. The Allstate Foundation offers a Moving Ahead Curriculum, a five-module program that helps prepare survivors as they move from short-term safety to long-term security. Modules of the curriculum include: Understanding Financial Abuse; Learning Financial Fundamentals; Mastering Credit Basics; Building Financial Foundations and Long-Term Planning.
“One of the most powerful methods of keeping a survivor trapped in an abusive relationship is not being able to support themselves financially,” Glenn explained. “That’s why insurance and financial education are so important,” she said. “Education can save a life.”
As cyberattacks have increased in recent years, one area of particular concern has been those that target hospitals and health systems. These attacks have affected not only private information but also threatened the lives and well-being of patients.
A major shift
Hospitals rely more than ever on computerized systems to manage their information and systems. With the added complications related to the COVID-19 pandemic, the dangers associated with cyberattacks have only worsened.
“It’s part of a trend we’ve seen building over the last couple years, even before the pandemic,” said Scott Shackelford, chairman of the IU Cybersecurity Risk Management Program. Unfortunately, health-care providers are very much in the crosshairs. Not only do they often have insurance and deep pockets, but doctors need access to patient information to perform procedures and provide required services.
Because of this vulnerability and urgency, Shackelford said, “They are more likely to pay up.”
“If you look at the surveys that have been done, about one-in-three health providers have been hit by ransomware attacks just since 2020, and there’s been a 45 percent uptick in that rate since last December,” Shackelford added.
One recent attack, on Johnson Memorial Health in Franklin, Indiana, disabled its computer system. Although the hospital said it could still manage its patient intake, the loss of computer capabilities slowed operations down dramatically.
“We’re used to sending lab orders via computer, sending prescriptions to pharmacies via computer, so we’re going back to a real reliance on paper again,” Johnson Memorial President and CEO David Dunkle said. “We’re using more human runners, people taking lab recs between the ER and the lab.”
This has given hackers the ability to disable medical imaging devices like MRIs. They can then shut down or interfere with machines. A recent study by McAfeeEnterprise’s Advanced Threat Research Team uncovered that an IV pump created by German medical manufacturer B. Braun possessed a susceptibility that would allow hackers to change medicine doses remotely.
And while traditional phishing attacks require a user to open a corrupted file — a trend that is now on the decline — new attacks can use so-called Zero Click malware, which can infect a system merely through receiving a text or email.
Additionally, sensitive data that health systems possess gives hackers the opportunity to sell this information online — or threaten to — with demands rising into the millions of dollars. After a 2009 U.S. law was passed that required Medicare and Medicaid providers to implement electronic health records, these risks have only accelerated.
Life and death circumstances
Hospitals are now not only seeing the financial risks with cyberattacks, but the threat to their patients’ lives.
In July 2019, Springhill Medical Center faced a massive ransomware attack that disabled its electronic devices. This failure created dire circumstances for one infant, causing doctors to be unable to monitor the child’s condition during delivery. The infant died, and the hospital is being sued by the mother for malpractice—a charge Springhill denies.
Another attack in Düsseldorf, Germany in 2020 saw the death of a 78-year-old woman from an aortic aneurysm. What was supposed to be a routine pick-up turned into a nightmare, when the local hospital’s system was disabled by a ransomware attack, forcing the emergency department to turn away the woman and causing the ambulance to travel much farther. During this time, the patient’s condition worsened, and she eventually died.
With the vast amount of data and equipment at each of these health facilities—as well as the linked networks of many systems—the threat of cyberattacks in health care will only continue to grow unless more action is taken.
By Loretta Worters, Vice President, Media Relations, Triple-I
Insuretech Connect – the world’s largest gathering of insurance leaders and innovators – last week brought together insurance technology stakeholders to network, share insights, and learn about leading-edge technology across all insurance lines.
Conference participants included Pete Miller, president and CEO of The Institutes, who discussed risk mitigation through new technology.
“Capturing data about the things we do and then allowing us to mitigate risk before we even get to the insurance function, that’s really where I think this industry is going,” he said.
One panel, Climate Risk and Resilience, focused on the importance of Insurtech and innovation to the success and sustainability of the industry. Moderated by Triple-I CEO Sean Kevelighan, the panel included Sean Ringsted, chief digital officer at Chubb; Christie McNeill, associate partner with McKinsey & Company and leader of ESG and Climate Change for the Insurance Practice in North America; Alisa Valderrama, CEO and co-founder of FutureProof Technologies, a venture-backed financial analytics software company specializing in climate risk; and Susan Holliday, Triple-I nonresident scholar and senior advisor to the International Finance Corporation (IFC) and the World Bank, where she focuses on insurance and Insuretech.
“Insurers are no stranger to climate and extreme weather,” Kevelighan said. “They have had a financial stake in it for decades.”
He noted that insured losses caused by natural disasters have grown by nearly 700 percent since the 1980s and four of the five costliest natural disasters in U.S. history have occurred over the past decade.
U.S. insurers paid out $67 billion in 2020 due to natural disasters. The insured losses emerged in part as the result of 13 hurricanes, five of the six largest wildfires in California’s history, and a derecho that caused significant damage in Iowa.
This year’s Hurricane Ida is expected to cost insurers at least $31 billion and to push Hurricane Andrew out of the top five damaging storms. 2021 has been another record year for wildfires. January 1 to September 19, 2021 there were 45,118 wildfires, compared with 43,556 in the same period in 2020.
The panelists talked about how insurers have long been aware of climate risk and – to the extent that existing data-gathering and modeling technologies allowed – considered it in risk pricing and reserving. As information storage and processing have vastly improved, the industry has not only gotten better at underwriting and reserving for these risks – it has identified opportunities in areas it once could only view as problems.
Improved modeling, for example, has increased insurers’ comfort with and appetite for writing flood coverage and spurred the development of new products.
“Insurers are and always will be financial first responders, but there’s a growing realization that risk transfer alone isn’t enough,” Kevelighan said. “Insurance is one important step toward resilience. It’s well documented that better-insured communities recover faster from disasters. But more is required to address increasingly complex global risks.”
Triple-I CEO Sean Kevelighan will join a virtual panel on Wednesday, Oct. 13, at 11 a.m., ET, to brief public policymakers on ways to build a robust cyber risk insurance market.
“To allow businesses to operate safely in an increasingly interconnected world, insurers are working closely with their commercial customers to mitigate cyber risks and to make sure businesses have the right types, and amounts, of cyber insurance,” Kevelighan said. “However, as we are seeing increasing uncertainty in the extensiveness of cyber risk, it is also essential that we better understand the role government needs to play in particular around law enforcement and international diplomacy.”
As previously noted in The Triple-I Blog, some in the national security world have compared U.S. cybersecurity preparedness today to its readiness for large terrorist acts prior to 9/11. Before those attacks, terrorism coverage was included in most commercial property policies as a “silent” peril – not specifically excluded, therefore covered. Afterward, insurers began excluding terrorist acts from policies, and the U.S. government established the Terrorism Risk Insurance Act to stabilize the market.
“A balanced public-private partnership that recognizes where insurance can be a helpful financial responder, and how government is an essential preventative tool, will be critical to helping mitigate the ever-increasing cyber risks we are facing in the world,” Kevelighan said.