Category Archives: Careers and Employment

Invest in Technology — But Don’t Forget
to Invest in People

A recent survey of insurance underwriters found that 40 percent of their time is spent on “tasks that are not core” to underwriting. The top three reasons they cited are:

  • Redundant inputs/manual processes;
  • Outdated/inflexible systems; and
  • Lack of information/analytics at the point of need.

The survey – conducted by The Institutes and Accenture – also found that underwriting quality processes and tools are at their lowest point since the survey was first conducted in 2008. Only 46 percent of the 434 underwriters who responded said they believe their frontline underwriting practices are “superior” – which is down 17 percent from 2013.

“While underwriters believe technology changes have improved underwriting performance, 64 percent said their workload has increased or had no change with technology investments,” Christopher McDaniel, president at The Institutes Catastrophe Resiliency Council, told attendees at Triple-I’s Joint Industry Forum.

The survey’s findings with respect to talent may shed some light on this. The number of organizations viewed as having “superior” talent management capabilities for underwriting fell 50 percent since 2013 across almost every measure of performance evaluated.

“Training, recruiting, and retention planning had some of the biggest drops, particularly for personal lines,” McDaniel said. About a quarter of personal lines underwriters said they view their company’s talent management programs as deficient.  That rate rose to 41 percent for talent retention; 37 percent for in succession planning; 33 percent for in training; and 30 percent for recruiting

“While technology investment may have improved underwriting performance” in terms of risk evaluation, quoting, and selling, McDaniel said those improvements “appear to have come at the expense of training and retaining underwriting talent,” McDaniel said.

Even before the pandemic and “the great resignation,” insurance faced a talent gap.  Part of the challenge has been finding replacements for a rapidly retiring workforce, as the median age of insurance company employees is higher than in other financial sectors.

McKinsey study that assessed the potential impact of automation on functions like underwriting, actuarial, claims, finance, and operations at U.S and European companies found that as underwriting  becomes more technical in nature it also will require more social skills and flexibility. Respondents to the McKinsey survey said automation and analytics-driven processes will produce a greater need for “soft skills” to shape and interpret quantitative outputs. Adaptability will also become more important for underwriters to stay responsive to changing risks and learn new techniques as technology changes.

“Underwriters will not become programmers themselves,” the McKinsey report said, “but they will work extensively with colleagues in newer digital and data-focused roles to develop and manage underwriting solutions.”

Insurers Focusing
on Retention and Recruitment

Credit for all photos in this post: Don Pollard

Retaining and recruiting talent has been a priority for years, but the pandemic changed how insurers approach these needs, a panel of experts concluded at Triple-I’s Joint Industry Forum (JIF) last week.

The panel examined whether insurers’ growing comfort with remote work will lead to a more diverse workforce and if technological advances would give insurance industry employees more time to create value rather than allocating too much time toward administrative assignments.

“This industry offers so much to so many,” said Connecticut Insurance Commissioner Andrew Mais. “The pandemic accelerated the need for new talent. By casting a wider net, we can find new entrants who want to do meaningful work and make a difference. Attracting data scientists and new skill sets to the industry broadens our reach to new talent.”

“The pandemic accelerated our level of engagement with employees” said Deepa Soni, chief information officer for The Hartford. “We are championing mental health, supporting women in tech, caring for the whole person. The acquisition of new talent brings transformation to the insurance industry through flexibility, culture and purpose-driven work.”

Soni added that more flexible working arrangements have increased employee retention at The Hartford.

Victor Terry, State Farm’s chief diversity officer, said, “Start with the individual. What do they need to be their best and thrive? Redefine what the culture is and what does ‘good’ look like.”

“Vulnerability is a key trait for good leaders,” said panel moderator Lisa Butera, managing director and head of property/casualty client markets – U.S. for Swiss Re. “Leadership with empathy and authenticity is key.”

Butera said the industry is shifting to new technology to better serve customers and make work more efficient and “less clunky” for employees.

“Training existing employees and attracting new employees with tech skills will help to fill the current talent gaps,” Butera added.

The Hartford’s Soni noted her company offers a tech boot camp for claims professionals and underwriters, and State Farm’s Terry added, “New tech allows innovation and creativity – more time for passion projects.”

Learn More About Insurance Talent on the Triple-I Blog

Bridging the Insurance “Talent Gap”

How Insurers Can Manage the “Great Resignation”

Bridging the Insurance “Talent Gap”

By Maria Sassian, Triple-I consultant

Even before the pandemic and “the great resignation,” insurance faced a “talent gap”.  Part of the challenge has been finding replacements for a rapidly retiring workforce, as the median age of insurance company employees is higher than in other financial sectors.

The industry also needs new talent skill sets to tackle rapidly evolving risks and accelerate digital progress.

A major U.S. employer

Insurers employ nearly 3 million people in the United States, many with uniquely insurance-specific jobs, such as claims adjusters, underwriters, risk managers, and agents. Many other workers – like accountants, human resources managers, or data analysts – could work in many different industries.

Filling insurance-specific roles has been a particular challenge. When Triple-I’s Chief Insurance Officer, Dale Porfilio, worked in personal lines for major carriers, companies routinely had staffing shortages in both claims and underwriting – two of the largest staff populations in a property/casualty company. The shortages were due mainly to companies struggling to replace retiring adjustors. A similar need existed in underwriting, as people early in their careers commonly used their insurance positions as a stepping stone to other opportunities.

The industry also competes with other sectors for technology talent, particularly for digital, design, data, and analytics roles, according to McKinsey, and to integrate new capabilities into the business. During the pandemic, insurers have quickly and successfully moved many of their interactions with customers onto digital channels. While this shows the industry’s potential for rapid digitalization, according to an EY report, the pandemic has exposed gaps in digital capabilities, especially in products, distribution, and the need to upgrade legacy systems. 

Not all companies are equally challenged by the talent gap. Grinnell Mutual, based in Grinnell, Iowa — a rural area of about 10,000 residents – experiences lower-than-average turnover, according to Brian Delfino, vice president for direct claims at Grinnell. Many employees have been with the company for more than 15 years. During the pandemic, Grinnell Mutual adopted a “work-from-anywhere” policy and is now able to attract talent from farther afield.

Automation’s impact

A McKinsey study assessed the potential impact of automation on functions like underwriting, actuarial, claims, finance, and operations at leading U.S and European companies. It found that 10 to 55 percent could be automated over the next decade. This won’t necessarily lead to staff reductions and might free employees from routine tasks to perform higher-value activities.

McKinsey predicts automation will speed up the changes in needed skills in unprecedented ways: the need for technological skills will increase 55 percent from 2021 through 2030, while the need for basic skills like data entry will decline by 15 percent.  

As more knowledge work is automated, the workforce will require more creativity, critical thinking, and social intelligence to shape and guide them.

Insurance executives surveyed by McKinsey said underwriting will not only become more technical but also require more social skills and flexibility. Respondents said automation and analytics-driven processes will produce a greater need for soft skills to shape and interpret quantitative outputs. Adaptability will also become more important for underwriters to stay responsive to changing risks and learn new techniques as technology changes.

Upskilling and reskilling

Bright people with raw talent, energy, and adaptability make excellent candidates for internal training. Denise Campbell,  a Marsh senior vice president, graduated from New York University with a major in music technology. She joined AIG as an administrative assistant and, when offered a promotion, admitted to her manager that she had no experience in the field.

 “We can teach you the skills you need to do the job,” her manager countered, “but we can’t teach someone to be you.”

Reskilling and upskilling are vital to meeting insurers’ future talent needs because hiring externally is expensive and time consuming. Replacing an employee can cost more than 100 percent of the role’s annual salary, while successful reskilling can cost less than 10 percent, according to McKinsey.

“Since growth in digitization is moving so quickly, an agile workforce that’s open to re-skilling constantly is crucial,” said Frank Tomasello, executive director at the Institutes Griffith Foundation.

A good learning and development program will incorporate the latest insights on adult learning methods, and combine in-person, digital, and—especially important—on-the-job learning, where a whopping 80 percent of adult learning happens. The Institutes – a leading provider of insurance education – develops courses based on the latest knowledge about how people learn, incorporating videos and animation and breaking down learning into manageable chunks. Triple-I is an affiliate of The Institutes.

Diversity and innovation

Insurers are making diversity and inclusion a priority, and there are many reasons to do so: Research indicates that more diverse companies tend to perform better; customers  increasingly  prefer companies that demonstrate values like social equity; and a more diverse workforce is more appealing  to workers.

The industry has long known of the valuable role internship programs play in its quest to find fresh talent. Grinnell Mutual has a top-ranking co-op and internship program that draws recruits from many universities in Iowa.

Going into high-schools and getting an early start in reaching potential employees is another valuable step in building the talent pipeline. Nicole Riegl, president of the Agent and Broker Group at The Institutes, is on the board of directors at Invest℠ an organization that connects insurance professionals with teachers. Invest volunteers visit the classroom to teach students about insurance and share their career experiences.

And recently, insurance giant, Zurich North America announced plans to hire apprentices in at least nine cities, as well as in certain agricultural areas where Zurich’s crop insurance business operates.

“We’re growing the Zurich Apprenticeship Program because apprentices have brought value to our business from the very beginning,” said Zurich North America CEO Kristof Terryn. “This is a talent source that has proven its value and versatility through many different market conditions, including at the height of the pandemic, when we expanded our program from our suburban Schaumburg headquarters to New York City.”

As the industry evolves, it can continue to leverage one of its greatest assets for attracting talent – its appeal to people who are drawn to work that puts a premium on human relationships. The industry’s role as a financial first responder that helps people get back on their feet after a disaster and as a provider of sophisticated financial instruments that encourage responsible risk taking, is certain to continue to draw people who are looking for meaningful work.

JIF 2021: Risk & the “New Normal”

Insurance industry decision makers and thought leaders gathered yesterday for the Triple-I Joint Industry Forum (JIF) in New York City to share insights on managing risk in the post-pandemic world.

The in-person, daylong program was conducted in accordance with New York City’s COVID-19 protocols. Topics ranged from climate and cyber risk and the impact of “runaway litigation” on insurer losses and policyholder premiums to the challenges and opportunities presented by “the Great Resignation” for acquiring and nurturing talent in the industry.

The panels featured speakers from across the insurance world, academia, and media. Watch this space next week for panel wrap-ups.

How Insurers Can Manage the “Great Resignation”

By Maria Sassian, Triple-I Consultant

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.

Declarations of Pride: Ricardo Lara, California Insurance Commissioner

By Scott Holeman, Media Relations Director, Triple-I

California Insurance Commissioner Ricardo Lara made state history by becoming the first openly gay official elected to statewide office. During our Declarations of Pride series, he shared his unique journey with Triple-I, by discussing his entry into politics, views on how the insurance industry is supporting the LGBTQ+ community and what Pride Month means to him.

Lara says important steps are being made by the insurance industry to advance LGBTQ+ rights.

Lara says #Pridemonth is an important time to honor LGBTQ+ civil rights pioneers, but also for understanding obligations that remain in the fight for equality.

Insurance Careers Corner: Q&A with Sunil Rawat, Co-Founder and CEO of Omniscience

By Marielle Rodriguez, Social Media and Brand Design Coordinator, Triple-I

Sunil Rawat

Triple-I’s “Insurance Careers Corner” series was created to highlight trailblazers in insurance and to spread awareness of the career opportunities within the industry.

This month we interviewed Sunil Rawat, Co-Founder and CEO of Omniscience, a Silicon Valley-based AI startup that specializes in Computational Insurance. Omniscience uses five “mega-services” that comprise of underwriting automation, customer intelligence, claims optimization, risk optimization, and actuarial guidance to help insurance companies improve their decision-making and achieve greater success.

We spoke with Rawat to discuss his technical background, the role of Omniscience technology in measuring and assessing risk, and the potential flaws in underwriting automation.

Tell me about your interest in building your business. What led you to your current position and what inspired you to found your company?

I’m from the technology industry. I worked for Hewlett Packard for about 11 years, and hp.com grew about 100,000% during my tenure there. Then I helped Nokia build out what is now known as Here Maps, which in turn powers, Bing Maps, Yahoo Maps, Garmin, Mercedes, Land Rover, Amazon, and other mapping systems.

I met my co-founder, Manu Shukla, several years ago. He’s more of the mad scientist, applied mathematician. He wrote the predictive caching engine in the Oracle database, the user profiling system for AOL, and the recommender system for Comcast. For Deloitte Financial Advisory Services, he wrote the text mining system used in the Lehman Brothers probe, the Deepwater Horizon probe and in the recent Volkswagen emissions scandal. He’s the ‘distributed algorithms guy’, and I’m the ‘distributed systems guy’. We’re both deeply technical and we’ve got this ability to do compute at a very high scale.

We see an increasing complexity in the world, whether it’s demographic, social, ecological, political, technological, or geopolitical. Decision-making has become much more complex. Where human lives are at stake, or where large amounts of money are at stake on each individual decision, each individual decision’s accuracy must be extremely high. That’s where we can leverage our compute, taken from our learnings over the last 20 years, and bring it to the insurance domain. That’s why we founded the company — to solve these complex risk management problems. We’re really focused on computational finance, and more specifically, computational insurance.

What is Omniscience’s overall mission?

It’s to become the company that leaders go to when they want to solve complex problems. It’s about empowering leaders in financial services to improve risk selection through hyperscale computation.

What are your main products and services and what role does Omniscience technology play?

One of our core products is underwriting automation. We like to solve intractable problems. When we look at underwriting, we think about facultative underwriting for life insurance where you need human underwriters. The decision-making heuristic is so complex. Consider somebody who’s a 25-year-old nonsmoker asking for a 10-year term policy of $50,000 — it’s kind of a no-brainer and you can give them that policy. On the other hand, if they were asking for $50 million, you’re certainly going to ask for a blood test, a psychological exam, a keratin hair test, and everything in between. You need humans to make these decisions. We managed to take that problem and use our technology to digitize it. If you take a few hundred data fields, and a few 100,000 cases to build an AI model, it quickly becomes completely intractable from a compute standpoint. That’s where we can use our technology to look at all the data in all its facets — we automate and use all of it.

Once you’ve got an AI underwriter’s brain in software, you think from the customer intelligence standpoint. You’ve got all this rich transaction data from your customers to pre-underwrite, qualify, and recommend them for different products. We’ve also built a great capability in the data acquisition area. For workers comp and general liability, we have the data that improves the agent experience. We can also correctly classify any NAICS codes and can help with claims avoidance and finding hidden risk. We’ve also got a great OCR capability. In terms of digitization of text, we can take complex tabular data and digitize it without any human in the loop. We’re able to do this worldwide, even in complex Asian languages. We also do a lot of work in asset and liability management and can do calculations that historically have been done in a very low-powered, inaccurate manner. We can run these calculations daily or weekly, vs annually, which makes a big difference for insurance companies.

We also work in wildfire risk. A lot of wildfire spread models look at a ZIP+4 or a zip code level, and they take about four hours to predict one hour of wildfire spread, so about 96 hours to predict one day of wildfire spread at a zip code level. In California, where I am, we had lots of wildfires last year. When you double the density of the grid, the computation goes up 8x. What we were able to do is improve and look at the grid at 30 meters square, almost at an individual property size. You can individually look at the risk of the houses. At a 30-meter level, we can do one hour of wildfire propagation in 10 seconds, basically one day in about four minutes.

Are there any potential flaws in relying too much on automation technology that omits the human element?

Absolutely. The problem with AI systems is they may generally be only as good as the data that they’re built on. The number one thing is that because we can look at all the data and all its facets, we can get to 90+ percent accuracy on each individual decision. You also need explainability. It’s not like an underwriter decides in a snap and then justifies the decision. What you need from a regulatory or an auditability standpoint is that you must document a decision as you go through the decision-making process.

If you’re building a model off historical data, how do you make sure that certain groups don’t get biased again? You need bias testing. Explainability, transparency, scalability, adjustability — these are all very important. From a change management, risk management standpoint, you have the AI make the decision, and then you’ll have a human review. After you’ve done that process for some months, you can introduce this in a very risk-managed way. Every AI should also state its confidence in its decision. It’s very easy to decide, but you also must be able to state your confidence number and humans must always pay attention to that confidence number.

What is traditional insurance lacking in terms of technology and innovation? How is your technology transforming insurance?

Insurers know their domain better than any insurtech can ever know their domain. In some ways, insurance is the original data science. Insurers are very brilliant people, but they don’t have experience with software engineering and scale computing. The first instinct is to look at open-source tools or buy some tools from vendors to build their own models. That doesn’t work because the methods are so different. It’s kind of like saying, “I’m not going to buy Microsoft Windows, I’m going to write my own Microsoft Windows”, but that’s not their core business. They should use their Microsoft Windows to run Excel to build actuarial models, but you wouldn’t try to write your own programs.

We are good at system programming and scale computing because we’re from a tech background. I wouldn’t be so arrogant to think that we know as much about insurance as any insurance company, but it’s through that marriage of domain expertise in insurance and domain expertise in compute that leaders in the field can leapfrog their competitors.

Are there any current projects you’re currently working on and any trends you see in big data that you’re excited about?

Underwriting and digitization, cat management, and wildfire risk is exciting, and some work that we’re doing in ALM calculations. When regulators are asking you to show that you have enough assets to meet your liabilities for the next 60 years on a nested quarterly basis, that becomes very complex. That’s where our whole mega-services come in — if you can tie all together your underwriting, claims, and capital management, then you can become much better at selection, and you can decide how much risk you want to take in a very dynamic way, as opposed to a very static way.

The other things we’re excited about is asset management. We are doing some interesting work with a very large insurer. What we’ve been able to do is boost returns through various strategies. That’s another area we’re excited about — growing quite rapidly in the next year.

What your goals are for 2021 and beyond?

It’s about helping insurers develop this multi-decade compounding advantage through better selection, and we’re just going to continue to execute. We’ve got a lot of IP and technology developed, and we’ve got pilot customers in various geographies that have used our technology. We’ve got the proof points and the case studies, and now we’re just doubling down on growing our business, whether it’s with the same customers we have or going into more product lines. We are focused on serving those customers and signing on a few more customers in the three areas where we are active, which is Japan, Hong Kong, China, and North America. We are focused on methodically executing on our plan.

Declarations of Pride: David Glawe, NICB President and CEO

By Scott Holeman, Media Relations Director, Triple-I

David Glawe, President and CEO of the National Insurance Crime Bureau, has been fighting crime for nearly 30 years. His extensive background in national security, law enforcement and management provided distinguished credentials to lead NICB’s efforts in combatting insurance fraud and theft. Before taking on this position, Glawe served as Under Secretary of Intelligence for Analysis at the Department of Homeland Security, and was the highest ranking, openly gay official in the U.S. Government.

During our Declarations of Pride series, Glawe shares his personal life journey, which includes progress in LGBTQ+ issues and examples of why there’s ongoing need for meaningful dialogue about equality with friends, family and allies.

Glawe encourages asking questions for meaningful dialogue with LGBTQ+ friends and family.

Glawe says speaking OUT is important for LGBTQ+ people who may be struggling for acceptance.

Declarations of Pride: Michael McRaith, Blackstone Insurance Solutions

By Scott Holeman, Media Relations Director, Triple-I

Michael McRaith is proud of the way insurance companies and Corporate America have helped advance LGBTQ+ rights. In this installment of Declarations of Pride, the Managing Director of Blackstone Insurance Solutions discusses the evolution of LGBTQ+ rights and the importance of diversity in the workplace.

McRaith’s distinguished insurance career includes being the first director of the Federal Insurance Office in the U.S. Treasury, Director of the Illinois Insurance Department, and an officer with the National Association of Insurance Commissioners. Prior to public service, he was a partner in the Chicago office of McGuireWoods LLP. In addition to his role at Blackstone, he also currently serves on the Board of Directors for Gryphon Mutual Insurance Company.

Among honors for public service, McRaith has received the Distinguished LGBTQ Alumnus Award from Indiana University, the Exceptional Service Award from the U.S. Department of the Treasury, and recognition as a Distinguished Fellow by the International Association of Insurance Supervisors.

Declarations of Pride: Ken Ross, John Hancock

By Scott Holeman, Media Relations Director, Triple-I

Triple-I’s Declarations of Pride series celebrates and features prominent LGBTQ+ insurance professionals. Meet Ken Ross, Vice President & Counsel at John Hancock Insurance, who says insurance companies are responding to the unique needs of the LGBTQ+ community.

Ken also says Diversity, Equity and Inclusion have never been more important in the workplace. Ken encourages the LGBTQ+ community to consider the insurance industry for rewarding career opportunities.

Ken has 30+ years of legislative and regulatory experience, specializing in state regulatory and legislative relations. Prior to joining John Hancock, he served as President and COO of the Michigan Credit Union League (MCUL), Assistant General Counsel for Citizens Republic Bancorp Holding Company (CRBHC), and Commissioner of the Michigan Office of Financial & Insurance Regulation.

He has degrees from the University of Michigan-Dearborn and Western Michigan University’s Thomas M. Cooley Law School.