Technology is a force to be reckoned with. Already, it has sent shockwaves through the retail, financial services and healthcare industries – demanding immediate, radical transformation. Those that failed to adapt, crumbled. Now all signs point to the insurance sector as the next industry to be hit by disruption. Comparison websites, the rise of Insurtechs and scope creep from global tech companies like Amazon – as well as customer expectations – are necessitating change in the industry. But is insurance ready for digital transformation? And what role might contingent talent play in getting it there?
The role of digital in the insurance market’s future
For insurance businesses that can master technology, the future is one of infinite possibilities. By embracing tech, insurance providers can move away from annual insurance policies to personalised, high-touch service offerings.
For example, by using data and analytics to monitor customer habits and preferences, IoT to improve proactivity (e.g. monitoring water use to identify leaks before they do damage and give rise to a claim) and AI and machine learning to detect fraud and manage claims, insurance businesses can offer more intuitive and value-add services, and grow their slice of the pie.
A 2020 Deloitte survey into the future of technology in the insurance industry shows how tech will be adopted. Of the 200 EMEA executives surveyed, the tech they are prioritising includes cloud (48%), data and analytics (31% - and 41% or life insurers and annuity providers) and Internet of Things (34%). Cybersecurity was another area that may see significant investment, with over half (51%) of respondents raising compliance to cybersecurity and data protection laws as a concern.
All of this suggests that technology adoption is going to be pivotal to the insurance industry over the next few years. But it’s not without its challenges.
What stands in the way for insurance adopting tech?
Even though 80% of insurance executives believe that the industry is moving fast enough to keep up with technological advancement, figures suggest otherwise. Just 28% of employees in UK insurance companies have digital and analytics capabilities, and only 12% of employees are in tech-specific roles like software engineer, data scientist or product manager (with most in ‘data and analytics’ roles). By comparison, 56% of employees at global technology giants have digital and analytics skills – including 30% in digital and analytics roles.
With a recent study finding a positive correlation between business performance in the insurance sector and the proportion of digital talent a company has, insurance providers will need to grow their tech talent base to warn off competitors.
But this is compounded by an incredibly fierce market for tech skills – tech hiring hit a five-year high in May 2021. Insurance providers are not just going toe-to-toe with each other and with market disrupters for tech talent, but against attractive sectors like financial services and banking.
And this could be a problem for the insurance sector, which is already grappling with talent attraction and an aging workforce. The insurance sector also faces some challenging (and outdated) stereotypes which can make talent attraction harder. As more insurance businesses gravitate towards a digital-first proposition, these stereotypes are shifting – the UK is after all a global centre of expertise in insurance, with an exciting technological transformation prospect – but for others this is still the long game. The insurance industry has come a long way, and many businesses today can’t be tarred with same brush, but getting that message to market will be key for talent attraction long-term.
The insurance industry has all the ingredients to become a magnet for top talent – but only if it moves quickly enough to stamp out competitors.
The value of contingent talent to the insurance industry
Now is the time for the insurance industry to get creative with its workforce model. The demand for digital is only going to pick up pace, and businesses cannot rely on permanent talent alone.
Which is why contingent talent holds the key to insurance’s future. Contingent talent offers a wealth of expertise that can be easily scaled up to plug skills gaps for the short-term. This will afford the time for businesses to reskill existing employees, launch talent programmes and rationalise services, while getting the ball rolling on vital digital programmes.
Contingent talent is also an excellent resource for businesses stepping into digital transformation as it can act as the translation layer between legacy systems and new ways of working. Contractors typically offer high levels of expertise, but they can also offer cross-sector knowledge due to the variety of projects they work on. This could be invaluable for companies looking to scale their tech, as they can apply lessons learnt from both an insurance background and from other industries that have undergone digital transformation.
Lastly, contingent talent is scalable, which means it can be flexed up for specific digital programmes or redeployed as priorities change. This gives businesses in the middle of change a degree of flexibility without investing in headcount – a plus point when the climate is so uncertain.
For insurance businesses looking to rejuvenate their reputation and hire digital talent, using contractors to begin transforming the business from within will therefore be of paramount importance.
How to begin the digital journey with your contingent workforce
For businesses ready to begin their digital transformation journey with contingent talent, it’s important to recognise the selling points of your sector. The insurance industry is an exciting opportunity for contractors to sink their teeth into a project that requires digital transformation from top to bottom. It’s an industry with a strong backbone but that’s changing rapidly, so will suit people with the confidence, flexibility and appetite to adapt quickly. Speaking to this audience in the right way will help the insurance sector undercut glossier and more established rivals.
It will also be worth taking the time to map out an optimum workforce mix. By identifying skill needs, projects and timeframes, companies can work out the best use of talent. It can also help with picking up skill shifts to pipeline for future need or retrain existing employees – with contingent talent stepping in to pick up the shortfall in the short to medium term.
An MSP (managed service provider) can help with all of these steps – from identifying pockets of talent to bringing the message to a market in a way that resonates with the target audience to identifying and qualifying the right people to support a digital transformation journey. Lorien – as an MSP within tech – has already supported many clients in the financial services and insurance sector to boost their access to contract and permanent tech talent and drive tech transformation. Find out more here.
The bottom line is that the insurance sector needs to pivot to tech – just as all industries will eventually have to. And while many insurance businesses are already on this journey, and on it with enthusiasm, technology transformation isn’t an overnight job. It will require restructuring existing processes and reimagining the sector, both internally and externally. It will require shifting brand employer value proposition (EVP) and finding USPs to face down talent competitors. And it will require shifting to a continuous, customer-centric and tech-driven mind set. But first come the people, and fast.