Baby boomers are retiring at a dizzying pace - approximately one every 10 minutes-and since this group makes up a large part of the insurance workforce, many recent discussions and articles have tried to tackle the "graying of the insurance industry." With this in mind, it seems there may very well be a changing of the guard looming for insurance. A new breed of employee is coming of age with fresh ideas about the world of work, a background in social networking as collaboration, and an innate understanding of how technology can reshape processes and make lives easier. This new generation, Generation Y, is poised to change the face of insurance in the next few years. How will insurance companies respond?
A SERIOUS PROBLEM
Deloitte recently estimated the insurance industry needs to hire and develop 25,000 new underwriters alone between 2004 and 2014. Today, only 12% of those with a CPCU designation are under 40 years of age, and the total number of CPCU exams taken has been steadily decreasing for the last decade or so. Clearly, there is cause for concern when you consider the dwindling insurance workforce.
The insurance industry's knowledge base also is ready to retire, and there is no clear replacement waiting in the wings to take over. This realization by several "less-than-sexy" industries, including insurance, healthcare and manufacturing, ensures competition for next-generation knowledge workers is growing fiercer by the minute. So, it appears the real question here is, "What can insurance companies do to present a more enticing environment for this new generation of workers?"
Without said sex appeal, it's difficult to get people who still think they are immortal to appreciate the history and value inherent in the insurance industry. Most members of Generation Y think about working in the insurance industry like Ben Stiller's character, Reuben Feffer, in "Along Came Polly," uptight and boring. So, how do insurers dispel this myth and make insurance exciting to attract new blood to replenish the underwriter ranks? The industry needs a new image-nothing less than a full makeover-and using technology to bring our processes into the 21st century is the best place to start.
The new generation of potential insurance knowledge workers are tech-savvy. Their classrooms have been filled with digital technologies, and their lives are filled with Facebook, Myspace, cell phones and text messaging. Generation Y comes equipped with a new view of business and what is expected in a work environment. That means it definitely doesn't help when insurance company offices come pre-populated with archaic green screens, personal "in" and "out" bins, rows of metal file cabinets, fax machines and outdated manual assembly-line processes.
Let's face it, some Generation Y workers have never even seen a fax machine.
Generation Y gravitates to industries doing things faster, smarter, and easier - with real-time collaboration, once-and-done tasks and Web 2.0-based processes. If the insurance industry wants to attract top talent, it's time to leave behind legacy operations and get with "the new century."
STRATEGY FOR THE FUTURE
Insurers need to be planning now for the future - there is no time to wait. Underwriting is one of the most important functions an insurance company handles each day. It's the heart and soul of insurance, and yet so much of what is done in the underwriting process is still patterned after the way we did it with microfiche, electric typewriters and 1970s vintage systems. And the critical analytical, pricing and decision-making processes are still locked in the brains of your underwriters.
Companies intending to thrive in the future need to plan for transformation. To bring in and keep the bright new Generation Y talent, insurance companies need to offer a bright new image and a new level of personal productivity. Processes need to take advantage of new technology rather than suppress it. Knowledge needs to be accessible and actionable to the underwriter.
Automation needs to perform the mundane and clerical setup tasks, and assist the underwriter in the professional tasks. Rules need to guide and enforce best practices so the junior underwriters can be effective more quickly within in their authority, and alerted when they need approval. And, it all needs to be intuitive, easy-to-use and learn, highly efficient and intelligent.
Companies developing the most up-to-date systems with connectivity to all other relevant applications and providing interactive communication and collaborative applications such as chat/IM, e-mail and screen sharing will attract new talent and the next generation of talented insurance professionals and underwriters. It's a positive change - permanent raising of the bar. The new operating standard in the business world depends on technology.
Meira Primes is SVP for FirstBest Systems in Bedford, Mass.
(c) 2008 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.
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