More than 150 property/casualty insurers and nearly 50 life/health insurers have made core systems investments in the last two years, according to research and advisory firm Celent. As an increasing number of insurers undertake technology transformations, more are finding the competition for IT talent to be fierce, where insurers are not only competing with peers, but companies from other industries that are sometimes viewed as more exciting than insurance.
According to a recent Accenture survey, 43 percent of the 559 North American commercial lines, specialty lines and reinsurance underwriters that responded say recruiting or retaining talent is one of their top three challenges.
"Cincinnati is rich with insurers, but also other Fortune 500 companies that are looking for that talent, so it is hard to find, especially developers, etc.," says Jane Bracken, SVP IT operations with Great American Insurance Company. "There are many industries some people might think are more customer-facing, and people want to be there."
This introduces additional challenges to insurers' implementation of new technologies that require skills such as Java, .NET, analytics and visualization, both now and in the future. As a result, insurers need to have short- and long-term strategies for maintaining a healthy IT department well stocked with the appropriate skill sets.
"Many of insurers' folks grew up building mainframe systems, and aligning those skills with [insurers'] needs is difficult to do," says David Packer, founder and senior principal of X by 2, a management and consulting firm. "Many insurers are very committed to their existing employees, and they certainly have some percentage of their employees ready to make that jump and productively contribute to these modern, strategic projects. But it's not like you're able to convert everybody."
Indeed, while some are trying to retrain established IT workers to solve short-term skills gaps and adjust as a new technology replaces dated mainframe and legacy systems, some insurers are looking to external consultants to provide the appropriate talent - and some are trying both.
"They have the projects partially staffed with this outside expertise and have it partially staffed with their own people. The hope is that not only will the project deliver the desired results, but also some additional skills will be added for their existing employees," Packer adds.
Great American, however, has been in the thick of the hunt for IT talent for several years now and has found the market for recruiting increasingly competitive. The company focuses heavily on internal insurance professionals when it comes to perhaps the most important title for successful project delivery: the project manager.
Bracken says, for this position in particular, the reliance on internal staff comes from the belief that project managers "have to be able to talk the talk and know the culture." Filling this position has added pressure for any IT unit, let alone one struggling to infuse new talent into the organization, but for the last four-plus years, Great American has found ways to develop and acquire skills that they hope will continue to pay off down the road.
"We have been updating core legacy systems, so we're in the same spot as many insurers are," says Bracken. "In the beginning, we retooled many of our COBOL developers with pretty good success, but obviously we needed more. We've decided to invest more heavily in our intern and co-op program with some of the local colleges. The reason we have returning co-ops and interns for several years is because we get them excited about insurance, the company and the technology from the day we bring them on in hopes they will become full-time employees upon graduation."
Partnering with schools to create a pipeline for new talent is something that comes up frequently when discussing recruiting within the industry.
Some schools, including University of Cincinnati, are even starting data/analytics or data visualization programs, which is a development that Bracken says has been very helpful in highlighting talent for Great American. Even with this strategy, however, recruits are highly sought after, and insurers are finding themselves spending more time and money to bring them in.
This is where social media enters the conversation, according to Steve MacGill, a senior manager who leads the organization change management practice in insurance at Capgemini. "Not only does it work for recruits, because it's where they live and they know how to navigate it, but it also reinforces the brand of the IT group seeking them. They're not using old methods, they're using new methods," MacGill says.
Social media can be very important for reeling in recruits, as they're able to discuss the position and company with peers in a comfortable setting; yet it's a well-defined, savvy IT strategy that provides the edge once recruits are interested, according to MacGill.
"The IT department or group has to have a well-defined strategy to secure a lot of the top talent, MacGill says. "They want to know where this thing is going, what the opportunities are going to look like for them. They want to know what the strategy of the group is so they can position themselves. To some extent, the brand can't just be logos and taglines, there needs to be a talent strategy there so when you talk to people you get a unified voice."
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