We know what can happen when a talented employee leaves an organization, particularly one with decades of experience. It’s not just a missing voice around the coffee machine, but a void of institutional and product wisdom that can be extremely difficult and costly to replace
An investment in technology could go a long way toward helping insurer product management and compliance/functional areas protect their intellectual capital.
This void can create a significant risk to an insurers’ intellectual capital—the people and processes it uses to develop and launch products. Without a strategy to mitigate this risk, insurers are not simply thrust into endless cycles of competitive recruiting and talent churn, but could face serious threats to their ability to operate profitably in the marketplace.
The not-so-great resignation
Long before resigning became a fad, insurers were dealing with an acute talent challenge. The U.S. Bureau of Labor Statistics (BLS) reported that the number of insurance professionals aged 55 and older had increased by 74% in the last ten years.1 Over the next 15 years, BLS projects that 50% of the current insurance workforce will retire, leaving more than 400,000 open positions unfilled.2
Replacing these workers may prove difficult as millennials seem reluctant to join the insurance workforce – fewer than 25% of the industry is under 35.3 It may also prove expensive: Replacing an employee is estimated to cost anywhere between 25-200% of the departing employee’s salary.4
For insurers, many aspects of product development, such as forms development and management, are uniquely vulnerable to talent turnover. As a Celent report detailed, “Insurance product management is best characterized as an ‘artisan approach,’ with highly skilled professionals performing their work in a largely manual fashion. The deliverables are of high quality at high cost, with low process consistency, limited auditability, and partial repeatability.”
It often takes years of industry experience and training, in addition to company-specific knowledge, to gain the proficiencies needed for material contribution to
profitable products.5 In such a brittle environment, the departure of one or more key employees can be severely disruptive.
How technology can help fill in the talent gaps
An investment in technology could go a long way toward helping insurer product management and compliance/functional areas protect their intellectual capital. Part of this benefit may be realized in employee job satisfaction: Streamlined and platform-driven workflows usually have more scalability and sustainability than legacy, manual processes. Rather than concentrating expertise and processes in individuals who may leave, insurers can embrace software workflows that provide visibility into product development and management.
The following factors might be considered when looking at technology investment in this area:
- Forms management applications: Evaluate and deploy software tools that are designed for forms development and management; consider centralized, searchable repositories that can be customized based on insurer needs.
- Audit tracking, version control, user roles: Software tools with these features can help with compliance, measurement, and role accountability.
- Data and analytic capability: Gain quantifiable insights for project tracking and metric comparison; analyze and compare policy forms and endorsements quickly; quickly understand and report on wording and clause exposures in light of claims experience and producer feedback.
- API (Application Programming Interface) functionality: Help maximize the potential for integrations with other software solutions and platforms, including data fields and communication tools, to enable overall faster engagement with downstream workflows.