Digitalisation and ever-changing customer demands are disrupting the traditional insurance business. While the European insurance industry in general remains digitally immature compared to other industries, insurers are aware they need to step up and work on a digital strategy to stay competitive. Setting up a digital platform is the first step, enabling insurers to start measuring and identifying customer demands, and then developing new products and services.
In a survey by DXC Technology and IDC on digital transformation in the insurance industry in Northern and Central Europe, the majority of respondents said customers are a key target in their digital strategy. More specifically, for 86 per cent of the respondents, the core element of their digital strategy is enhancing the customer experience, while 84 per cent will focus on implementing digital process automation and optimisation.
To achieve these goals, insurers need people with the right digital skills and, just like every other global company, they are on the quest for strong IT talent. In the survey, 66 per cent said they are looking for people with new competencies to join their organisations, while 23 per cent are planning to start the hunt in the near future. But good IT talent is a scarce resource. A 2017 report by the Danish government predicted that Denmark would be lacking 19,000 IT specialists in 2030 compared to demand.
How does an industry that has been perceived as “old and traditional” for years attract new talent with top digital skills — especially when it is competing with companies like Google and start-ups with more innovative cultures? Attracting the right talent is a serious problem for insurance organisations.
Let’s take a broader look at the situation in the industry. In Denmark, only 20 per cent of millennials have homeowner’s insurance. So, the same people that insurers are trying to attract as new talent might not even be familiar with the insurance product or company. So why would they come to work for you?
First, insurers should educate the young audience and inform them about the value of offered products and services to attract them to the industry. It’s not just about being a good employer, but having the right product and culture to attract new audiences. Prospective employees need to be able to see themselves in the value proposition.
Then there are new types of competitors. Dribe is a fully digital company in Denmark that offers car rentals on a monthly basis. You pay a fixed price including all costs: car taxes, rental cost, change of tires, service and insurance. Dribe’s customers don’t have to think about insurance, so insurance companies are becoming irrelevant to the target audience.
Dribe naturally cooperates with an insurance company, but the user doesn’t worry about that. This brings us to the discussion of whether insurers, going forward, want to provide the best services or focus on customer relations. In this case, the insurer’s strategy is just offering good services.
Young people usually start thinking about insurance for major decisions, such as getting a car. But this interaction might not even start because instead of buying cars, they are leasing or renting them through providers like Dribe. Again, this audience is the new talent insurers want to attract because they are the digital natives with digital skills. But they are “just not that into you”.
How do insurers change that?
- Make your products more relevant to a younger audience. Explore their demands and communication patterns. Implement these into your digital strategy and services.
- Implement cultural and organisational change. Change your leadership style. Millennials expect much more feedback, coaching and guidance through their work than, for example, Generation X.
- Introduce new benefits. The traditional 9-5 cubicle job is not what young people want. Flexible working hours, home offices and greater interaction at work might make you more appealing to younger employees.
There’s a long string of challenges in recruiting digital talent that should be dealt with sooner rather than later. Ask yourself what your digital strategy is and what type of new talent you need to help you reach it. Then start transforming your company step by step to get there.