Commercial lines insurers are dealing with many of the same hurdles their counterparts in other lines of business are facing. But three areas of focus emerged at our recent Special Interest Group focused on commercial lines: core systems modernization, how to attract—and keep—talented employees to the team, and how to effectively partner with insuretech startups.
The best approach to core systems modernization partly depends on what the biggest driver for that modernization is. Although speed to market and better agent experience are often at play, “fear of being unable to support the legacy system” topped the list for participants. Their next question was, given the sense of urgency that fear can inspire, how can insurers best contain implementation costs and avoid slipping time horizons and undue strain on the business?
All industries are facing talent issues, but with working from home becoming normalized for many insurers, participants discussed how else to make their organization an attractive option for current and future employees.
In addition, it is becoming more common to partner with insuretech startups that offer innovative technologies to improve ease of doing business and provide operational efficiencies.
Approaches to Core Implementations
The saying “You can’t eat an elephant in one bite” is very applicable to core systems implementations. One approach to making core systems modernization more manageable is doing it in pieces. Two insurers at our recent meeting took that approach by starting with claims, noting that billing and policy are best done together due to their tight linkages. Other insurers take it a few lines of business at a time.
Others are maintaining and hardening their legacy systems and surrounding them with modern digital add-ons to buy time until they are ready to begin a transformation effort. These insurers are often waiting for the vendor market to mature a bit and to hear more about the success stories that align with their type of company, rather than the struggles.
Over time, we have observed that there is not necessarily one best approach. The right approach for any insurer considers their specific business goals and pain points, existing technology environment, ability to enable change, and available budget.
Acquiring, Training, and Retaining Talent
Hiring, training, and retaining talent is a challenge across industries, not just in insurance or commercial lines. Many insurers have continued to offer remote or hybrid work options. While this may still be for practical reasons in some cases, it’s also good for talent retention and acquisition—flexibility around work location remains very high up on employee wish lists.
The downside of remote work, as many insurers have discovered, is that it can be harder to manage employees’ work-life balance and identify burnout. Managers must check in with employees more formally than if they were all in an office together. Some insurers have even begun conducting “stay interviews”: frank conversations between employees and managers on happiness with and fit for the current role, company and manager performance, and short-to-medium-term professional goals. If the employee is looking for a new or different opportunity, insurers should realize that “up” isn’t the only career development path and enable and encourage lateral moves within the company.
Even insurers who retain employees well are working to acquire new talent. Insurers have a lot to offer outside of the typical roles—from advanced analytics to cyber insurance and lots of innovation funding, insurance is more exciting than some people might think. There are plenty of things to attract both young and seasoned professionals. Messaging this to prospective employees is key.
On the topic of innovation, commercial lines insurers are partnering with insuretech startups to accelerate underwriting, claims handling, and risk mitigation; ease submission intake; and automate testing. Insurers we spoke with were particularly interested in aerial imaging technologies for examining roof conditions and surrounding debris.
Such technologies can go beyond the typical insurance use cases in underwriting and claims and extend into risk mitigation by generating automated letters to insureds based on their roof condition. Insuretech startups are also offering solutions for other common manual tasks, such as intelligent text ingestion for new business submissions and RPA and other forms of automation for test automation.
Commercial lines insurance is an exciting space these days, with many insurers focused on growing this market segment significantly. The availability of configurable modern core systems as well as insuretech offerings that provide robust data, analytics, and AI-enabled capabilities are presenting opportunities for insurers of all sizes to increase efficiencies, improve outcomes, and optimize agent ease of doing business.