To compete with top IT talent, the insurance industry will need to evolve.
Jay Rabinowitz, vice president of financial services and insurance at Workday, predicts IT and data scientists at insurance companies will be recruited by tech companies unless the insurance industry leaves behind. legacy systems. Rabinowitz recently dug into that prediction — and predicted other industry trends — in an email interview with Insurance Journal.
Q: Let’s talk about your prediction. How did you conclude that to compete with top talent, the insurance industry will need to ditch its legacy systems and move to the cloud?
Rabinowitz: Today’s top technical talent is unwilling to work with outdated systems and platforms, making it difficult for insurers to attract and retain the experts and innovators needed to survive and thrive in the era of digital transformation. We all know that many insurance companies continue to have outdated legacy technology platforms based on COBOL coding or multiple siled databases. Young professionals don’t want to deal with legacy infrastructure. They want opportunities to be part of something new and innovative, like cloud-based technology, improved data tools, new programming languages, and artificial intelligence.
Modernization addresses the talent shortage in two main ways: first, by creating an environment that provides a better user experience and is more attractive to top talent. Second, by giving talent the opportunity to work with cutting-edge technology so they can learn and keep their skills up to date.
We see and hear from clients, especially CIOs, that technology is becoming a key differentiator for recruiting and retaining talent.
Q: Can you point to any numbers or research that backs up your claim?
Rabinowitz: In today’s talent market, where skilled workers are scarce, more than ever, employee experience will be paramount to building – and retaining – a skilled and agile team that seeks to do more meaningful work. According to a study by the Society for Human Resource Management (SHRM), 64% of survey participants said their expectations of what they want in a job had changed since the pandemic. For many, the pandemic has reset the expectations people have of their jobs, and because they spend most of their time doing their jobs, they are looking for value and purpose at work.
In addition to IT talents, financial talents also focus on technology. Workday released research earlier this year that found that a company’s technology strategy is critical to human resource strategy. Nearly half of CFOs surveyed (48%) plan to invest in consumer-like interfaces for finance tasks to attract future finance talent over the next five years. Of the CFOs who prioritize this, 99% agree that technology updates will become even more important in attracting and retaining employees. When daily tasks are automated and workflows are streamlined to optimize productivity, employees can focus on more strategic tasks and bring greater value to the business.
Q: Why is this potential loss of talent concerning?
Rabinowitz: Insurance companies must be able to attract the next generation of IT talent to ensure their long-term success, as they face two obstacles: their existing IT and data science workforce is recruited in other sectors during this hot labor market, and they tend to have an aging workforce close to retirement.
Candidates with insurance technology experience are at a premium. Technologists and data scientists who understand both the technical aspects of a carrier or brokerage environment and the nuances of insurance are rare. Without the ability to attract and retain current and next-generation talent, an organization risks not being able to effectively leverage its current technology and would – most likely – struggle with any sort of digital transformation. The company also risks losing growth opportunities if it does not have the talent to develop a new product line or conduct an acquisition. Additionally, companies could see their employees turn to competitors or InsureTech companies that can offer more meaningful work experiences.
Q: What hurdles do insurance companies face moving to the cloud?
Rabinowitz: Cloud transformations can be complex for any organization, but they’re especially challenging for insurance companies that have invested in multiple solutions to meet diverse business needs. The diversity and complexity of these often siled solutions will require time and patience to integrate and optimize the right technology infrastructure.
Insurers can reduce risk and achieve better business value through an open, interoperable industry ecosystem that connects purpose-built solutions and addresses industry-specific use cases.
But it is important to remember that perfection is the enemy of good. To drive cloud transformation, insurance companies need to focus on small steps, analyze what works, and gain insight from their customers through their customer support representatives and agents.
Especially in today’s environment, investment dollars are valuable. Digital transformation is a journey that insurance companies must take, but they must also continue to evolve their product offering and customer service. They must balance their investment in transformation with the need for new innovations, products and partnerships.
On other predictions:
Q: Looking back, what insurance-related trend predictions do you have for 2023?
Rabinowitz: Insurance companies that embrace data analytics will have a competitive advantage as they can more accurately offer customers what they need. These organizations will be able to more quickly analyze internal and external data to make business-critical decisions, such as rate changes. Additionally, organizations can make better recommendations to their customers by using data to better understand their customers’ needs to provide more personalized offers. For example, customers can have their home insurance policy here, their auto insurance there, and their life insurance there. But could an insurer use the insights gained from the data to offer this customer an offer likely to meet all their needs? I believe data analytics is the future of the insurance industry.
Q: What will we be talking about this time next year that we are not talking about now?
Rabinowitz: Insurers have a dirty little secret: the insurance industry is among the top data-generating industries and spends billions on big data and analytics solutions. But the truth is that companies are struggling to leverage their data, leaving a hugely valuable organizational asset largely untapped.
However, we are beginning to see that leaving this precious resource untapped is cause for concern. With increasing weather-related losses, inflation and an unpredictable labor market, consumer behavior has never been more unpredictable than it is today. Insurers and many other financial institutions will soon realize that they need to start using and analyzing their existing data to help build predictive models for the future, all powered by artificial intelligence and machine learning. Insurance companies have the data to perform this type of modeling, but too often their technology lacks the ability to analyze the data and as a result, they underutilize the data they have.
Insurers will need to bring together operational data from other systems such as policies, claims and reinsurance to really create a complete picture with broader context. This information helps insurers develop products and offer services that benefit customers, as well as help the business navigate the future. Access to data and the ability to easily leverage these data sources will allow insurance companies to be proactively prepared for the unexpected rather than reactive.
Continued uncertainty will continue to have an unprecedented impact on consumer behavior and therefore insurers will need to quickly adjust their business in response to sudden and unprecedented changes in consumer behavior and then anticipate the long-term implications of these behavioral changes.
Q: What should people in the health insurance industry be very aware of as the timeline changes?
Rabinowitz: The rate of change in the P/C industry will only continue to change. In the face of economic and environmental uncertainty and a rapidly changing macro environment, there is no better time to prioritize agility and reinvention. Insurance leaders will have to lead the business through challenges, outsmart the competition and come out stronger on the other side. There’s no better time than now to streamline and simplify data access and decision making.
CNA, one of the largest P&C insurance companies in the United States, used an ERP system that was – in effect – made up of five different financial systems. They switched to Workday to empower their finance function with timely and reliable data, empower their team through self-service and automation, and provide more agile and accurate forecasting and planning to help drive the business forward. . This transformation has resulted in real business results and a real impact on their bottom line, including annual savings of 30% on its financial system and a 27% improvement in IT efficiency.
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