A 2023 report detailing the concerns and challenges facing insurance and annuity company leaders reveals technology is still the number one concern among insurers. This report was published by LIMRA and Boston Consulting Group. Here’s some revealing facts they found:
-Only 27% of leaders feel their companies technologies are positioned for long term success.
They view digital automation, data science and analytics, and customer service technologies as keys to growth.
-More than 50% of respondents said the consolidation of distribution poses an expanding threat to insurers. More than 50 M&A deals were completed by the big three aggregators in just 2022.
-Respondents ranked promoting employee engagement as the key to retaining employees. But, 25% of insurers workforce remains older than age 55. And among potential entry level employees, the insurance industry ranked next to last on a scale of 1 to 10 of desirable places to work.
While many see challenges, these may well be opportunities. Technology is the biggest concern, and distribution is evolving rapidly. Using the approaches of the past may not be the best way. The industry is aging and needs renewal. Leaders are still speaking of legacy systems holding them back and lacking in resources to make changes.
Nilofer Merchant wrote in the Harvard Business Review in 2011, that culture trumps strategy every time. To attract younger employees, carriers must empower them to make changes. A static industry will not attract top talent. Rather a younger dynamic workforce will bring new ideas and approaches unencumbered by the ways of the past.
The consolidation of distribution will force carriers to meet their technology demands or be left behind. With the “ball and chain” of the past dragging down change and dynamism, companies may survive for a time, but not long term.
A study I completed recently, revealed that carriers leading in technology implementation, digital automation, data science and analytics, and customer on-boarding and servicing technologies, weren’t necessarily the biggest, rather they are the culture leaders.
I’m happy to discuss further, drop me an email.