The insurance industry's contributions to the well-being of individuals, businesses, and society have a long history, and there is an enduring, expanding demand for the industry's services. But how the industry makes its contributions is changing.
Mercer recently conducted research that identifies the challenges facing the global insurance industry and examines their workforce implications. We have collected and examined the perspectives of executives, primarily chief human resource officers (CHROs), and other leaders more responsible for ensuring that their companies have the right talent and talent management practices in place to successfully meet the challenges. Our individual interviews were held with executives from 20 industry leaders in North America, Europe, and Asia.
Those interviewed discussed many challenges, some of which are unique to one company or common to just a few. However, the most widely shared, consequential challenges the industry faces now include:
- Technology and big data - Turning the promise of new technology and big data into commercial successes. This includes capitalizing on the opportunities in mobile and web-based services, using big data and predictive analytics effectively, and overcoming the problems associated with legacy technologies.
- Growth - Low growth in mature economies with the potential for high growth in emerging economies.
- Customer focus - The need to create better, more comprehensive customer relationships and make it easier for customers to do business with insurance companies.
- Regulation - Operating under multiple regulatory jurisdictions and complying with changing rules with regard to such things as capital requirements, transparency and reporting, and customer interaction.
- Alternative investments - Managing more complex portfolios with nontraditional assets in a low interest rate, low economic growth environment.
- Leadership - Discomfort regarding the adequacy of talent pipelines for effective leadership in the future.
HR leaders naturally are at the forefront of responsibility for meeting the challenges of leadership development. We believe HR's role in the remaining challenges will be quite critical, because success will so heavily depend on attracting and managing the right human capital. Insurance has always been an industry that relies heavily on expertise and specialized skills in its workforce. And while some advancements will disembody human expertise and embed it in systems (for example, automated underwriting and web-based customer self-service), the shape of the workforce will be critical to driving innovation and adaptation to change.