The insurance industry is undergoing radical, rapid change, from the way people buy a policy or make a claim (e.g., online and via a mobile device,) to the types of products being sold (e.g., highly targeted or bundled solutions,) to the way policies are sold (e.g., point-of-use and on-demand). Adapting to these changes will require traditional carriers to be more innovative than ever.
For many, that’s easier said than done. In a 2018 KPMG benchmark study, 59.2% of respondents said that “company culture or entrenched attitudes” were a major obstacle to scaling innovation. Insurance is an industry rich in tradition and long-established processes, making it especially susceptible to these sorts of challenges.
The Looming Impact of Culture in Claims Management
Claims administration is one segment of the insurance workforce seeing an impact on its culture due to changes in the workforce and implementation of new technologies.
According to the U.S. Bureau of Labor Statistics, an estimated 400,000 U.S.-based insurance employees are expected to retire next year. Many of these workers will come from claims departments, and many insurance carriers are rightly concerned about their ability to replace them. In fact, according to a recent study, 18% of insurers said they planned to increase their use of temp staff this year, up from 12% last year (Jacobson Group and Aon).
Culture can have a significant impact on a carrier’s ability to attract and retain the right full-time talent. More than 77% of adults in the United States, the UK, France, and Germany told researchers they would consider a company’s culture before applying. More than half said culture was more important than salary when it comes to job satisfaction (Glassdoor).
But the struggle to maintain a strong culture needn’t be an obstacle to claims operations’ success. Company culture can help foster insurtech adoption, and in turn, insurtech can be used to create a more positive workplace culture.
The Six Components of Company Culture
To better understand the impact of company culture on disability and life insurance claims operations in the United States and Canada, SALT Associates and RGA Group Research conducted a study to analyze disability and life claims professionals’ sentiments using a system similar to Net Promoter Scores.
We started with a common definition of culture:
Culture - attributes that make your business unique, attract talent, drive engagement, and impact retention for employees and clients.
Then, based on our survey results as well as analysis of additional culture research, we developed six categories that make up workplace culture:
Work environment – This is the physical space your employees occupy. For example, does the layout of their work area foster collaboration yet maintain the ability to stay productive? Is the design modern? Is the furniture ergonomically sound? Or is your space designed to save money with little thought given to the workers who’ll inhabit it?
Communication – Does everyone understand the big picture, or are they expected just to do their job and operate on a “need to know” basis? This category also includes the effectiveness of how information is communicated, e.g., in person, via a company newsletter, through email, or through a hard-to-navigate intranet site that nobody uses.
Diversity – When managers are in charge of hiring, it’s common to see workgroups made up of people who closely resemble the managers to whom they report. However, a diversity of work experiences, perspectives, and thoughts can make for a more effective group.
Recognition – Do you recognize your employees for their accomplishments? We all want a pat on the back, but studies show that this is even more important for younger workers.
Employee development – Is there a clear career path for employees who want to advance? Do you offer formal training beyond initial onboarding? Will this training help them increase their overall value, or is it solely geared toward their current role?
A sense of purpose – People who see themselves on a mission are better at their job than those who are just putting in the time. Does the organization foster a sense of purpose?
Promoting a Positive Culture Through Innovation
While culture isn’t immediately what comes to mind when people think about implementing new technologies, the findings from the research create an interesting link.
Positive and negative influences on culture
When we asked about positive and negative influences on culture within claims operations, here’s what respondents told us:
Most Positive Influences on Culture
Most Negative Influences on Culture
Promoting positive culture based on influences
We can leverage this data to create several ways to promote a positive culture when implementing insurtech.
#1 Let everyone in on the plan. Communication is the #1 positive influence on culture. Helping employees understand why insurtech is being implemented, the goals of the project, and the roll-out process will help promote buy-in to new ways of doing things.
#2 Don’t rush it. Change management is the #1 negative influence on culture. Implementing insurtech can dramatically upend long-held processes and perceptions about the right way to do things. You need to go at a pace that gives people time to adjust.
#3 Show them how. Training/development is the #3 positive influence and the #5 negative influence on culture. People are tech-savvy to varying degrees, so you may need to offer different levels of training to bring people up to speed. To encourage adoption, a key part of your training should demonstrate how technology has the potential to create new career paths and make people more valuable in their current roles.
You can’t underestimate the impact of training on culture, especially when implementing AI-related technologies. A 2019 study found that 73% of U.S. workers think AI will eliminate more jobs than it will create. Yet only 18% are "extremely confident" they could secure the training they need for digitalization (Gallup/Northeastern University).
#4 Use technology to attract the right talent. As seasoned claims professionals retire or move into new roles, they’ll need to be replaced with younger workers. Gen Z, Millennials, and even many in Gen X expect to work with technology. For some, it can be a deciding factor when evaluating potential employers.
#5 Make sure the insurtech fits the business. Inefficiencies/inconsistencies and workloads tied for second place on our list of negative influences on culture. Insurtech needs to support the defined business processes and help employees be more productive. If they see using technology as an extra step in the process, they’re likely to revert to manual ways of doing things.
Learn More About the Impact of Culture on Claims Management
If you’d like to learn more about the impact of culture on claims operations, you can request a copy of the summary report here. You can also visit us on the web to learn more about how SALT Associates is helping carriers improve risk outcomes with customized claims solutions.
- Gallup/Northeastern University: Optimism and Anxiety: Views on the Impact of Artificial Intelligence and Higher Education's Response
- Jacobson and Aon: 2019 Q3 U.S. Insurance Labor Outlook Study Results