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Transformational Thinking in Insurance Human Resources Management

Sam Medina
Insurance Experts' Forum, May 29, 2014

There are significant trends that are putting pressure on insurers to undertake major transformation programs. For starters, consumers are more informed than ever. Their buying and service savvy is creating the necessity for insurers to shift from being product-focused to being customer-centric. There is also a growing demand for insurance products and services in emerging countries, and insurers are capitalizing on that demand and competition is now on a global scale. When you add in the need for technology solutions to meet enterprise needs, the result is a high demand for good people.

Because everyone needs talented people with technology, insurance and service expertise, HR departments in insurance companies are fighting a new war for talent. They are seeking leaders, managers and employees who can develop and execute transformation programs, who can assist in creating a customer-focused company culture, who can compete in emerging countries, and who have experience in data and quantitative analysis. On top of all of these talents, they must come with or be trained to possess insurance business expertise.

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The war for talent is exacerbated by the fact that most expertise lies in the hands of the ‘soon-to-retire’ generation of insurance experts. They can certainly train the Gen Y recruits, but in general, the Gen Y workforce isn’t finding that insurance jobs resonate with them as attractive lifelong occupations. How can Insurance HR departments respond? A proper response will require transformational thinking. (For a good definition of transformational thinking vs. legacy thinking, see my first blog.)

The Challenges in the Human Resources Management

Every insurer’s Human Resources organization will need to achieve the following objectives as part of preparing for the ‘realities’ of the insurance industry:

• Attract and retain insurance professionals, especially those who can create new insurance products and services, and those who can take advantage of the newer technologies to market and sell products across new channels.

• Attract people who are skilled in customer service and recruit data and analytics experts, plus technologists who develop applications on mobile devices. Gather talent from behavioral engineering and other sciences required not only to rate and price risk, but to create new ways of capitalizing on social networks and on consumer decision-making.

• Find ways to keep the seasoned but soon-to-retire insurance professionals long enough to attract and train Gen Y talent, transferring valuable insurance expertise and retaining invaluable knowledge assets.

• Hire talent where needed - at the global, regional and local, ‘in-country’ levels.

• Work in partnership with learning and development experts, and technologists who can develop on-line training courses and methods that can reduce learning curves, and lead to faster productivity gains from new talent.

• Acquire professionals who are skilled in change management, stakeholder management, changing corporate cultures, and managing company-wide transformation programs.

• Develop highly competitive rewards, benefits and compensation packages that will be attractive to both the Gen X and the Gen Y workforce.

• Support insurer’s acquisition and divestiture activities, especially in the next three years.

Transformational Thinking

Insurers need to shift towards transformation thinking with respect to Human Resources management.

The initial steps are as follows:

Reject these ideas:

For the most part, current talent acquisition and retention practices, and learning and development programs cannot simply be enhanced to meet the new demands. Transformational changes will be much more far-reaching. It will help to reject the notion that a Human Resources department can unilaterally create its own competitive talent acquisition/retention, and learning and development programs.

Accept these ideas:

Consider that almost all insurers will likely have to tap into other industries to find the necessary skills and competencies, and HR departments will have to partner with other functional areas to recruit, and in some cases poach, new talent. Because an organization’s real appeal is not found in its HR department, HR leaders will need assistance from all the other functional areas in order to champion and mold a customer-centric, innovative and competitive workforce & environment.

Leading the effort in launching a Human Resources transformation program in your company begins by leveraging new technologies and includes the following steps, not necessarily in this order and often overlapping.

STEP 1: Assess and understand the overall human resources cycle in your company, sorted by functional area, from acquisition to exit. Partner with data analysts from IT and actuarial services in utilizing the newer data acquisition tools and apply analytics to HR data.

STEP 2: Leverage technology in conducting skills and competencies assessments. Leverage data from social media, from other industries, and other countries in formulating laser-focused talent acquisition plans.

STEP 3: Connect “talent” by leveraging digital and social networking tools, and creating talent/expertise portals. Participate in creating a company-wide digital strategy.

STEP 4: Create a cross-functional Talent Management, and Learning and Development steering committee that is focused on seizing opportunities to acquire, retain and continuously develop the company’s human resources.

STEP 5: Partner with a third party who can work with all the functional area leaders and leverage the new technologies in creating a target operating model for HR. It should contain a Workforce, Processes, Locations, Information and Systems roadmap that will support the company’s strategic objectives.

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About the Author
Sam Medina is a global business transformation executive at TCS, who specializes in advising insurance and healthcare executives on transformational thinking and leadership.

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