In a recent blog post, we discussed the need to move away from a commoditized approach to one that is more consultative. Now, I want to dive into five flaws of the commoditized approach that makes this so important.

Free?! There’s no “free” in advising!

The first flaw of a commoditized approach is the tendency of brokers to promote their services as being free. I am convinced "we're free" are the two most damaging words in a broker's vocabulary, yet we see and hear them all the time.

I always get a sense when somebody promotes themselves as being free that they think they're communicating they have great value, but the reality is the opposite. Your clients are intelligent businesspeople, and they understand you must be paid. To pretend to be free is insulting to them, and it's cowardly on your part. It's a clear indication you don't believe in your value proposition.

Stop and think about it. Your clients, your best clients especially, don't expect you to bring them free services. What they expect is you to bring them great results. Stop pretending to be free and start emphasizing your ability to deliver those great results.

Myopic vision

The second flaw of a commoditized approach is focusing on a single solution. If you live by a single solution, you're going to die by a single solution. I don't care what it is. I don't care if it's a technology solution or an insurance solution.

If I come to you and tell you that I sell an insurance solution, what will you consider buying from me? You might consider buying an insurance solution. And if I come to you and tell you I sell a technology solution, you might consider buying a technology solution.

But if I come to you and tell you that my job is to create efficiencies, deliver a better ROI and help you be more successful around your complete HR and benefits program, what will you consider buying? Anything that contributes to that outcome.

A single-solution approach can only work until one of three inevitabilities happen: A better solution comes along, somebody offers the same solution at a lower price or the ability to distribute that solution is taken away. Those going down the commoditized path are vulnerable in at least two of those three scenarios.

Is it a relationship business or not?

The next flaw has to do with how you view the relationship with your clients. There are a lot of technology-focused brokers out there. They tend to exist at the opposite end of the spectrum from traditional brokers.

Technology brokers seem to be convinced that the relationship isn’t important any more. At the same time, too many traditional brokers are still convinced that the relationship is all that matters.

How often do you hear, "This is a relationship business"? It's not that the relationship doesn't matter. It does. But we have to recognize that it's more difficult to run a business than ever before. And your clients are being forced to make business decisions first.

Yes, the relationship matters, but it can no longer simply be a social relationship built on the golf course or over cocktails. It must be the kind of relationship that can only develop from you having given your clients the right advice, having earned their trust and having proven yourself able to consistently deliver improved results.

Price vs. cost

The fourth flaw of a commoditized approach is that it focuses on the price of a product rather than the bigger cost issues that affect your clients' business. You would think Excel had been invented by a benefits broker. Too many brokers still live and die based on that damned spreadsheet.

When you focus solely on the price of a product (think, insurance policies), it's lazy and shortsighted. Nothing leaves you more vulnerable. Stop and think about it—how easy is it to go out and find the price of anything online?

When you choose to engage about the price of somebody else's product, you miss the opportunity and, I believe, the responsibility to address the bigger cost issues of your client's business.

See also: You Gotta Know Your Sales Numbers

“Let us provide a free quote”

The final flaw of the commoditized approach that we will mention is this insistence on providing free quotes.

As we consider agencies for admission into the Q4iNetwork, we review their websites. It is so frustrating how often the most prominent message on those websites, right there front and center on the homepage, is that “Click here for a free quote” button. I know that agencies that use this button are well-intentioned. They're putting it there as an enticement to the prospect who found their way to the website.

But think about why that prospect is visiting the website.

They're there because they have some problem and are looking for help. They're looking to figure out if that particular agency is different than the one they already have. I promise you they already have somebody who can provide quotes.

Somebody visiting your website is an opportunity to separate yourself from the rest of your competition. It makes no sense why so many insist on being evaluated on the one thing that makes them just like everybody else.

There is almost always a twist to this offer. Most of those “get a free quote” agencies also have messaging about how they will be your “trusted adviser.” These are conflicting messages. I don't think anybody finds a trusted adviser on the backside of a get-a-free-quote button.

Look in the mirror

If you're losing business to the competition, quit focusing on their business and focus on yours. As Henry Ford observed, "The competitor to be feared is one who never bothers about you at all, but who goes on making his own business better all the time."

It’s time we're honest with ourselves about what it is going to take for you to become that stronger business. A commoditized approach is always going to lead to mediocre value. And, while the financial reward for mediocrity in our industry has been excessively high in the past, feared competitors know those days are over.

Feared competitors also know that they have to focus on regular daily improvement to their business. And, not only do feared competitors understand the need to focus on daily improvement; they are extremely clear about the areas of their business on which they're going to have to focus that improvement.

Where does improvement start for you?

The retirement crisis has begun to spiral in recent years. With the pandemic, spikes in inflation, potential Social Security cuts and higher interest rates, more and more people are anxious about having enough to retire. When you consider the rising cost of healthcare and the fact that people are living longer, working well into retirement age is a potential reality for many.

As a result, many aging Americans are looking for ways to expand their savings and understand their assets. But what many don't realize is that the answer might be in their life insurance policy.

Every year, around $200 billion of life insurance will lapse or be surrendered, even though it could have been sold on the secondary market via a life settlement. It's hard to imagine that so many would leave billions on the table, but there's a good reason. Most people simply don't know life settlements are even an option. Even if they do, a lack of transparency and information makes the process so long and complex that it leads to underutilization.

Lack of Transparency Slows the Life Settlement Valuation Process 

In the traditional life settlements process, it can take months for an adviser to understand the value of a client’s life insurance policy on the secondary market, making it difficult to provide quality financial guidance.

A primary cause for this delay is a lack of access to a critical piece of information, Cost of Insurance (COI). Several variables are used to calculate the COI for a life insurance policy, such as when the insured purchased the policy, how old they were when they bought it, their health at the time, the comprehensiveness of the policy and the policy type. All of these factors affect how much it will cost to keep the policy in force over time and are essential for understanding its resale value.

But why is it so difficult to get this information? Historically, COI data is fiercely protected by life insurance companies. As a result, advisers and their clients must meander through a long and complex underwriting and selling process before they can fully understand the pros and cons of selling, keeping or surrendering a policy. 

However, AI-powered technology has the potential to open the flood gates to this data and speed up the life settlement valuation process exponentially.

See also: Time to Embrace AI in Climate Change Fight

How AI Helps Advisers See the Full Picture 

The human brain can process only four to seven variables on average at one time, but AI-powered technology can process millions of data points simultaneously. As a result, AI processing has the ability to instantly look across millions of data points to predict a COI curve and provide a data-driven life settlement valuation. 

For instance, via My Policy Predictor, Harbor Life has created an algorithm that analyzes more than 16,000 possible COI curves and matches the policyholder with the curve that best represents them. This machine learning-based calculator expedites life settlement valuations that once took advisers months to receive, making the process more accessible to all key stakeholders. Now, advisers can input a few basic questions about the insured to instantly pull a quote, with 89% accuracy, for a client's policy, and guide them on whether they should keep, sell or surrender their life insurance. 

This type of technological advancement in the life settlement space means more opportunities for advisers to not only help their clients unlock years of built-up wealth but also examine the potential for reinvestment. Historically, life settlements have been a reactive option if a client is unable to afford their insurance policy. However, technology that makes the life settlement decision process more straightforward makes it easier than ever for advisers to understand the role life insurance can play in growing a client’s wealth.

The Future of Life Settlements

With seniors expected to account for 20% of the population by 2050, giving Americans access to sufficient retirement funding has never been more crucial. In a space that has been criticized for its lack of transparency, it's possible to unlock billions in retirement funding for seniors by streamlining an outdated, gated process. 

Everyone deserves the right to know the value of their assets, and technological advancements, like the My Policy Predictor, give advisers the tools they need to solve this retirement crisis, one client at a time.

Regulatory change is slow in the insurance industry, yet the technology to serve it and other verticals keeps advancing at warp speed. In a recent survey of hundreds of senior technology leaders and business decision-makers across multiple industries, many technological efforts stand out that will propel insurers and similar financial service organizations to reduce operational costs, better engage with its customers and improve efficiencies.

Changing demographics

At the end of 2021, these tech and business leaders sounded off with views on their daily challenges, issues that tech can address and opportunities they see on the horizon. Top among them is the changing American demographics.

Generation X commands more than 20% of today’s U.S. marketplace, and Gen Z is quickly growing. Taken as a single group, these consumers are adept at modern commerce tools and–especially Gen Zers–fully expect businesses to offer a robust technological experience. Today’s youngest adults have spent their entire lives with smartphones.

They are more interested in self-serve interactions, have access to real-time information, earn more  disposable income and are more informed about their financial choices. This group boasts more independent thinkers than past generations because it's been exposed to more worldly views through the power of modern communications. Thus, they feel empowered to guide their financial independence. 

Cloud over conventional

Insurance and financial leaders recognize they must structure their products and services to meet this market segment. Leaders wish to spend more time crafting and launching these services than thinking about how they will do it. Ergo, cloud technology ties in seamlessly with this goal. 

Fifteen percent say moving to the cloud will be their top technology expense in 2022.

The concern is diminishing that the cloud cannot serve within existing regulatory frameworks. However, efforts to reduce risks from storing data here remain hyper-focused. Converting segments of operations such as  human resources, administrative, accounting and other compartmentalized functions are steps insurer leaders recognize will bring them up to modern speed while still reducing costs associated with hosting in-house all the data related to their companies. 

One of every five insurance leaders identified improving operations while reducing costs as their greatest challenge.

Technology transformation also affords insurers the ability to scale more quickly and launch products and services using reusable cloud components and architecture. While automation was always prevalent in the Insurance industry, executives are now moving to intelligent automation that can accommodate rapidly changing processes and disparate data. 

Power of automation 

Higher computing power at lower prices through the cloud gives insurance companies the means to create and operate complex systems, distribute applications to improve customer experience, keep up with changing compliance regulations and quickly adapt to changing business processes. Relieving those burdens allows insurers to direct resources on what they do best: innovate and improve products, deliver exceptional customer experience and enhance investment and investor value.

Insurance leaders also responded that the influence of artificial intelligence and machine learning on their operations and customer data would significantly improve efficiency in underwriting, claims and fraud protection and enhance personalized customer services. 

Mitigating cybercrime 

It’s no surprise that protecting customer information and cybersecurity is the top business value proposition among insurance executives. Of 15 different key drivers of business value identified, insurance leaders named cybersecurity the most prominent 15% of the time. Only cloud migration (11%) and bringing AI into operations (10%) gained similar double-digit recognition.

Reducing the risks associated with information breaches continues to grow, but cybercriminal attempts to break into that information increase, too.

Leaders want security built into the apps and integration solutions they adopt rather than patching existing weaknesses. With a trillion dollars of data crime covered by insurance over the past two years, there’s as much economic interest within this industry as any other to aggressively pursue reductions in liability and exposure to cyberattacks.

Healthcare and financial services are eyeing blockchain technology to secure their respective data and gain a competitive advantage. Insurance providers can look at these examples of integrated measures that strengthen cybersecurity in highly regulatory environments, involving enormous sums of personally identifiable information and wealth. 

Like their healthcare and financial colleagues, nearly 20% of insurance thought leaders report using such new-age technology to draw value-added insight from their data resources to compete more effectively.

See also: 20 Insurance Issues to Watch in 2022

Technical debt investment

Finally, the need to reduce technical debt among their systems is the single most significant demand business leaders wish to be remedied pronto. However, this debt finds its genesis in patchy technology transformation initiatives of the past that were designed and implemented with little to no thought on their sustainability. Three of every four executives expressed concern over their technical debt and are seeking a solution as these debts start surfacing in their balance sheets. 

The reasons are simple: Finding the technical skills necessary to keep legacy systems properly functioning gets more challenging every year. The new staff is hesitant to work on technology that’s past its due date and unfamiliar to them. And piecemeal patches to sustain legacy platforms ultimately result in more time, effort and money than is economically defensible.

Businesses seek the most significant returns on investments. Their leadership demands it. Crossing the boundary and adopting more automation, cloud storage, artificial intelligence and machine learning use into its operations can deliver those competitive results. Insurance and other business leaders recognize this. The sooner they make the transformation, the quicker their digital transformation will pay off.

In today’s digital-first environment, insurance companies absolutely need state-of-the-art systems to support every aspect of their businesses. These core systems that support policy, billing and claims functions have been foundational to the digital transformation of insurers and MGAs for years and continue to accelerate their transformation journeys today. The pandemic only elevated the need for companies to provide digital experiences to customers and employees, such as real-time payments and virtual claims submissions. And recent research suggests that this need is influencing how insurers and MGAs are purchasing core systems.

SMA's new research report, "2021 P&C Core Systems Purchasing Trends: Foundational Technology Continues to Enable Digital Transformation," analyzes core systems deals completed last year from the top solution providers in the market today, focusing on purchases by insurers and MGAs for personal, commercial and combined personal/commercial lines.

Our research has found that the overall buying trends have remained remarkably consistent over the past several years. However, we have observed a significant shift: The number of insurer buyers is decreasing, while there has been a steady increase in MGA buyers of carrier-based core systems.

What's clear is that insurance companies will only continue to rely on core systems to create digital enterprises in the future.

The oddest venue where I've ever delivered a talk was the QEII. In 2000, a conference group had hired out the ship, which carried an audience of CIOs east for a day and a half out of New York, then did a U-turn and sailed back. The group hired me to give two talks on how the CIOs could regain control of corporate data processing following nearly two decades of decentralization caused by the spread of personal computers and local area networks.

A key concern was the spreadsheet. Seemingly every person had one, containing data that might or might not be current and that might or might not come from a source that was recognized as authoritative throughout an organization. Basically, every person could have their own version of truth, and big organizations have thousands or even tens of thousands of people. 

That problem persists. But the sort of theoretical solution I laid out 20-plus years ago is becoming practical today, because the massive improvement in computing power and connectivity means we can rethink what a spreadsheet is and how it should be used. 

The basic idea is to centralize control of data even if you decentralize its expression.

So, you make sure that all important data comes from a corporate source or can be vetted centrally after someone pops it into a spreadsheet. That's not only key for data used in underwriting, claims processing or some other business process. It's key, too, for data on the size of potential markets, the economic outlook, etc. Everybody needs to be on the same page. 

You also make sure that there are live links from a spreadsheet back to its source, so the data gets updated in real time. That way, you don't make decisions based on spreadsheets that have been frozen in time, like a snapshot from months ago. The spreadsheets reflect reality, as perceived by the corporate as a whole, at any moment. 

Users can still apply analysis and expertise to the spreadsheets, but they become the means for displaying data, rather than a separate version of truth about the data itself.

Our old friend Marty Ellingsworth wrote a very smart piece recently that takes my old premise further, arguing that many spreadsheet jockeys are so tied to their individual expertise that they resist adopting cutting-edge analytical tools that can make organizations even smarter. He writes:

"The fact is, much of the underlying actuarial modeling that still drives the industry today is built on the good ol’ Excel spreadsheet. That can make integrating new high-powered analytics a bit like installing Formula One parts on an Oldsmobile.... The most tenured and credentialed practitioners work harder at becoming experts in spreadsheets than they do adopting cutting-edge tools that can handle new data.

"Shocking as that observation may be for those who’ve been following the evolution of the InsurTech space during the past several years, it makes sense. Excel has become the primary means of communication between executives on matters of importance over the course of four decades—which is the entirety of most executives’ careers. Suddenly upending that workflow is not something that’s going to happen overnight, but the industry is going to need to evolve before the cutting edge can go truly mainstream."

Marty also notes the need for syncing up all the data in spreadsheets, especially in these turbulent times. For instance, many spreadsheets related to auto claims contain historical assumptions about the cost of replacement parts and about depreciation, even though costs for parts have been soaring and cars have been appreciating in value when they're driven off a dealer lot, not depreciating.

Now, I've always loved the origin story of the electronic spreadsheet -- a student at Harvard Business School in the late 1970s got tired of having to recalculate by hand all the values for a paper spreadsheet once he altered even one assumption even slightly. Talk about necessity being the mother of invention. That student -- Dan Bricklin, a lovely fellow who deserves to be famous even outside of computer circles -- happened to have a degree in computer science from MIT and to be acquainted with the then-new Apple II. He and his friend Bob Frankston wrote the code for a spreadsheet, and the rest is history.

But 40 years is a long time even for a seminal software tool. It's time to rethink our reliance on the spreadsheet and handle data better while clearing the way for even more advanced tools.

Cheers,

Paul 

ITL:

What is the big problem you’re seeing that you're attacking on behalf of insurance agents and brokers?

Yamini Bhat:

Many of the sales tools out there are built keeping the carrier in mind and aren’t really built with the seller in mind as the central user. So, an agent, wholesaler or a broker needs to touch at least six, sometimes 10, different systems to get their work done well – systems from which they get marketing collateral, manage their own learning and development, track their compensation, do their goal planning, etc., as well as systems that track if any of their customers or relationships have had any service issues.

You have tens of these scenarios within a day. The massive challenge for an agent or a broker, who has maybe 500 relationships, is tracking what's happening across eight to 10 systems, and then trying to be most effective within the limited time that they have.

So, the problem we are targeting is seller productivity.

ITL:

How do you attack that issue? I assume you pull everything together from multiple systems into some sort of dashboard.

Bhat:

The baseline is pulling everything together. But to be able to do it intelligently requires a couple of things to happen.

One is that you have to create a view of what should matter most to agents and brokers, without the need for them to have to stitch together context across systems. So, we have playbooks for scenarios like P&C selling or renewals, brokerage for commercial lines of a certain type or life or retirement or group benefits.

The second thing is, our system learns across multiple sellers, almost 250,000 sellers across eight countries, to identify what behaviors have had the most impact in certain contexts. You figure out what the top 5% are doing that the others could also manage behaviorally: frequency of engagement, how agents nurture their customers, how they build relationships, etc.

Third, a lot of the understanding of customer needs sits in the agent’s head post meeting. Finding an easy way for them to capture and use this information via seamlessly integrating it with wider data sets for learning and guidance on next best actions is crucial.

ITL:

What sorts of suggestions pop up for an agent using your system?

Bhat:

All of this would translate into: Paul, you have three hours this morning before your first meeting at 12. Here are seven calls you could make in the three hours before that. Call No. 2 is because your customer Charlie is coming up for renewal within 65 days. Why is that recommendation coming up now? Because, for that product line and this geography, we have seen that anyone who's done more than 95% renewal rates on their customers has gotten in touch with their customer for annual renewal 45 to 65 days beforehand, not plus or minus seven days, as is the typical playbook.

The tool might also say, Hey, because your 12 o'clock meeting is in midtown, here is someone within five minutes of where you’re going whom you haven’t spoken to in six months, who has a particular problem and whom you might be able to upsell. So, click here to send a message and see if that person will meet with you.

Even the best salesperson can plan actively and be extremely productive and intelligent, probably for one of the five days of the week. But they're not continuously planning. That’s near impossible because they're spending a lot of time in front of the customer.

Our users spend an average of 60 minutes a day on our platform, but not all at once, like they’re sitting in front of a system. They interact with our app 10 or 12 times a day, in bursts of four or five minutes.

ITL:

What makes a system like yours possible now, as opposed to a few years ago?

Bhat:

Customer expectations have changed. Any financial adviser is now expected to cover multiple products, almost to be a risk and asset allocation consultant. An agent today, vs. five years ago, has to understand a much broader range of customer needs and be able to position a lot more products.

COVID has meant that customers are also becoming much more familiar with a digital way of doing business. It's much more important now for them to be served on time, contextually, rather than have a longstanding relationship. When I have this pain point, who can serve me now?

So, you have the agent in an increasingly complex world, trying to serve a customer across their portfolio of needs right at the moment when the customer might need help. Agents need to be able to draw on multiple companies and be able to engage with their systems to get the right information at the right time. Magnify that complexity by 500 relationships an agent might hold, and the need for a system like ours is clear.

ITL:

This is great. Thanks.

I've been a fan of dashboards as a way of monitoring and managing business operations ever since I heard about one, way back in 1995. The homegrown software was not only a novelty for the time but a surprise in other ways, too: It wasn't being implemented by some U.S. multinational based on the latest thinking out of Silicon Valley; it had been developed for a family cement business in Mexico. 

So, I wrote an article about that business, Cemex, for the front page of the Wall Street Journal, where I was the Mexico City bureau chief at the time. I was pleased to see that, in the ensuing years, the dashboard played a key role in Cemex's expansion into a major player internationally (it is currently the fifth-largest cement producer in the world) and made its CEO, Lorenzo Zambrano, something of a rock star in business circles.

The initial iteration of the dashboard simply presented Zambrano with green, yellow and red lights that showed the status of the company's many operations. But, unlike with other businesses' reporting systems, those lights changed in real time, not based on some monthly or even weekly review, and he could drill down into the systems to see the source of any problems. We visited his plant in Puebla, where he showed me that, from the computer he had with him, he could monitor the instruments managing operations there and see, for instance, whether there was some fluctuation in the temperature of the kiln (which needs to operate at some 2,500 degrees Fahrenheit.)

If an old-line family business in Mexico could benefit greatly from a dashboard more than 25 years ago, why not agents and brokers everywhere in today's digital world?

We seem to be getting there. 

I chatted with Yamini Bhat, founder and CEO of Vymo, which just raised $22 million in Series C funding for its software that helps sales teams in financial services improve their productivity. The software does a lot more than show green, yellow and red lights. It helps agents manage their schedules and prompts them, for instance, on best practices about when to approach clients about renewals and on when certain clients might be open to cross-selling or up-selling. 

I think you'll find the interview illuminating, both about what's possible now and about where technology can take agents and brokers in years to come.

Cheers,

Paul 

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Claims -- and the Law of Unintended Consequences When Dan Bricklin was a student at Harvard Business School in the late 1970s, he got tired of having to recalculate all the values for the cells in a spreadsheet and realized he could produce an electronic version of a spreadsheet that would run on a personal computer from a little company called Apple. In the process, he didn't just have software take over tedious work that had bedeviled MBA students for generations; he unleashed a wave of innovations far beyond anything he expected. Many attribute to the electronic spreadsheet the wave of mergers and acquisitions that began in the 1980s and never really stopped. With an electronic spreadsheet automatically cascading changes in assumptions through a financial model, analysts could suddenly test any number of possibilities and tweak a model until it justified a takeover or divestiture. The clever analysis that resulted created any number of billion-dollar fortunes and reshaped industries. Private equity couldn't exist in the form it takes today without the electronic spreadsheet. In this month's interview for ITL Focus, my longtime friend and colleague John Sviokla takes us through some of the unintended consequences that digitization could bring to insurance claims. Based on a profound concept known as "computability," he describes a variety of ways in which the ability to capture more information in a form that computers can evaluate and process could cross thresholds that would allow for a host of new business models.  For instance, an insurer could get pictures from an auto accident and not just evaluate the cost of repairs but instantly check the spot markets for used parts and perhaps decide the car is worth more dead than alive. The decision could trigger a series of simultaneous actions -- an offer to buy the car, an offer to replace it with a comparable vehicle located via Carvana and delivered to the person's home and an offer to sell parts to dealers. Some of the concepts are so unfamiliar that they take some processing, but John is always worth listening to. When he was a professor at Harvard Business School, he was the coauthor of an article in Harvard Business Review that laid out the contours of e-commerce in 1994, before most people even knew that a web browser existed. When John and I were partners at Diamond Management & Technology Consultants in the late 1990s and early 2000s, he wrote an article for a magazine I edited, on how the age of ownership was passing away because the internet would allow everything to be rented as needed -- presaging asset-light business models such as those for AirBnB and Uber. John went on to be a senior partner at PwC and is now a partner at Manifold, a venture holding company. I hope you enjoy reading the interview half as much as I enjoyed the conversation with John. And stay tuned. He has promised to keep developing the idea of computability and how it applies across the insurance industry. Cheers, Paul   John Sviokla, a former Harvard Business School professor who has spent decades working at the intersection of technology and strategy, explores the implications of the increased "computability" of insurance claims. He explains how increased digitization not only makes the process more efficient but opens up possibilities for radically new business models.  "There's a tremendous amount of variation in how claims can and should be assessed and handled, but if you have tons of claim data, tons of pictures, structural information, etc., then you basically just have a large numbers problem, and you can compute whatever you need."  -John Sviokla Read the Full Interview READ MORE How Automation Can Streamline Claims Insurance claims software lets agencies reduce fraud, shorten the claims lifecycle, optimize costs, improve efficiency and a lot more. Read More A Wake-Up Call on Claims "The industry is lagging far behind financial services and utilities providers when it comes to the digital customer experience," J.D. Power finds. Read More Optimizing Care with AI Workers Comp Claims  Artificial intelligence and machine learning have held out some hope of heading off problems, but the industry has been cautious about exploring these possibilities.  Watch Now  3 Ways to Cut Time, Frustration, Cost in Accident Claims Embracing a digital approach reduces roadblocks to deliver exponential benefits for policyholders and your claims organization. Read More How to Transform Claims Experience Carriers that transform claims and service operations can turn a cost into a revenue-supporting, loyalty-driving, growth opportunity. Read More It’s Time to Reimagine Digital Payments The acceptance and delivery of payments must be in real time, and capabilities must let customers create tailored digital payment experiences that fit their needs.  Read More FEATURED THOUGHT LEADERS Faheem Shakeel Mubbin Rabbani Brent Williams Karen Furtado Dr. Paul Kim  Nicole Corey   View all ITL FOCUS topics Share Share Tweet

Leadership positions in the insurance industry have been historically dominated by men. But that is starting to change — and it’s a change long overdue. 

Over the past 20 years, I’ve risen through the ranks to become a leader, but it wasn’t easy. I often experienced an industry work culture that reserved management roles for male counterparts even as a number of female colleagues contributed higher-quality work and had a bigger impact on the bottom line. While I was able to succeed in this challenging environment, I recognize that more must be done to level the playing field. I applaud the steps many organizations have taken and current efforts to promote more women into the leadership positions they deserve. But I challenge insurance companies to embrace an inclusive culture that seeks female viewpoints. Otherwise, they stand to miss out on quality leaders and ultimately see their businesses falter.  

Workplace culture needs an overhaul

As an eager and enthusiastic employee early in my career, I worked hard, produced results and was promoted. I became aware that, in large part due to the male-dominant leadership team, I settled into a role where I felt I had to act a certain way that was counter to my authentic self. I focused on what I thought looked good to management as opposed to doing what elevated me to leadership in the first place — doing great work and being an emotionally intelligent person. My instinct was to be a servant leader but this was frowned upon by male and female leaders alike. 

After more than 20 years in this business, I know my experience is common. I’m one of many women who have endured this negative cycle in becoming insurance leaders. In my home country of the U.K., the entrenched workplace culture in insurance sometimes ran rampant — and its side effects cascaded through the entire workforce, women and men alike. 

The data underscores the problem. Research on U.K. insurance workers spotlighted the negative consequences of the country’s insurance workplace culture:

• 50% have witnessed problematic behavior at work 
• 41% have suffered a reduction in productivity because of bad workplace experiences 
• 29% have taken time off from work due to issues such as bullying, harassment or sexual misconduct 

Not only are these side effects damaging to employee morale and well-being, they’re also bad for business: A non-supportive workplace culture is 10x more likely to make employees quit, and a less engaged and absent workforce can cost U.K. employers up to £36 billion annually.  

While I have navigated this pervasive workplace culture and am committed to helping highlight the deficiencies and bring about change, many other women grow tired and seek employment in other industries. And the numbers show the impact of these women dropping out — only 30% of vice president positions in the insurance industry are represented by women, and just 18% of C-suite positions are occupied by women. 

The bottom line: We cannot tolerate the status quo. It’s detrimental to employees’ well-being, and it discourages women from aspiring to leadership positions.

Change the narrative by changing culture

What can insurance companies do to break the chain of long-standing toxic industry culture and better support women as leaders? 

We’re only at the beginning stages of shifting the insurance industry norm to a healthier, more inclusive workplace culture. By accelerating that shift at your organization, you can lay a foundation for a positive workplace environment, help champion female leaders and achieve better business outcomes.

Here are a few things your organization can do to bridge the leadership gap for women in insurance and create a better workplace culture: 

• Practice servant leadership. Although established leaders are important for organizational direction, it’s also important to decentralize your culture with servant leadership — a leadership style that encourages collaboration between senior and junior staff and allows people to speak up. For example, I often ask direct questions of our CEO at Amwins. Our organization encourages collaboration from the entry level all the way to the C-suite. This type of culture encourages employees to be themselves and specifically lets women know that they don’t need to become someone else to succeed. 
• Provide diverse leadership programming. I realized years ago that I no longer wanted to lead the way I had learned from executives with whom I worked. So, I took it upon myself to find learning and development (L&D) programs that taught leadership styles that align with my personal values. You can enable your employees to become leaders on their own terms by offering L&D leadership programs that cater to different leadership styles. A variety of L&D offerings is especially key for women who may have been discouraged from practicing different leadership styles in the past. 
• Democratize career growth paths. Too often, I saw other leaders around me who were given opportunities mostly for how they looked in the company’s eyes rather than their actual work contributions. Many times, I felt that I and others — especially women I worked with — were better suited for leadership positions because of our work merit, not just our image. This is why it’s critical to clearly define what growth looks like in your organization so leadership opportunities are fairly given to all employees and women have a truly level playing field. An added payoff is that organizations that focus on gender inclusion and prioritize the advancement of women report up to 61% higher revenue growth than other companies. 

Take the insurance industry into a new age 

We’re entering a new and better age for women in the insurance industry. But, to enter this new era, change needs to happen. By building a workplace environment on servant leadership, investing in robust L&D programs and clearly defining career paths, your organization can be a champion of women in an industry that has historically worked against them.

Over the last five years, the risks insurance tackles and the people it protects have undergone a  systemic shift. In such an intense period of change, the race is truly underway for insurance companies to keep up with the most innovative technologies and rising customer expectations – all while operating in an increasingly unpredictable risk environment. Insurers must move faster than ever to execute ambitious transformation plans and innovate with customer-centric products to not only gain market share but ultimately retain it profitably. 

That's why we're excited that in-person events are making a comeback this year. With all the complex challenges and opportunities facing the industry, there is real benefit to meeting face to face.

As Matteo puts it: “As a speaker, I need to feel the  energy of the people in the room and to look at their eyes while I’m presenting. Also, quality networking requires an onsite presence. You build quicker (and better) relationships with people who are physically in front of you, than virtually. I see one more fundamental reason for going back to the in-person format, too: the depth and breadth of the lessons learned.” 

In today’s fast-moving market, with unsettled customer behaviors and trends, rapidly adapting to change is fundamental not only for thriving but even for surviving. Reuters Events exists to deliver the intelligence and foster the relationships that shape strategy and secure growth for leading insurers worldwide – and there’s no better way to do this than in-person.  

Each of us have reflected on the personal experience and identified at least three connected reasons why in-person conferences are better for learning: 

• The Commitment: When you decide to attend an in-person event, you are investing a  significant amount of your time. You keep your diary clear all day; the only placeholders from the outside world are truly unavoidable things. Moreover, you trust the editor who curated the content, and you attend most of the sessions on the agenda. However, at virtual  events, where computer fatigue is a real thing, you don’t block out the calendar and listen to each session – instead opting to attend a few sessions that you have pre-evaluated as important for you, therefore limiting your experience to solely familiar content. You likely leave the online platform just after you ingested the content, leaving you without interaction and exposure to lateral thinking. On the flipside, at an in-person conference you spend time hearing from and talking with strangers, and you feed your brain with their alternative points of view and out-of-the-box ideas. 
• The Interaction: To speak in front of a cup of coffee with the speaker and some of the attendees allows you to get the color that exists around a topic. Everything seems easy on the polished slides presented, and online you are only scraping the surface of an insurance innovation initiative. It is only when talking with those who have directly experimented and tried new ideas that you can understand what happens behind the scenes. The interactions between the brains of the in-person attendees generates knowledge that no one of them would have obtained alone. 
• With an on-site presence, you are there 100%. The contents of the conference and the participants around you come first. When you are attending remotely from your home, you have many sources of distraction from your partner to your pet, and  even your fridge! There’s always that presentation to finish, and that email backlog to address. All these forces compete – together with the notifications on your phone – for your attention and limit your focus on learning.  

We are looking forward to catching up with you in-person at events in the coming months. 

This article was co-written by Alexandra Wilson, insurance project director at Reuters Events, and Matteo Carbone, director of the IoT Insurance Observatory and board member at Net Insurance. For more information or to get involved in Reuters events, email Alexandra.Wilson@thomsonreuters.com.