Tag Archives: Marr

3 Reasons Millennials Should Join Industry

With more than 70,000 expected U.S. retirees in 2017, the insurance industry faces an imminent talent crisis. Industry leaders have been eagerly searching for ways to recruit and attract young talent to replace the outgoing staff, but, due to poor industry perception, it remains an uphill battle.

The Insurance Careers Movement began as a grassroots, industry-wide initiative to combat the coming talent shortage and the ill-fated perception of the industry. We endeavor to empower young professionals who already work in insurance to share their feedback and experiences, educating their peers and students about the vast career opportunities available to them. As a part of the annual Insurance Careers Month each February, we conducted interviews with more than 30 millennials from a wide range of insurance carriers and agencies about their thoughts on the industry.

Contrary to the general perception outsiders have of insurance, findings from the interviews revealed that many younger workers view insurance as a dynamic field with significant opportunities for growth and development of personal relationships with customers and coworkers. In fact, their responses largely resemble the theme of the movement, referring to insurance as, “the career trifecta,” to emphasize the idea that pursuing a profession in insurance is stable, rewarding and limitless.

Here are the three recurring themes mentioned across all the interviews:

1.It’s Stable

In many of the interviews, one of the distinct benefits of working in insurance is the extensive career options, and the flexibility to try different sections of companies. A recent graduate can begin with underwriting, then branch into marketing, risk management or any other career path she wishes to pursue.

See also: 10 Commandments for Young Professionals  

The insurance industry holds a long, rich history and is in nearly every part of the world. Therefore, there is a vast number of opportunities available in many areas of the field, adding to the stability factor. Ashley Jenkins, controller at Pioneer State Mutual Insurance, said, “Insurance companies are very stable compared with many other industries. As an example, my current insurance employer and prior insurance employer did not have to lay off any employees during the major financial crises in 2008 and 2011.” Additionally, according to the National Insurance Brokers Association, the median salaries in insurance are all well above the national average at around $30,000 a year. With more than 75,000 jobs opening up due to retirement, members of younger generations are being afforded regular growth opportunities, promoting a stable career path that doesn’t exist in many fields; today’s young employee tends to change jobs four times before they’re age 32.

2.It’s Rewarding

Although many jobs require employees to sit in cubicles, a career in insurance allows people to interact and cultivate relationships with other customers and coworkers. Koory Esquibel, TRAC risk analyst at Marsh, said, “One of my favorite parts about this industry, and the reason why it is so easy to recommend to students and new graduates, is the ability to form so many strong relationships with colleagues and business partners.” This is a pivotal time in insurance where improved employee and customer interaction is happening at all points of the workflow. Between mobile technologies to better interact with customers and analytics to improve speeds of underwriting and claims processes, the industry has never prioritized innovation so aggressively.

According to the survey conducted as a part of the Insurance Careers Movement, more than 92% of millennials working in insurance said that they are proud to work within the industry and want to promote the benefits and opportunities it provides. Their answers also revealed that millennials are already putting efforts into recruiting their peers, as 73% of respondents said that they have tried to convince at least one of their friends to choose a career in the risk management and insurance industry.

3.It’s Limitless

With the wave of digital innovation looming and new regulations and product offerings being created daily, the insurance industry is more dynamic than ever before. Employees at all levels, regardless of their areas of focus, are challenged to come up with creative solutions to tackle emerging problems. Yasmin Ahmed at Marsh said that she was “drawn to work in insurance because of the career mobility and succession planning.  Seasoned insurance professionals plan to retire within the next five years, providing more career advancement for young people.”

In fact, according to the Jacobson Group and Ward Group Insurance Labor Outlook Study, the insurance industry has added 100,000 new jobs in the past five years, and 66% of insurers expect to increase staff this year. The number of opportunities and intellectual challenge are perfect for millennials as, according to the My Path survey, new graduates are more interested in career advancement possibilities (25%) and learning opportunities (20%) when considering a job than older generations. Therefore, young professionals consider development within their careers more important than salary or benefits.

While the industry remained largely stagnant for years, the technological disruption is closing the experience gap and opening important roles for those interested in data science careers combined with creativity. In fact, Accenture’s fintech report found that investments in insurtech more than tripled from $800 million in 2014 to more than $2.6 billion in 2015. In addition to the heavy focus and investments in IT, startups like Lemonade are joining the industry with new technology-based business models. The entrance of startups has already brought recent changes as it motivated insurance giants to expand their focus. Some of the world’s largest insurers, such as Aviva, Axa and XL Catlin, announced their efforts to establish in-house venture capital funds and stated that they will be dedicating more than $1 billion investments in startups to spearhead digital transformation. This focus on new technology also creates more opportunities for the younger generation, as they can make contributions to their team regardless of the job titles.

See also: Can We Disrupt Ourselves?  

Most say that millennials are known for job-hopping. However, according to a recent Census study, once they’re satisfied, most will stay at the place of employment for three to six years. The bottom line is that carriers must not blame the generation for their lack of interest in insurance and instead work on raising awareness about the value the industry offers. Right now, a lack of talent is one of the biggest challenges for innovation growth. Insurers will have to make concerted efforts to follow through the recruitment process and provide robust training program to attract and retain young professionals. Through recognizing the underlying cause of the crisis and making an industry-wide endeavor, the insurance industry will be able to grow as a whole and successfully combat the talent shortage.

Big Data in Insurance: A Glimpse Into 2015

Bernard Marr is one of the big voices to pay attention to on the subject of big data. His recent piece “Big Data: The Predictions for 2015” is bold and thought-provoking. As a P&C actuary, I tend to look at everything through my insurance-colored glasses. So, of course, I immediately started thinking about the impact on insurance if Marr’s predictions come to pass this year.

As I share my thoughts below, be aware that the section headers are taken from his article; the rest of the content are my thoughts and interpretations of the impact to the insurance industry.

The value of the big data economy will reach $125 billion

That’s a really big number, Mr. Marr. I think I know how to answer my son the next time he comes to me looking for advice on a college major.

But what does this huge number mean for insurance? There’s a potential time bomb here for commercial lines because this $125 billion means we’re going to see new commerce (and new risks) that are not currently reflected in loss history – and therefore not reflected in rates.

Maybe premiums will go up as exposures increase with the new commerce – but that raises a new question: What’s the right exposure base for aggregating and analyzing big data? Is it revenue? Data observation count? Megaflops? We don’t know the answer to this yet. Unfortunately, it’s not until we start seeing losses that we’ll know for sure.

The Internet of Things will go mainstream

We already have some limited integration of “the Internet of Things” into our insurance world. Witness UBI (usage-based insurance), which can tie auto insurance premiums to not only miles driven, but also driving quality.

Google’s Nest thermostat keeps track of when you’re home and away, whether you’re heating or cooling, and communicates this information back to a data store. Could that data be used in more accurate pricing of homeowners insurance? If so, it would be like UBI for the house.

The Internet of Things can extend to healthcare and medical insurance, as well. We already have health plans offering a discount for attending the gym 12 times a month. We all have “a friend” who sometimes checks in at the gym to meet the quota and get the discount. With the proliferation of worn biometric devices (FitBit, Nike Fuel and so on), it would be trivial for the carrier to offer a UBI discount based on the quantity and quality of the workout. Of course, the insurer would need to get the policyholder’s permission to use that data, but, if the discount is big enough, we’ll buy it.

Machines will get better at making decisions

As I talk with carriers about predictive analytics, this concept is one of the most disruptive to underwriters and actuaries. There is a fundamental worry that the model is going to replace them.

Machines are getting better at making decisions, but within most of insurance, and certainly within commercial lines, the machines should be seen as an enabling technology that helps the underwriter to make better decisions, or the actuary to make more accurate rates. Expert systems can do well on risks that fit neatly into a standard underwriting box, but anything outside of that box is going to need some human intervention.

Textual analysis will become more widely used

A recurring theme I hear in talking to carriers is a desire to do claims analysis, fraud detection or claims triage using analysis of text in the claims adjusters’ files. There are early adopters in the industry doing this, and there have emerged several consultants and vendors offering bespoke solutions. I think that 2015 could be the year that we see some standardized, off-the-shelf solutions emerge that offer predictive analytics using textual analysis.

Data visualization tools will dominate the market

This is spot-on in insurance, too. Data visualization and exploration tools are emerging quickly in the insurance space. The lines between “reporting tool” and “data analysis tool” are blurring. Companies are realizing that they can combine key performance indicators (KPIs) and metrics from multiple data streams into single dashboard views. This leads to insights that were never before possible using single-dimension, standard reporting.

There is so much data present in so many dimensions that it no longer makes sense to look at a fixed set of static exhibits when managing insurance operations. Good performance metrics don’t necessarily lead to answers, but instead to better questions – and answering these new questions demands a dynamic data visualization environment.

Matt Mosher, senior vice president of rating services at A.M. Best, will be talking to this point in March at the Valen Analytics Summit and exploring how companies embracing analytics are finding ways to leverage their data-driven approach across the entire enterprise. This ultimately leads to significant benefits for these firms, both in portfolio profitability and in overall financial strength.

There will be a big scare over privacy

Here we are back in the realm of new risks again. P&C underwriters have long been aware of “cyber” risks and control these through specialized forms and policy exclusions.

With big data, however, comes new levels of risk. What happens, for example, when the insurance company knows something about the policyholder that the policyholder hasn’t revealed? (As a thought experiment, imagine what Google knows of your political affiliations or marital status, even though you’ve probably never formally given Google this information.) If the insurance company uses that information in underwriting or pricing, does this raise privacy issues?

Companies and organizations will struggle to find data talent

If this is a huge issue for big data, in general, then it’s a really, really big deal for insurance.

I can understand that college freshmen aren’t necessarily dreaming of a career as a “data analyst” when they graduate. So now put “insurance data analyst” up as a career choice, and we’re even lower on the list. If we’re going to attract the right data talent in the coming decade, the insurance industry has to do something to make this stuff look sexy, starting right now.

Big data will provide the key to the mysteries of the universe

Now, it seems, Mr. Marr has the upper hand. For the life of me, I can’t figure out how to spin prognostication about the Large Hadron Collider into an insurance angle. Well played.

Those of us in the insurance industry have long joked that this industry is one of the last to adopt new methods and technology. I feel we’ve continued the trend with big data and predictive analytics – at least, we certainly weren’t the first to the party. However, there was a tremendous amount of movement in 2013, and again in 2014. Insurance is ready for big data. And just in time, because I agree with Mr. Marr – 2015 is going to be a big year.