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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.

Infrastructure: Risks and Opportunities

One of President Trump’s stated goals is to initiate significant investment in U.S. infrastructure — bridges, roads, airports, seaports, pipelines, fiber optic cables and water projects. As with any major spending measure — and the most common number being tossed around for this one is $1 trillion — there will be political hurdles. However, the U.S. House of Representatives Transportation and Infrastructure Committee just launched its #building21 campaign effort to promote its vision for 21st Century American infrastructure, calling for significant investment.

Infrastructure spending of such magnitude will bring many opportunities for construction and infrastructure companies. Organizations need to be strategically positioned to capitalize on the opportunity, well-prepared to engage in the heightened competition facing the industry and flexible enough to absorb an increasing level of risk.

Infrastructure Plans

In December 2015, Congress passed and President Obama signed the Fixing America’s Surface Transportation Act (the FAST Act), which increased the collection of gasoline taxes to pay for transportation infrastructure projects. The FAST Act authorized $305 billion for highway and motor vehicle safety, public transportation, motor carrier safety, hazardous materials safety, rail and research, technology and statistics programs. Although FAST Act funds are to be allocated to rehabilitate the country’s transportation network, there remains a significant infrastructure deficit in the country.

During his campaign, Trump called for $1 trillion in infrastructure investment in transportation, telecommunications, water, power and energy. Before his inauguration, Trump’s transition team circulated a list of 50 priority emergency and national security projects. Since then, Trump has given every indication that he plans to continue pushing to enhance infrastructure. For example, on Jan. 25, he signed an executive action related to one of the more controversial project proposals, a wall along the U.S.-Mexican border that many experts suggest would cost $15 billion to $25 billion.

See also: Insurtech Investment to Flourish in 2017  

Against the same funding challenges the Obama administration faced, Trump’s plan calls for much of the infrastructure investment to be driven by the private sector through a series of tax credits and private funding as a means to encourage infrastructure investment in a revenue-neutral fashion. Trump’s plan also calls for the relaxation of various regulations to accelerate project delivery times and reduce cost.

Challenges and Headwinds

Most Democrats and Republicans agree on the need to improve this country’s infrastructure. A key difference, however, is how to pay for the upgrades.

On Jan. 24, Senate Minority Leader Charles Schumer introduced a $1 trillion infrastructure plan that relies heavily on direct government funding rather than on tax credits and private investment. Democrats generally argue that, although tax breaks may encourage investment, they will not necessarily bring about those infrastructure projects that are most needed, because the underlying economics may not make such projects profitable.

Despite these political differences, it is likely that some form of Trump’s plan will secure support as infrastructure renewal is a common interest. If an infrastructure spending bill is passed by Congress, organizations in the construction and infrastructure industries will be affected in a number of ways, including:

  • Increased competition: With an economic slowdown in some areas of the world and with increasing volatility, a large inflow of foreign capital will likely occur as international contractors seek opportunities to invest in and build U.S. infrastructure projects. Consolidation of market share in the sector is also likely.
  • Talent and labor shortage: Already facing a shortage of skilled professionals, the construction industry will need to compete with other industries to attract and retain talent.
  • Private investment: Regardless of which infrastructure plan takes hold, public-private partnerships will be a pivotal model to deliver infrastructure in the immediate future. Consider that more than 30 states have enabling legislation in place and are poised to act immediately on already-identified projects.
  • Increased risk: We are witnessing an ever-increasing trend of infrastructure projects being delivered through complex delivery methods, including design-build; design, build, operate and maintain; and integrated delivery. All such contracts result in increased risk being assumed by contractors. With competition expected to heat up, contractors will be expected to have greater risk-bearing capacity. Another consideration is that infrastructure and construction companies are increasingly tied to the “Internet of Things” through operational technology, electronics, software and network connections; this brings significant cyber exposures. And infrastructure itself is increasingly a target of cyber criminals.
  • Risk financing: Insurers and others continue to develop new risk consulting and risk transfer products and services. Not only do insurers absorb performance and hazard risks associated with infrastructure development, they are increasingly becoming infrastructure investors, as well. It remains to be seen how this level of infrastructure exposure will lead to new products and services or new alternative risk structures.

See also: New Wellness Scam: Value on Investment  

The American Society of Civil Engineers (ASCE) estimates that the U.S. will face a $1.6 trillion infrastructure deficit in 2020. Although it is too early to know exactly how the new Congress and the Trump administration will proceed, we believe it’s safe to expect that infrastructure and development will be a hot topic this year and for many to come. If you’re not doing so already, now is the time to discuss with your advisers the risk and insurance considerations at the advent of a likely major U.S. infrastructure investment initiative.

Dear Insurtech, It’s Not You, It’s Me

Dear Insurtech,

It was nice getting to know you in 2016. You served your purpose, but now it’s time for RiskGenius to move on. It’s time for me to move on.

There were a series of events that helped me realize that you, insurtech, and me, well, we can’t really be friends anymore.

I can’t be conference guy 

Recently, I was in San Francisco meeting with some insurance professionals who are plugged into the insurtech scene. One of them brought up a recent insurtech conference and commented, “You are everywhere, Chris!”

I shuddered. I have never wanted to be “conference guy,” but I got sucked into being just that this year, and there are way too many insurtech conferences.

Little comes out of insurtech events 

I often attended insurtech events this year and wondered at the end, “What will come out of that?” And very little developed. As the year progressed, it started to dawn on me what was going on. And then, finally, everything crystalized after one phone call on Dec. 13.

A wonderful insurance professional called to let me know he was leaving his firm at the end of the year because he was frustrated by the lack of engagement by his firm with insurtech companies.

See also: The Future of Insurance Is Insurtech   

It hit me: Insurance companies are simply trying to understand what the heck it is we insurtech companies are doing. Often, there are no real plans for insurance companies to actually engage with insurtech companies.

I need to focus on the doing, not the talking 

This year, we have found a tremendous partner in an insurance carrier that I hope to tell you about soon. There are also pockets of people focused on insurance technology innovation — but I need to find these people because they often aren’t at the conferences, or aren’t on Twitter or LinkedIn.

Some of the best events I attended were intimate gatherings. Insurance Thought Leadership invited me to a cyber insurance conference I loved. Marsh invited me to an executive retreat that was incredibly insightful. And an insurance carrier allowed us to participate in an innovation challenge with internal employees that changed the trajectory of our company. But none of these three events focused solely on “insurtech.”

RiskGenius is ready

As I look toward 2017, I am going to remove both myself and RiskGenius from the insurtech scene. Instead, we are going to be actively seeking out those partners that can use our software right now. It’s no longer about tinkering and building algorithms; RiskGenius is weaponized and ready to go.

Two areas have emerged where RiskGenius fits perfectly.

First, RiskGenius is primed for policy automation.

We can take an entire library of policies, show you similarities and differences and then serve up the correct policy based on what the user needs.

See also: 4 Marketing Lessons for Insurtechs  

Second, RiskGenius analytics has people really excited.

We are now able to take an insurance policy that a user provides us and compare it with all the policies we have previously collected and stored. Soon, I will write about how we have evaluated more than 400 cyber insurance policies.

This is awkward, insurtech. But we can’t be a “thing” anymore. I’m sorry — it’s not you, it’s me (and RiskGenius). We want more for our future.

Thanks for the memories,

Chris Cheatham

CEO, RiskGenius

What Can Derail an Important Event?

As Brazil copes with the Zika-virus outbreak, political turmoil, civil unrest, crime, water sanitation and the looming threat of terrorist attacks, thousands of athletes, fans and officials are making their final preparations for the Summer Olympics. While none of the crises look likely to derail the Rio 2016 Games, the list of concerns reads like the list of covered exposures in a well-designed cancellation of event insurance policy.

The International Olympic Committee is not alone in struggling to cope with the world of extreme events. Just look at some major sporting events that have recently been canceled, relocated or postponed:

  • National Football League (Buffalo)
  • English Premier League (Manchester United)
  • Major League Baseball (Pittsburgh and Miami)
  • Southeastern Conference Football (LSU and Tennessee)

If the list were to be expanded beyond sports, the number of concerts, events and conventions suffering the same fate is too large to compile. So, what should be considered when planning an important event, whether large or small?

Infectious diseases:

Zika is the latest of many infectious diseases to result in global travel advisories, the banning of large concentrations of people or implementation of public health control measures Communicable disease resulting in quarantine or restriction in people movement by a national or international body or agency is simply one exposure that concerned parties can eliminate through effective use of insurance solutions.

See also: How to Think About the Zika Virus

Extreme weather:

In today’s world of extreme weather events, once remote weather-related possibilities are becoming more and more frequent. Previously safe geographic areas have experienced hurricanes, earthquakes, wildfires, snowstorms, hailstorms, etc., all of which can leave event planners madly scrambling to determine the extent of damage incurred and whether their carefully choreographed event can go on. Even if the adverse weather does not damage the venue(s) of the event itself, the mega-facility guidelines of the nation may require the requisition of the venue by emergency personnel or evacuees in the event of a hurricane, wildfire, dam-breaking or some other catastrophe.

Terrorism:

Despite recent World Health Organization warnings, foremost in the worries of most risk managers for large-scale events is the rise of terrorist actions worldwide. Protection against terrorist acts can be included in cancellation of event policies for an additional cost. Such coverage would typically exclude the use of nuclear, chemical or biological materials, or radioactive contamination post-Fukushima, but even these eventualities can be covered if a thorough market analysis is conducted. Many policies do not require that a terrorist event actually take place; they can be designed to protect an entity’s financial interest if the event is affected by the mere threat of terrorism, if the threat is confirmed by a recognized competent authority on the state, national or international level.

Key person coverage:

For events that rely on the attendance of certain personnel, performers or speakers, organizers can buy coverage specifically protecting against the non-appearance of key people.

Public sector strikes:

Public sector strikes, particularly those involving transportation services, and damage or loss of utility service to a venue also lead to many events being canceled, relocated, postponed or interrupted and are all insurable exposures.

Business interruption coverage:

Contingency insurance exists to provide protection for the expenses an entity occurs in organizing an event as well as the revenue the event should generate for the organizers, promoters, municipalities, etc. There is no “boiler-plate” solution for a specific event. It is essential that the event organizers and insurance representatives spend time evaluating the actual financial exposures the entity has. Expenses are normally the easiest to determine because they are fixed costs. However, many streams of revenue are often ignored if too much attention is given to the largest items, such as ticket sales, instead of supplementary income generated from merchandise sales, concessions, sales, lost sponsorship monies or even parking fees for attendees.

See also: The Defining Issue for Financial Markets

It is equally essential to determine who the financial responsibility ultimately rests with. Sponsorship contracts serve as a good example of complex obligations. If a corporation has agreed to spend millions to be the signature sponsor of an event, and the event is moved to a different venue where companies other than the sponsor already occupy desired signs and exposure, it should be determined if the expense is a sunk cost to the sponsor or if the hosting party has to reimburse the sponsor. This contract clause should dictate who receives the insurance policy benefit. Experience in determining financial exposure that each party incurs when events are in their initial planning stages is invaluable when custom-designing insurance policies to cover all possible financial liabilities.

It is only a matter of time before a global spectacle of an event is canceled due to an unforeseen peril. While the emotional loss experienced by the participants and attendees is high, the financial impact can be mitigated or completely eliminated through the insurance market.

Think Twice Before Playing Pokémon Go

In upstate New York, a distracted driver crashes into a tree. Elsewhere, safety officials warn of an uptick in pedestrians walking into stationary objects, and even traffic. The connection, according to news reports: the latest gaming sensation, Pokémon Go.

The game connects the digital and real worlds through augmented reality (AR) technology, and downloads are skyrocketing in the U.S. and globally. But for all the fun, risk professionals need to keep in mind that AR and other “disruptive technologies” can create safety risks and potential liability issues.

Distractions Increase Risk

Pokémon Go players seek to capture “Pocket Monsters” in real-world locations, from homes to businesses. However, as with other engrossing technologies, players can become so focused on their mobile devices that they lose track of the real world. Regulators have even posted signs to warn drivers of potential dangers.

See also: An Eruption in Disruptive InsurTech?  

For risk professionals, distractions are no game. If you haven’t already, consider assessing the potential impact from mobile apps in such areas as:

  • Employee safety: Gamers can put themselves and others in harm’s way.
  • Visitor/customer management: If your establishment is tagged as a Pokémon Go hot spot — with or without your consent — you may see increased traffic.
  • Fleet safety: Gaming apps bring much the same risk as texting.
  • Cyber risk: Data privacy and related risks stand out.

As you assess AR and other disruptive technologies, lean on basic risk management steps, including a review of insurance coverage in such areas as:

  • Workers’ compensation: Although an injury suffered while playing a game would generally fall outside coverage, an employee may hide that game-playing was involved. Any spike in claims could affect how much you pay for coverage.
  • General liability: If a customer or other person is injured on your premises because they are distracted, there could be a claim against your general liability policy. If you invited people to play the game on-site, could that affect the claim?
  • Automobile liability: Distracted driving is a known factor in auto accidents. How will your policy respond to an accident in which game-playing was involved?

But don’t wait for an insurance claim before taking action.

For example, remind employees to pay attention to their surroundings. Review and update driver safety programs, pointing out the dangers from mobile phones, navigation systems and other distractions. Remind drivers of the risks from other drivers and distracted pedestrians.

See also: A Mental Framework for InsurTech  

Additionally, it may be worth specifically mentioning Pokémon Go and other distractions in workplace safety programs. Be sure to include remote workers, for whom the lines between occupational and non-occupational injuries may be especially blurry.

Disruptive technologies promise many benefits, but risk professionals can’t be distracted from managing the accompanying risks.