For years Advancio has been actively involved in the insurance industry, building relationships with key decision-makers, attending high-impact industry events like ITC Connect, and diagnosing technical issues. This unique perspective has given us an insight into what we are likely to see in 2023. So we narrowed it down to 3 main things to look out for.
1. Resource Turnover
There’s one thing we must accept and that is that people in the insurance industry are moving on. Whether they are retiring or taking part in “The Great Resignation”, they are leaving… concluding their stay sort of speak. And finding capable replacements is proving to be a real challenge. It’s taking longer than usual; the process is difficult, and the cost of a bad hire can be very expensive.
Additionally, to attract fresh talent, insurance providers must think outside the box. The usual benefits that would be king to older generations like 401k, 529 College Savings accounts, and health insurance have become standard and expected. To add to that, we were just beginning to understand millennials and BOOM, we must now cater to the young Zoomers. They are now demanding freedom and the ability to work from ANYWHERE! We now have 5 generations working together at the same time.
Solution: Insurance companies must start with a reskilling and upskilling strategy for their talent to ensure retention. While training courses can be the first thing to come to mind, it’s a constant expense with a slow return of investment. You can opt for a Learning Management System (LMS) or Training Management System (TMS) so your staff can perform at their best, whether they are in policy payment services or in the claims process side of things. All generations want to learn and develop, and they want to do it in their own time without the restrictions of having to be present in a classroom. Empowering them with systems and tools will provide an unparalleled opportunity for all generations.
2. Rising Costs
Competition is alive and well in the insurance industry. Although we have seen a lot of mergers and acquisitions in recent years, new tech startups empowering consumers to purchase, service, and process claims online are breeding competition. Consumers have plenty of options to insure their house, car and health. Carriers will have to go the extra mile to stay competitively priced, controlling risk factors, and keeping their loss ratio in check.
The general economic environment will be a tough one in 2023. The cost of living will increase above the usual 3% to 5%, energy costs will continue to be high. In addition, rising inflation will create a difficult climate. But, in the insurance industry, we have two additional factors contributing to the equation and making everyone feel the effects exponentially. The first refers to product marketing, the cost to acquire new clients is higher than ever. The second touches on increased regulatory requirements.
Solution: Whenever you are faced with the challenge of cutting costs you must look to optimize and make current processes efficient. Is there duplication of effort? Can we automate this? How can data be our tool to predict behavior? Centralizing and streamlining efforts with technology can be a game changer. This in addressing the cost issue and can become a competitive advantage.
3. Legacy Systems
With the help of the pandemic, the insurance industry has been forced out of its comfort zone. Consequently, insurance organizations must invest in digital transformations, spearhead the creation of cloud infrastructure and explore big data and AI. These technical investments have come with their own challenges. Capitalizing on those investments and materializing a return on the investments using clear-cut metrics make it difficult for implementers to request any additional funding.
The key to any digital transformation initiative is change management. Digitalization can feel like a lot all at once. The challenge relies mainly on outdated systems, commonly known as Legacy Systems. And without high-quality and strategic tech partner, businesses can take forever to see the results of their digital migration.
Solution: It’s difficult to know where to start, or even if you already did it’s hard to retake where things were left with an already spent budget. What we would suggest at this point is to evaluate all stakeholders in the tech initiatives you have running. Analyze the areas of opportunity and make change management a central role in the plan (not an afterthought). Lastly, measure your digital quotient and create targets for improvement.
Hey, we can help…
If you have any questions on this subject or would like any support with your tech disruptions, Advancio would love the opportunity to help. We are a Los Angeles based IT outsourcing company with more than 10 years of experience and countless projects under our belt. We help fast growing companies implement IT solutions that intensify business performance, results, and create valuable opportunities.
Get a free 15-minute consultation with Jay Ibarra, licensed insurance agent and InsureTech facilitator and figure out the right course of action for your business today.