Insurance industry addresses challengesPosted On: Apr. 12, 2016 12:00 AM CST
Talent retention, encouraging diversity and giving buyers true value are among the top challenges facing insurers, reinsurers and brokerages, according to two panels of senior executives at the Risk & Insurance Management Society Inc.'s annual conference Tuesday in San Diego.
“Risk is constant, it is not going anywhere,” said Donald Bailey, president of global sales at Marsh L.L.C. in New York. “That makes this business fundamentally a good business.
”But, he said, too often conversations with buyers begin with discussions about the price of the product.
“We as an industry have to make a pivot and start leading conversations with risk, not price,” Mr. Bailey said.
J. Patrick Gallagher Jr., chairman, president and CEO of Arthur J. Gallagher & Co., said that brokerages such as his are much better companies for being more diverse, adding that more than half of the 300 interns who will work at the company this summer are female.
While risk management and insurance education has made great strides, and schools have responded to an increased need for analytics skills within the industry, insurers and brokers must do a better job at retaining talent, said Todd Jones, co-head of North America at Willis Towers Watson P.L.C.
He said brokerages and insurance companies need to be better able to show talented individuals a career path, he said.
“We have a meaningful talent problem,” said Marsh's Mr. Bailey.
To address this, he said, the industry must focus on a “21st-century approach to training and development” and let employees access training how and when they want, for example.
A focus on innovation is one way to help attract and retain younger talent, said Robert Schimek, CEO of commercial of American International Group Inc.
When asked what advice they would give their younger selves if they were starting out in the industry, members of the broker panel emphasized the benefit of being a specialist at something you love.
“Do something that differentiates you from the pack,” said Steve McGill, group president of Aon P.L.C., who also quoted Sir Matt Busby, legendary former Manchester United manager: “Strive for perfection and if you don't achieve it, settle for excellence.”
The insurance industry needs to focus on what buyers really want, said Inga Beale, CEO of Lloyd's of London, during the underwriter panel.
One of the challenges the industry faces is the fact that it is in many ways inaccessible to buyers. For example, during the claims process, buyers cannot easily track the progress of their claims, she said.“We have a long way to go in providing information to our clients,” she said.
A continued wave of mergers and acquisitions among insurers, reinsurers and brokerages should create opportunities for insurance buyers rather than be negative for them, experts said.
When Gallagher makes an acquisition it is gaining more expertise “brains, eyeballs, feet on the ground,” and “that is very, very good for our clients,” said Mr. Gallagher.
Aon's Mr. McGill sees continued M&A among underwriters, saying that he believed working strategically with a smaller group of high quality carriers is beneficial to buyers.