Technology and Talent Gap Shaping the U.S. Property and Casualty Market

Technology and Talent Gap Shaping the U.S. Property and Casualty Market | Insurance Day

Forget the information age. We’re now in the data deluge.

This article was republished with permission from Insurance Day.

By Ron Vindivich, President U.S. Excess & Surplus, Argo Group

Forget the information age. We’re now in the data deluge.

To be sure, information has always been the cornerstone of the insurance industry. We can’t be effective from a business standpoint or do right by our clients if we lose the sharp edge that solid information provides. Earlier in my career, I recall waiting weeks – and sometimes months – for reports needed to make decisions regarding changing appetite or determining what line or class of business was having profitability issues. Such lengthy lead times must boggle the minds of those newer to the industry. And yet there is something to be said for making sure the brakes on the data speed train work to be certain it is taking us where we need to go and not racing off the rails.

Technology: green light, red light

We’re more connected today than ever before. Sensors enable data collection at every moment. They allow wearable devices to track our heart rates, capture our driving habits and allow home automation systems to be controlled remotely at the stroke of a touchscreen. The internet of things connects our present and future, with implications we continue to tease out as technology advances.

Consider driverless vehicles. Autonomous cars have grabbed the attention of many in the industry, perhaps more so than any other recent technology. Autonomous vehicles are going to have a much different impact on excess and surplus lines compared to straight auto coverage. For E&S, I predict a future full of interesting exposure questions in terms of who is responsible when an accident occurs. The car manufacturer? The software developers? Or maybe the people who installed the special traffic signals or signage necessary to interact with autonomous vehicles?

If the technology driving autonomous vehicles is as effective as it is expected to be, look for a significant drop in claims and, as a result, in premiums for those underwriting personal auto. Public entities will have to deal with infrastructure costs to accommodate these new vehicles, which is another consideration for those underwriting that line of business.

As you read this article, a drone could be hovering overhead, gathering data for an insurer who already has found value in obtaining pre-loss images of a property. That is one way insurers can head off fraudulent claims. Drones also make it much easier to document damage after disasters, such as hurricanes, which in turn speeds up the claims process. There are certainly exposures to weigh with regard to privacy and drones. Consider the exposure in a scenario in which that same drone operator uses the camera to record neighbors in their homes. The law in this area is evolving and will be critical to watch.

Industry leaders continue to follow insurtech startups such as Lemonade, an insurer focusing initially on the homeowners and renters marketplace in New York City. These startups have already begun to alter the insurance landscape by appealing to customers drawn to instant access and a swifter transaction than what insurers traditionally have provided. The insurtech movement hasn’t made a significant impact on the medium-to-large accounts in the E&S world, but we cannot assume that it won’t at some point in the future. The timing will dovetail with the migration of millennials into entrepreneurial and business leadership roles, where they will seek insurance solutions that fit with the speed they are accustomed to in other areas of their lives.

The key to bridging the talent gap 

Speaking of millennials, our industry is facing a well-publicized talent gap, with an estimated 400,000 insurance employees expected to retire within the next several years. Marrying data extraction with machine learning and artificial intelligence could very well reduce the number of hires necessary to fill those openings, but no matter what, people will always be at the heart of this business.

Across the insurance industry, employers are working hard to attract top talent. Many offer recent college graduates with risk management and insurance academic backgrounds a rigorous training program that exposes them to various disciplines within the company.

People want to do business with people they like, respect and trust. If we keep that in mind, all the other things will fall into place, from effectively leveraging technology to gauging exposures and attracting talent. For our industry, long-term success still depends on the person across the table or on the other end of the call – or text.

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