Changes Coming to Claims Talent Management

The claims talent management shortage will be relieved somewhat by increased automation and changing skill requirements, according to an industry report released last year by Ernst & Young.

Nicole Michaels and Charlie Mihaliak, partners in Ernst & Young’s insurance practice, discussed the expected changes in claims department staffing with Claims Journal recently.

During interviews with insurers, industry analysts and insurtech companies for the report released last year, Michaels said the subject of robots, automation and drones elicited the same question – ‘what does it mean for our people?’

There are two areas where insurers need to reflect on the future and how that’s going to impact how they hire, train, reward and retain their people, said Michaels. One is the impact that increased use of automation will have on staffing. Adjusters will no longer work the simpler claims, she said.

“With the introduction of heavier automation, insurance companies are signaling that simple to medium complexity claims will be more and more automated, to the point where a human being will not touch many of those claims,” said Michaels.

The second is the pace of change, due to developing technology, will require an agile environment. Claims professionals will be expected to adapt to new technology and innovation.

“The pace of change and the dynamics of all of this innovation are going to require a very agile environment. We’ll need an agile claims handler and that will be a new reality, so the question is ‘how do we deal with that?'” Michaels added.

How work happens in the claims department will change, Mihaliak added. The portfolio of claims will change as well, the result of new insurance coverages and new insureds, he said.

“Personal lines carriers are going to have autonomous cars which are going to create new ways of handling claims…that’s going to put pressure on the type of people who you need to have in the claim organization and drive claim leaders to consider how they improve their talent management processes,” said Mihaliak.

Both claims adjusters and insurers will need to invest in education in order to stay relevant in their jobs.

Insurers will have to invest in the right learning opportunities and, also, the right development opportunities, he said.

“The culture of the organization, the purpose the organization, the technology experience, there’s going to have to be an investment in all of those things to make sure they [insurance companies] are an attractive place to work and that they are place that people want to stay,” said Mihaliak.

Claims Professional Competencies Changing

While the core foundation will still be relevant, additional skills like understanding data analytics will be helpful, he said.

“Our experience has been when you get into an organization and talk to the people and understand the current skill set within, oftentimes what you’ll see is the claims organization really needs a refresher in terms of the making sure the people across the organization are calibrated to the right level of skill in today’s workload. Organizations need to be aligned with the modernized guidelines and handling practices for today and focus on the right claims outcomes,” Mihaliak said.

Personal agility will be a key attribute as working cross-functionally and within teams will be expected, he said.

Michaels said the needs of employees is not that different than what insurers need, based on changing customer expectations and automation.

The Ernst & Young report released last year, The Future of Claims, indicated that customer expectations are being defined by companies outside the insurance industry, such as Amazon and Uber.

“Being valued and feeling like you are part of the collective purpose and that you have a specific role tailored to your skill set is very important to even the worker of today and into the future,” said Michaels.

The agility needed by the insurer of the future matches the desires of the future worker.

“The worker of the future does expect to be part of organization that helps people and they have a clear role in that. They do want to work in teams and they like it when those teams assemble quickly and disassemble and they then join another team,” said Michaels.

In addition, the employee of the future expects digital interactions as part of the day to day work.

“In my opinion, the things the future worker needs could actually play very well against what the future claims organization needs,” she added.

Future Workload

There will be still be a pending workload that an individual may see through to conclusion with the help of teaming, said Michaels.

The report noted that customers will be able to perform a number of self-service tasks, handling less complex claims entirely.

“The amount of the manual work and some of the more basic thinking that you have to do to handle that claim that should go away. And you should be interpreting data and analytics type of information that you haven’t had at your fingertips before,” said Mihaliak.

Instead of handling one line of insurance claims, adjusters may be asked to handle a variety, the result of frequently changing products.

There’s isn’t going to be an expert in one line of business, according to the E&Y report. Instead, there will be a need for “fewer lower-skilled claims handlers, with a greater focus on more complex adjusting skills.”

Insurers to Invest More in Talent Management

Mihaliak said there will be an emphasis in insurers investing in talent management going forward.

“There’s going to be this shift and claim leadership teams are going to have to rebalance that portfolio…put more emphasis, more investment, more time in driving improvements in and around talent management practices, learning or the employee experience itself, that is going to be key,” he said.

Rather than assuming the talent management crisis is a millennial issue, Michaels said, it should be looked at as impacting the entire workforce.