Last week, Novarica had the opportunity to host our first ever Regional Roundtable in Texas. This session was held in National Life’s home office in the Dallas suburbs—a terrific venue to meet with carriers who came from as far away as Austin and Houston. As always, this regional event provided a valuable opportunity for our clients to network with peers, hear about new Novarica research, and share lessons learned related to the challenges and successes of their recent transformative initiatives. Following a keynote presentation that framed key industry trends and summarized recently published Novarica research, a wide-ranging and highly interactive discussion centered around data strategies, innovation, and talent management.
Data Strategy
CIOs spoke at length about data strategy and how it is best achieved through business ownership and sponsorship. Successful data governance should also include the collaboration of IT and business teams, engaging all impacted business functional units with the goal of ensuring unified data definitions, a single source of data, and a 360-degree view of the customers.
A near universal truth for carriers emerged from this discussion: the criticality of helping the business area understand how accurate and relevant data can empower decision-making. Some participants in the discussion found that linking their data strategy to their digital strategy helped provide awareness about the power of reliable data. One of the key discussion points was that digital strategy efforts initiated at carriers frequently highlight issues in the data realm, which can adversely impact an organization’s ability to deliver the desired results.
Innovation
Much of the discussion focused on innovation strategies. A central theme highlighted the importance of providing purpose and clarity around the goals of innovation, including clarity around how success will be defined. Carrier representatives talked about what innovation means to them and about aligning innovation with business goals and challenges. The discussion also touched on business strategies, such as separating innovation teams from the “business as usual” operations.
Another approach that garnered significant discussion was the idea of creating tracking brands; these brands are separate from the parent company and allow for exploration of ideas and options without risking adverse impact on the main corporate brand. Allstate and MassMutual were highlighted as examples of firms that have pursued this approach. Culture remains one of the critical elements for organizations looking to introduce innovation into their operating model, given that the concepts of iterating and failing fast are generally out of the norm for many carriers.
The importance of senior executive leadership creating the appropriate environment was a subject of lively discussion. There was an immediacy about these issues, given that the meeting took place within days of the closing of the open comment period on AM Best’s proposed rating framework for 2020, which includes an innovation element. Several carriers noted that the rating agency has begun to include discussion of this change in approach as it executes on current year reviews.
Talent Management
Talent management wove its way into multiple conversations, from bringing in Millennials and Gen Zers to the impact that general aging in the workforce is having on a variety of high-skill areas, including underwriting, claims management, and the sales forces that many carriers are highly dependent on. The discussion about attracting new talent highlighted the value of participating in college internship programs as well as offering permanent positions earlier in candidates’ academic careers. Certain financial incentives, including student loan repayment programs, also appear promising. Another key consideration for carriers when hiring younger employees is to bring them in as a cohort to create a sense of engagement and camaraderie; bringing them into an existing workforce piecemeal has frequently produced poor retention results, which can adversely impact a carrier’s reputation as an employer in a local market.
At the conclusion of the meeting, it was evident that all carriers are experiencing an enormous amount of change in their organization; the best ways to achieve success are through continuous communication about business goals and key learnings along with celebrating wins, no matter how small they may seem. The specific impacts may vary by line of business, but all carriers are being impacted by the pace of technology, demographics, and customer preference changes.
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