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Covid-19 radically reshaped the insurance workplace with employee well-being becoming a key metric, as well as highlighting the need for agile ways of working. In the aftermath of the pandemic, insurers recognize they are in war with other sectors for scarce talent, and workers with critical skills are more empowered than ever.
Since the pandemic, working practices have also significantly changed with remote working becoming more popular.
An audience poll at September's Insurance Risk & Capital Americas 2022 conference in New York highlighted this shift to hybrid work by revealing 55% of surveyed attendees maintain only two core days in the office per week, but otherwise work remotely. It also concluded only 13% of participants said they were expected to be in the office every day.
If this disruption wasn't enough, fallout from Covid-19 prompted the Great Resignation, an economic trend of workers leaving their jobs in mass numbers since the pandemic, which has impacted over two-thirds of US insurers' operating models, another InsuranceERM poll revealed.
During the conference, a forthright discussion ensued on the long-lasting effects of this upheaval.
Brian Coleman, Vice President for “Global Risk Management” at Combined Insurance, explained how Covid" popped the lid" on insurers' business continuity planning.
"Not only were we worried about people coming back to work, we worried about who would come back and how would they come back and what kind of energy they would bring.
"And I think as we exposed the work at home environment, it really opened up doors that we as management weren't ready necessarily to have conversations around."
Great Resignation impact
At the beginning of Covid-19, immediate concerns for insurers were around financial market mortality and operational risks, but there has also been a broader and long-term fallout.
According to participants at the conference, the Great Resignation prompted the sector to re-evaluate talent management.
Paul Wigham, formerly senior vice president for risk and controls at Oscar Health, noted the status of people risk on board risk registers has intensified rapidly in the Great Resignation era.
"I don't think anybody really took that seriously," said Wigham.
He explained "everybody felt good that" factors such as employee attrition rate and succession plans were being sufficiently measured, but then "Covid came along and ramps all of these things" together.
"What if you lose a third of your workforce and most of your succession plan and all these things are intertwined?
"We haven't really thought about it that way."
Adam Seager, chief risk officer (CRO) for the Americas at ArgoGlobal, said the trend led to the sector, as well as Argo, asking "what talent is left?".
"The talent pool became far more sought after, the cost of individuals went up and also people that maybe had been stalling out about making a move because of Covid suddenly had plenty of opportunity," said Seager.
He explained employees with technical knowledge, in particular, began leaving in large numbers and replacing them became "very very expensive" and there "just weren't the people around" to replace them.
Seager added how the loss of employees in middle management was particularly challenging.
"Middle management have been really cohesive through Covid. They've kept organizations and these new remote working models together.
"I think every company is still suffering from it [the Great Resignation] and to some extent the power has been put into the hands of the individual"
"And of course, the other thing we realized was that skillsets and intellectual property have developed organically in processes and organizations. It wasn't all written down and easily transferable, particularly not if the person you're transferring it to, was on the other end of the screen.
"It raised a whole set of issues about transition succession," said Seager.
Wigham explained the Great Resignation took place in stages with the initial wave of departures coming from employees retiring or changing careers altogether.
"Now, depending on your organization, and whether it's changed or not, there's the Great Resignation because of mobility, people are just deciding to go elsewhere,” said Wigham.
"Every company is still suffering from it [the Great Resignation] and to some extent the power has been put into the hands of the individual.
"Companies always felt that they had the levers they needed to keep the right people or in the worst case, attract somebody to replace them, but I think that power is diminished somewhat."
Wigham said the key to making the insurance sector more attractive is providing a real work-life balance to allow for greater time with family and other leisure activities.
"[The phrase] work-life balance has been used my whole career. I think the pandemic actually explained what it meant.
"This whole thing about what is it that we do to reward our people is less about money or only money. And it's about all of these other things that people now just need."
He added Oscar Health had used such factors as a way of attracting talent.
"It's important you can entice people back into this workforce who left the workforce because they can't come to the office or don't want to go to the office. We can incentivize people to re-join the workforce this way.
"So I don't think the ping pong table is going to get used that much going forward."
The Justice League
Coleman took inspiration from DC Comics by claiming the risk function must become like the "Justice League" when taking on their new responsibilities of managing people risk.
"When they [employees] look at our risk function, they know they can report things, they know that they can talk to us, they know that we're willing to work with them on situational challenges. We'll be their spokesperson."
Coleman stressed the risk function's role is to be "at the door" of the board to present issues.
"Some of the things that we want to present, they're not easy to fix," said Coleman.
"Just being open to presenting it in our reporting role is important. And so, we have adjusted our key risk indicators to account for some of these things."
"[The phrase] work-life balance has been used my whole career. I think the pandemic actually explained what it meant."
Argo Global's Seager also stressed CROs must take a key role in addressing people risk by "keeping an eye on society and societal changes", but that convincing board members and senior executives of this can be difficult.
"All of the softer points as we used to call them about people risk are now actually the hard points".
Seager cited the trend of working populations moving out of cities following Covid as an example of such a risk, that is now firmly on the agenda.
"We used to be talking about mega-city risk, now we're talking about depopulated city risk. It's really important that we raise these issues successfully."