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    Top HR Challenges in the Insurance Industry for 2023

    November 22, 2022

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    HR Tech Can Help Solve the Top HR Challenges Plaguing the Insurance Industry

    The insurance industry is on the cusp of massive growth, but still faces several HR challenges that need to be addressed. Here’s a look at the major challenges insurance firms will face this year, and what the possible solutions are.  

    The insurance industry is sitting on massive growth potential. The sector shows great promise for the coming years – revenues are predicted to grow to $7.5 trillion by the end of 2025. 

    As the industry is preparing for this phase of growth, insurance companies have to prepare for major transformation—in the kind of employees, the size of the workforce, the volumes the industry operates with, the way insurance companies are structured, and the scale of growth, among other things.

    Major Challenges Plaguing Insurance Companies, and How HR Can Overcome Them

    HR leaders will be tasked with building a workforce that is skilled for the new ways of working in the insurance industry.  Implementing a transformation of this scale is a massive task. Strategizing the process, securing approvals from the leadership, and finalizing the HR tech product vendor is but a small part of the process. Ensuring that every employee in the organization uses the tech tools is the real challenge.  

    Executing this, though, comes with a host of challenges. Let's look at the top challenges, and how HR technology can help.  

    1. Lack of training and upskilling initiatives for employees   

    The insurance industry is in the midst of a major transformation, where automation, digitization, remote working, and an increasingly diverse workforce are all going to impact the day-to-day work of employees. Yet, little time and resources are invested in training and learning & development (L&D) initiatives for employees. The insurance industry spends the third-lowest time on training, when compared to all other industries.     

    Tech tools can help organizations plan, execute, and review training or L&D programs efficiently.  With HR tech products, companies can: 

    • Plan, schedule, and execute training programs 
    • Match skill gaps with the training programs required  
    • Manage the entire training process, evaluate employees periodically  
    • Support peer-to-peer learning  

    2. Low employee engagement levels    

    Insurance isn’t among the more glamorous industries that young people aspire to be a part of. Although the industry employs millions of people, attracting and retaining talent is a struggle because candidates lean towards other financial sectors such as fintech, banking, or securities. They expect the kind of compensation, benefits, and work policies prevalent in other industries. Employee turnover is also quite high, particularly among sales staff. A large section of the existing workforce is set to retire over the next few years. The industry, and HR leaders in particular, are now at a spot where they have to strategize to hire young talent and staff up strongly for the coming years.   

    Adopting HR tech is a straightforward answer to this need. There’s a cultural transformation underway in insurance companies where young people are seeking workplaces that are digital and mobile-first, empathetic, and rewarding. New-age HRMS platforms are designed for the workplaces of the future, and can be used to connect with employees, share the company vision, and give them the kind of career and workplace they desire. With a unified HRMS, employees can conduct all their administrative activities such as attendance, managing leaves, travel requests, training, L&D, performance appraisal, grievance redressal, etc., on the tech platform. In addition, mobile apps can also ensure that diverse, remote teams can work together and more efficiently.   

    3. Need for agility and improved coordination with a diverse workforce  

    The insurance industry in most part will remain remote or virtual going forward, and a large section of the workforce is expected to be freelance or contingent workers. The industry will also see an increase in employees who are new to the internet, require local language support, and are spread across parts of rural and semi-urban Asia. HR leaders will have to train their workforce accordingly and put processes in place to improve agility and collaboration.  

    HR tech can help employers with workforce management and help employees with networking among peers from different locations. Modern HR tools are designed to support activities such as remote hiring, onboarding, and virtual employee engagement. HR tech also supports periodic monitoring of these initiatives through surveys, polls, etc., so employers can tweak their processes based on employee feedback. Particularly for the section of the industry that skipped the desktop/laptop computer phase, mobile apps are not just convenient but essential. 

    4. Shift towards customer centricity    

    Customers are demanding personalized services from insurance companies. They expect companies to invest more time and have a deeper understanding of their needs. The shift to remote work is a boon for insurance companies because they now have the bandwidth to nurture deeper relationships with customers through multiple virtual conversations rather than have just one in-person meeting. This, however, comes with the challenge of rewiring the industry's mindset and operations, and putting customers front and center.   

    Insurers need to train their talent to keep customers at the center of everything they do. Companies should encourage employees to nurture relationships with customers, be proactive and empathetic, and connect with customers of varied demographics.  

    HR tech is extremely useful to support teamwork and collaboration across geographies. They provide employees with knowledge bases to better information flow across teams, helpdesks for support and grievance redressal, and e-noticeboards for regular information sharing.  

    5. Cyber security risks and compliance risks     

    With digital transformation comes the need for cyber security and data privacy, and the global insurance industry is particularly vulnerable to cyber-crime. Insurers hold a lot of sensitive data about customers and policy holders making them an obvious target for cyber-attacks. Leaders at insurance companies now have to step up their cyber security systems and also train employees across the board on the importance of security and data privacy. There will also be a need to conduct training on the importance of cyber-security and hold periodic assessments to gauge if employees are following the recommended practices.  

    HR tech tools are helpful in keeping employees updated on the latest regulations, recommendations and compliance policies. Features like e-noticeboards and push notifications can help keep employees apprised of the latest developments and news around cyber security.  

    Internal social networking tools and communities can also be used for conversations and discussions on the importance of data security. Adopting technology can also help compliance function leaders with eliminating laborious manual tasks and improve efficiency. Software can assist their decision-making and strategy by providing insight from data analysis, keeping tabs on regulatory updates, ensuring transparent communication between departments, etc.  

    6. Need for use of data and analytics  

    From the kind of talent that is hired, to the way workforce planning is done, to where these employees will be located, everything about the insurance industry workforce will be different from what the industry has typically witnessed in the last few decades. Insurance companies now need to use a lot more data and analytics to ensure that the business operates efficiently and is prepared for the future of work in insurance. The industry, however, doesn’t make best use of data which might hold companies back from growing to their potential. Only 6% of insurance companies are currently using people analytics as a part of making decisions regarding their workers, making it difficult to even diagnose low productivity levels.  

    HR tech will be a one-stop solution for insurance companies to up their data game. It can help insurers with AI-driven features for hiring and recruitment, data-driven decision making on workforce planning, or using employee data for better engagement and productivity. Technology tools can provide companies with information about employees and their productivity through dashboards and surface data-driven actionable insights. Talent analytics that come with HR products can help insurance companies identify and hire the right kind of talent.

    The Need for a Next-Gen HR Technology Platform 

    Investing in a mobile-first HRMS platform will ease several of these problems for insurance companies. From identifying the right kind of employees using AI-driven recruitment modules, to onboarding employees efficiently, training employees, engaging with them continuously, and managing their work, HRMS platforms support all these functions and more.  

    HR tech will be useful not just to fix current gaps but also to give leaders the time and resources to plan for the future of work.

    Read our comprehensive guide to learn how HR technology can help you fix each of these problems, and how leading insurance companies use HR tech to improve efficiency.  

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