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With strong growth predicted for the insurance sector beyond 2022 and many businesses reporting a record year in 2021, the post pandemic outlook is positive.
The industry is facing significant change, with automation in the form of AI and machine learning at the forefront. This innovation offers considerable opportunity for those businesses prepared to invest time and budget.
So with the demand set to continue to rise and technology transforming the industry, can businesses keep up, can they respond in order to take advantage of increased opportunity, what are the barriers to achieving this growth, and how can they be overcome?
The war for talent
Its been no secret that the last 12 months have seen demand outstrip supply and it really has become a candidate’s market. Attracting and retaining top talent in a hybrid working environment has become a challenge, businesses are having to focus heavily on what they can do to compete to attract and retain the best. Salaries are increasing by up to 25% and in some cases more, counter offers are at an all time high and candidates are in a position to ask for what they want. If businesses can’t attract and retain the relevant people, how are they able to sustain growth?
Tech adoption versus the human touch
We’ve already touched upon the digital transformation taking place in the industry as we speak, roles that in the past would have been carried out by a human are being partly or entirely automated. Skillset requirements are changing, soft skills are being required where they never have been before and technical skills are being used to compliment softer skills in areas of customer engagement. This means there is a fine balance between adopting the latest technologies to stay ahead and ensuring, as a business, you still maintain that human touch. Getting this right is certainly a challenge and a potential barrier to growth. Businesses must understand where and how the human touch can add value and ensure they invest in the right skill sets to accommodate a changing digital landscape.
Regulation; suffocating the sector
“The FCA is in danger of becoming an impediment to the effective working of the insurance market, through its implementation of regulation for the sake of regulation” according to Jonathan Evans, Chairman of BIBA, speaking in January at their Manifesto launch. The sector is being bombarded with more and more rules, data requests and reporting requirements, these disproportionate regulations and mounting costs are affecting competition, productivity and innovation in the sector and therefore inhibiting opportunities to grow.
What our research revealed…
In a recent Broker Summit, involving the top leaders from Brokers across the UK, we wanted to understand what they considered to be the top barriers to growth in their businesses and if their experiences differed from that reported on the sector overall; interestingly challenges around talent and regulation came out repeatedly, however diminishing Insurer capacity and an ageing workforce were also raised as areas that were giving challenges to growth.
We wanted to understand how widely these challenges were being experienced, so in a recent poll we asked Business Owners and Directors what they considered to be their greatest barrier to growth, as with our summit leaders the results were pretty convincing, with 56% of respondents citing a lack of quality talent as their greatest barrier. 26% said that regulation was posing the greatest challenge to them.
Although our wider network acknowledged that a declining Insurer capacity and an ageing workforce could be factors to challenge growth only 10% and 8% respectively of respondents felt they were their greatest barrier to their growth.
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Moving forward and knocking down some barriers….
Balancing technology and the human touch, the fight to get and retain talent, a regulator that could stifle growth, an ageing workforce and Insurer capacity that could go south….these are surely just bumps in the road? Demand remains significant and the sector is riding high on the back of digital transformation and innovation; so what can broking businesses do to overcome some of these barriers and seize the opportunities that exist to grow?
It seems that those businesses that invest time and budget on developing alternative value propositions, that have a brand that attracts the young, up and coming, tech savvy talent, that have a clear talent strategy, that focuses not only on attracting the right skills but also retaining them and that has the confidence and budget to embrace innovation and automation will be the businesses that win, to grow and move forward.
