Insurers in general, and claims departments in particular, need to change the way they think about recruiting and retaining talent to avoid suffering from the effects of a brain drain plaguing the industry, with the recession offering opportunities to land highly qualified and experienced individuals stranded in a tough job market.
Beyond individual company recruitment, training and development programs, some experts point to the need for concerted industrywide efforts to devise ways to make claims a more attractive field for current and new talent.
The issue for claims departments is twofold, according to Kevin Quinley, a claims consultant and trainer based in Washington, D.C.
First, he said, insurers are seeing an exodus of seasoned claims talent. He explained this could be due to many professionals approaching retirement age, or because claims personnel are burned out from working in a field they may perceive as lacking in high compensation and recognition.
“There is a sense that claims is the orphaned stepchild of the insurance industry–the Rodney Dangerfield of the insurance industry: They don’t get no respect,” Mr. Quinley said.
Job cuts and layoffs could play a role in the exodus of experienced talent as well, Mr. Quinley noted, as employees of greater tenure and longevity tend to be higher fixed costs for companies.
Added to the problem of a talent exodus, the industry is experiencing trouble recruiting successors who can replace the expertise and the judgment that is walking out the door, according to Mr. Quinley.
With claims not enjoying the best pay and prestige, he said new employees are more likely to choose other fields within insurance.
But the challenge in bringing in talent may run deeper than compensation and the perception of claims, and might include shifting demographics in general, according to Douglas Thomas, managing director of compensation and benefits for SMART, a Devon, Pa.-based business advisory and consulting firm, who said the problem extends beyond claims–and even insurance.
The issue, he said, is that over the last several years a demographics shift has led to an overall shrinking workforce. Companies in general, he argues, have failed to adapt to this changing environment.
In particular, Mr. Thomas said insurers looking to recruit for claims departments need to change the way they think about “total rewards”–noting that historically, that involves strict compensation and benefit programs. Today, that is not enough to recruit and retain new talent, he contends.
Insurers, he suggested, need to focus on targeted training and development, performance management, and succession planning. Companies must demonstrate they have appropriate development programs in place, and that their systems help employees along their career paths.
This, he added, needs to be demonstrated not just externally to those a carrier is trying to hire but also internally to current employees the company is trying to keep.
Showing that a potential employee has a meaningful career path that is clearly defined will help drive interest among new and current workers, Mr. Thomas added.
“To have any shot at all at keeping your best people and trying to attract people…it’s a matter of redefining total rewards and ensuring [insurers] have these programs in place, that they take them seriously, and it’s communicated,” said Mr. Thomas.
Industry professionals who spoke with National Underwriter also mentioned proper training and education programs as a key to attracting and keeping talent.
Melanie Elias, director of claims at Farmington Hills, Mich.-based wholesaler Burns & Wilcox, said colleges are now offering courses in claims for degrees with insurance specialization. She said one association she belongs to supports insurance education at Olivet College, for example.
Burns & Wilcox also works with other universities to develop internship programs, according to Ms. Elias. She noted that once an intern is aboard, they go through education and training, and are rotated through various departments to see how the whole insurance operation works–including claims.
Rod Rupp, executive vice president of Lansing, Mich.-based Auto-Owners Insurance Group, said education and training needs compete for a company’s resources, which some may see as a deterrent. But he also emphasized that making a commitment in these areas is one of the most important steps a company can take to recruit and retain top talent.
Auto-Owners has a training program for new associates, Mr. Rupp noted, but as workers handle more complicated claims, he said they receive ongoing training so they never feel like they are in over their heads. Employees who have been with the company for years are still attending training programs, he said.
George Fay, executive vice president of worldwide claims at Chicago-based CNA, agreed that education and training should be a continuous process. While CNA offers training for workers with no prior insurance experience, the company also has ongoing training programs, including technical courses for every line of coverage, he noted.
Additionally, Mr. Fay said the company has a certification program that the entire staff must complete covering the claims-handling process beyond just the basics. The program can be somewhat intimidating for some new employees, he said, but added that it helps ensure the level of knowledge within the company remains high, and also challenges workers.
Mr. Fay said it is important for leaders to challenge employees to keep them interested and involved, as the worst thing a company can do for retention is bore its workers. He said employees should feel committed to their work every day, just as if they were their first day on the job.
Effective communication is another key for claims recruiting and retention, according to Ms. Elias. She said the message of what is involved in the job needs to get out. Young people could start working in claims, she explained, and if they are not kept engaged, they will leave or burn out.
“Claims is physically and mentally exhausting,” Ms. Elias said. “You have to keep fresh through education and training.”
Mr. Fay also emphasized the importance of effectively communicating responsibilities, noting that some new workers come on board believing insurance is the right career, only to have second thoughts later on. He said CNA is trying to improve its interview process so potential workers understand better the responsibilities associated with working in claims.
The challenging aspect of claims can be a selling point for new talent, according to Mr. Quinley. “Claims is a fascinating field that allows you to learn a tremendous amount,” he said, “and you need not ever stop learning.”
He added that claims can be a difficult field, as you are generally dealing with people experiencing stressful situations. He said claims professionals also have to say no sometimes, and essentially be perceived as the “bad guy.”
But claims can be rewarding as well, as professionals in this field deliver on insurance company promises and help people recover from personal and property losses, Mr. Quinley pointed out.
Claims also encompasses a range of skill sets in a variety of fields including the law, medicine, construction, negotiating, interpersonal relations and organizational challenges, Mr. Quinley noted. “Like snowflakes, no one claim is the same as another,” he added.
Mr. Fay agreed, and said his company uses the diversity of claims to recruit new talent from fields other than insurance. Those who have worked in construction, for example, tend to be great property adjusters. Special investigators may be recruited from among individuals with a background in law enforcement, or military investigators.
Promoting and selling the claims experience consistently at job fairs, special events and other such gatherings–particularly in a tough job market like this one–can help claims compete for talent that is now either going to other areas of insurance or other areas of financial services altogether, Mr. Quinley noted.
But aside from pushing the mental rewards of working in claims, compensation structures should also be altered so that claims is on par with underwriting and marketing, according to Mr. Quinley. “Intellectual stimulation will not pay your rent, or your mortgage, or you car payment,” he noted.
Companies that make a commitment to technology could also find it easier to recruit new talent–particularly younger workers, those queried for this article noted.
Young people have grown up around technology, Ms. Elias said, and so a state-of-the-art tech platform can be an asset in areas including training programs. She mentioned training courses taken from home on telephone etiquette, business writing and other basic business skills as examples of tech solutions that attract younger workers.
Companies that have invested in technology to the point where staff can work remotely–either outside of the office or from home–could be attractive for employees of all ages who are seeking flexibility, Mr. Quinley pointed out.
Speaking to the impact of the struggling economy on hiring new talent, Mr. Quinley said it’s a “double-edged sword.”
While the poor job market in general means there might be more talent available, the economic pressures mean many companies are not hiring at the moment.
Bigger concerns than bringing on new talent right now, he added, are surviving and minimizing expense ratios. Mr. Quinley said it is a tough sell for companies to invest in developing existing talent, let along to recruit new workers for the long term, in the currently challenging environment.
SMART’s Mr. Thomas said the changing economic environment may cause new workers to look at job opportunities in insurance differently than they have in the past. Individuals who thought exclusive premier positions in financial services were in areas such as investment banking could reconsider as the financial services sectors go through transformations.
He said it is difficult to see how industries and perceptions will turn out, but the consistency and longevity of career paths associated with the insurance industry may prompt new workers to look at these types of jobs in a different light.
In general, industrywide solutions to talent and retention problems in claims seem to be lacking, even if some individual companies are finding ways to succeed in this area. Mr. Quinley said some companies are actively recruiting new workers into claims careers, either through compensation inducements or publicizing the intrinsic rewards of working in claims–but overall, the problem pesists.
He criticized the lack of a concerted or coherent effort to address the problem, noting there is “a lot of hand-wringing,” but few industry efforts to solve it.
Spot vacancies, he said, are being filled with lateral hires, if at all. And while the full force of the talent exodus has yet to be felt, he said “the tab will come due at some point, when companies learn their seasoned people are gone.”
As for individual company efforts, Mr. Rupp said Auto-Owners plans in advance for how many openings will be available over the next year and beyond. Additionally, he said recruiting is seen as a responsibility for everyone within the company. Claims managers, he noted, will recruit not only for claims but also for underwriting or accounting.
Attitude also matters, he said. While claims may have a negative perception in general, Mr. Rupp said it is perceived positively at Auto-Owners because the personnel within the company speak positively, energetically and enthusiastically about it to recruits.
He added that much of recruiting and retention also depends on how a company treats its people. Companies that offer fair pay and benefits while providing more opportunities will see better retention.
As for recruiting, Mr. Rupp said the insurance industry in general has to get over an “inferiority complex” when it comes to competing with other financial services sectors, adding that insurers should try harder to sell the industry to new talent.
The insurance industry, he said, has nothing to be ashamed of, and should not have trouble competing for jobs.
Mr. Fay said if an organization is seen as a leader in the industry, as well as a fun, challenging place to work, recruiting will not be a significant problem.
Aside from recruiting, CNA’s Mr. Fay said retaining skilled, retirement-eligible workers could also stem the talent exodus. He said CNA tries to encourage talented workers to stay, and does not accept automatically that people will retire at a given age. Keeping experience, he said, is important.
Mr. Rupp agreed, noting that a company cannot have too many people on staff with no experience. Auto-Owners, he said, is more than happy to consider a recent college graduate but also workers with a significant amount of experience.