Declining talent pipeline

Working in claims is never easy. Pressure on loss-ratios, customer care, lifecycle and increasing customer expectations (rightly so) challenge the modern-day claims handler. But does this claims handler have the full suite of tools and coping mechanisms available to not only do right by the customer but also protect their own well being in the process? Many insurers are finding these challenges are landing at a time when claims experience, and longevity in claims, is in some parts of the market seeing a sharp decline. As claims experience and handling is becoming more challenging, the double whammy of declining experience is now seeing recruitment challenges for insurers, at a time when customer outcomes have trended to a place not seen before.

There are many causes of this. The working-from-home vogue that has ballooned since the pandemic now sees new, often young, and inexperienced personnel entering the claims market and spending most of their working day sat at home in a bedroom or mum and dad’s living room. Gone are the days when a handler would be in and amongst seasoned claims staff, sublimely learning from those around them as conversations with customers, managers and brokers were quietly pushing knowledge into the new claims recruits. So where do new claims handlers get their experience? Where do they go when they have a difficult or traumatic experience but are home alone? Where is their support network and function? Many a time the 18-year-old me in technical home claims would come unstuck on a difficult call for a PI or liability claim only to be thankfully rescued by a colleague sat next to me who heard my struggle and took over the call. What happens now through a laptop softphone when this point of stress hits the new claims handler? It is this environment, which is slowly, but surely, chipping away at the experience many veteran readers may relate to and, in some cases, seeing the pressure become all too much and would-be talent drift off to other industries seen as less frictional and easier to cope with. This must be reversed or a ticking time bomb awaits the senior claims managers of the future.

The industry also needs to consider whether a gear shift is needed with how talent is attracted. The consumer of today is different to the consumer of yesterday. Our sector is now considered part of the service industry by consumers. Expectations are higher, demands are often made, and errors or mistakes can be costly for insurers in an environment where complaints are a part and parcel of claims handling. The angry or even hostile consumer, whether wrong or not, can be a very lonely place for a claims handler and insurers are challenged by whether new entrants to the claims sector want to work in an environment where that can be levels of consumer hostility not witnessed previously.

Qualification frameworks also play a significant role in attracting and retaining talent. Are insurers promoting pathways to qualifications via the CII like they once were? With universities this summer having been unable to fill places, the talent pool of bright young things ripe for a career in financial services and specifically claims should be vibrant, and yet swathes of youngsters with their a-level results slips still hot off the printer in their hands seem to elude the claims market.

The rise of consultancy and international opportunities has seen a growing number of experienced claims practitioners delve into other claims markets, enabled by technology and communication advancements in recent years. This declining pool of experienced claims professionals is not being matched by new entrants last 5 or 10 years in our industry.

With so many challenges attracting and maintaining claims talent pools, insurers and perhaps loss adjusting partners are facing a bleak outlook in 10-15 years if talent pipelines remain as sterile as the market is currently seeing.

So where are the opportunities to reverse this worrying trend? It starts with the recruitment process. Do insurers push enough time and investment into academies to get new talent ‘sticky’ through CII led qualification frameworks with clawbacks to retain the talent as they learn? Onboarding is often cited as a major factor in retention for young people – is this wowing the Gen Zs that will want and be attracted to what is funky and connected? Recruitment and onboarding in today’s claims market must focus on what is in it for the candidate, not what the candidate can do for the industry (that will come, a few years down the line). With so much opportunity outside of the financial services market, creating a place that is fun, interesting, and where one can make a difference to the consumer, to the environment and therefore to themselves is critical.

Assurance that AI and technology will not dissolve claims handling roles is also vital. Yes, AI can deal with low/one touch claims, but mid value and complex claims will always need the claims professional to ponder on an outcome or decision – that is where our new recruit must feel they are headed in 5-10 years’ time.

Many organisations lose claims professionals to other departments in their first 5 years, whether that is change, risk, IT, HR or underwriting. Considered less frictional and, frankly, not as hard in terms of the psychological impact to mental health, claims departments must cultivate a culture of inclusivity, opportunity, change, managerial or technical progression pathways and be the place all staff want to navigate to, and not away from, if the steep rise in declining experience is to be reversed.

 

William Quibell ACII, Claims Community Board Member and Head of Claims at Ageas Insurance