Into the future: Mckinsey outlines roles to shape insurance industry by 2030

By Zainab Iwayemi

Technological development has increasingly impacted the economy, making it easier for businesses and individuals to step up their games. This has led to the elimination of certain out-of-date roles, as well as the creation of new ones that enhance the building of skills that facilitate keeping up with the pace of Digital Revolution.

Digital Revolution, as a twenty first-century tool for business growth has gradually taken hold in the insurance industry and is especially triggered by the compulsion of lockdown aimed at containing the Coronavirus, which forced many insurance companies into digitizing insurance products; a trend which is expected to continue into the next decade.

A report by McKinsey, the global strategy and advisory consultancy, estimates that by 2030 more than half of the current claims activities could be replaced by automation reflected in some existing roles being eliminated, new digital roles being created, and people in remaining roles needing to handle new responsibilities and build new skills as claims organisations will need to prioritize the development of a talent strategy to keep up with the digital revolution.

According to the report, the evolutionary and innovative role will help shape the insurance industry with regards to future role. It explained that while evolutionary roles already exist in claims and will be greatly improved by integrating new technology, the innovative roles are fresh and would help organisations explore fresh ways to protect the insured, and support the technology-driven future.

The evolutionary role has to do with the role of the claims handler diverging into the simple and complex claims. The simple claims will be handled in a streamlined and automated manner, and complex claims, such as injury claims and those involving litigation, will be augmented with analytics and decision-making tools that can ingest and synthesize medical records to provide critical information to complex-claims handlers and enabling them to make more accurate decisions and close even the most difficult claims, with increasing speed and accuracy, as it requires human judgment. Similarly, the claims-quality assessor role will also adapt to include the assessment of technology and handler decision making.

On the other hand, the innovation outlines two focus areas namely; the claims technology-product owner and the claims-prevention specialist. While the claim technology-product owner infuses technology and data science into the claims process as automation evolves from process-centric automation to artificial intelligence that eventually replaces judgment-based work by designing, implementing, and maintaining algorithms using their robust knowledge of claims patterns and causes of loss, the claims-prevention specialist will benefit from telematics and precision analytics to help identify high-risk customer scenarios by conducting targeted and personalized outreach to mitigate the risks whilst also cementing the link between underwriting and claims, providing additional input on incorporating policy risk into the pricing model.

What Insurers should do

In preparation for the growth future-ready talent, insurance companies need to equip themselves with skills in a critical area, like technical knowledge. To achieve this, McKinsey put forward the need to put in place, three actions in preparing the existing workforce.

First, is the need to access current skills through; conducting self-assessments; employing document extraction, and collecting external data. On the micro-level, leaders are uncovering hidden talent, achieving a greater impact through personalised development and building more effective teams by staffing team members with complementary skills.

Secondly, there is need to activate on-the-job learning to build needed skills, in addition to traditional methods, and create structures to help deploy employees into roles with higher demand that require skills of the future —particularly digital skills.

Lastly, the need to launch a nimble reskilling and up-skilling programme that would help develop these skills while also effect deep changes in behaviour. Companies can also use reward mechanisms, such as skill certificates or badges, to mirror the recognition given to employees for more easily observed technical skills, such as digital fluency or data tagging.

Nigeria has joined the rest of the world in the direction towards digital advancement in the insurance space. In the view of Ekerete Gam-Ikon, a consultant in management, strategy, and insurance, the Nigerian insurance industry is well prepared for an insuretech revolution as the regulatory bodies have announced plans to set up regulatory sandbox come 2021.

“Nigeria, by the comparative report of the feats achieved by Nigerians in-country and abroad in the area of digital technology and fintech, has what it takes to deliver. What is required especially in the insurance industry in Nigeria is the will and courage of insurance industry leaders to let these techies help the industry. Once the environment is opened and poised towards promoting insurance, you will see the impact of the Insurtech start-ups waiting to excel.

“NAICOM had announced the setting up of the Regulatory Sandbox, so we need the guidelines to be out early next year while the NIA and NCRIB, as well as other insurance institutions, need to have specific units or committees addressing the adoption of tested solutions,” he said.