By Cyril Tuohy
Never mind the coming shortage of financial advisors. Deep within the bowels of insurance carriers' information technology departments, a growing skills gap is contributing to the industry being information rich but knowledge poor.
New research published by Deloitte shows that as many as one out of four operations staff at insurance carriers is expected to retire within the next five years.
In the short term, carriers can resort to stopgap measures by outside consultants and technical talent, but long-term answers may come from where the industry traditionally would not have thought to look: retail.
This latest analysis of challenges in talent trends comes from a new report titled “Information Rich, Knowledge Poor: Overcoming Insurers’ Data Conundrum,” released earlier this year by Deloitte.
Arun Prasad, principal at Deloitte and one of the report’s subject matter specialists, told InsuranceNewsNet that the retail and health care industries offer the insurance industry answers in how to better market itself.
These industries approach analytics and data management through a very different lens “than we do in financial services,” Prasad said.
That doesn’t mean armies of Best Buy or Sears floor sales representatives are going to come knocking. It does means that insurers may start buttressing their ranks with analysts accustomed to parsing through huge datasets about customer habits.
Industry experts say insurance carriers, which formerly compared themselves with other insurers, are now up against far more sophisticated competition.
Two years ago, MetLife began offering prepaid life policies through Wal-Mart stores as part of a pilot project. Industry commentators have suggested that it wouldn’t be difficult for online retailers like Amazon to sell insurance as well. That’s serious competition for traditional insurance carriers, who are relative technology laggards.
The good news is that insurers who are serious about overhauling their IT infrastructure to keep up with the fast-changing demands of the marketplace have plenty of retail analytics talent from which to hire.
Prasad said regulators are pushing insurance carriers to be more transparent about how they use market data, and that will put more pressure on carriers to upgrade their IT infrastructures.
“They want more completeness and auditability of your data from source to decision, to understand that you have an approach that is not only repeatable but auditable,” Prasad said.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
© Entire contents copyright 2014 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.