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Essential Skills for Inclusive Leaders

Insurance

Why Create a Learning Culture?

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Why Create a Learning Culture?

Peter Drucker famously said, “Culture eats strategy for breakfast.” In other words, your strategy will go nowhere if your culture doesn’t support it.

I would take this a step further and say “culture IS strategy.” Any goal that you intend to reach will fail, unless your culture is aligned to that goal.

The Insurance Industry as an Example

If you work in the insurance industry, the purpose of your work is to keep a promise. Whether you work for a carrier, agency, brokerage or service provider, you play a part in fulfilling a past promise made to a policyholder.

Because of this, everything we do has to be aligned to long-term customer service. The best way to support our customers is to stay on top of, or even predict, what they need. We must then continually learn how we can better meet those needs.

Ultimately, insurance does two things:

  1. It makes all economic investment possible, and
  2. It helps people on their worst day.

If we are to maintain our promises in the future, we need to stay out in front of what’s coming. A learning culture can help us do that.

According to the Association for Talent Development, top performing organizations are five times more likely to have learning cultures, compared to lower performing organizations. It’s not hard to imagine that these companies are high performing because of their learning cultures.

The High Cost of Low Engagement

Across all industries, Gallup (“State of the American Workplace,” 2017) estimates that 34 percent of annual salaries lost to disengagement. When employees are disengaged, they are not as productive and not innovative. If employees don’t feel safe, they can’t contribute to their fullest.

Let’s think about what this could mean for a single Fortune 500 company. Consider, for example, a company that has 30,000 employees with an average salary of $56,000. This company spends $1.7 billion in annual salary, exclusive of benefits such as health insurance and 401(k) match. This fictitious company stands to lose $570 million each year due to disengagement!

That’s the impact on just one company. Now think about how much this costs the industry as a whole. The cost goes beyond lost dollars. It also includes the loss of any innovation could have happened with one-third of our staff. Think of the products and services that aren’t being created or implemented, or the number of customers who aren’t being served.

Such a loss is a tragedy for the industry, our economy, and the clients we serve.

Learning Cultures Build Engagement

Providing ongoing learning challenges is essential to employee engagement. Younger professionals, in fact, are motivated as much by learning opportunities as by other benefits.

Based purely on engagement savings, companies can see a tremendous return on a relatively low investment. When you further contemplate the “time value of potential” for these employees, the dividends are immense.

Learning Cultures Represent a Long-term Investment in Talent

It’s no secret that industry leaders are worried about a talent crisis, or talent cliff. Roughly half of our knowledge workers are on the verge of retirement. When they go, they will take institutional knowledge with them. The insurance industry is not alone in this. Other industries face similar challenges.

Folks coming in early- or mid-career have much to learn about the industry. To make matters worse, there are fewer newcomers. It’s easy to see the knowledge gap that looms.

Furthermore, if we are to retain new employees, we need to make sure we’re actively engaging them. How better to engage than in a learning environment where professionals can build skills, knowledge, and confidence in their roles?

Improved Customer Service

Finally, customer service improves significantly in a learning organization.

Bersin & Associates reports that companies with learning cultures are 34 percent better able to respond to customer needs and 58 percent more likely to meet future demand. The combination of these, remember, is the very promise of insurance: to be there for our customers when they need us most, at some undetermined point in the future.

What’s more, Bersin tells us these companies are 46 percent more likely to be first to market and 17 percent more likely to be a market share leader.

Creating a learning culture, then is critical to the top line, the bottom line, long-term growth, and customer satisfaction and retention.

Why would we not to create a learning culture?

 

Why Your Insurance Agency Should Be More Inclusive

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Typically, my articles speak generally to professionals in a variety of roles and industries. Today though, I want to address insurance agents directly.

Why Insurance Agents?

I spent more than a decade working in the insurance industry. Because of this, I appreciate the unique role insurance plays in our society. First, insurance makes all economic investment possible. No one would buy a home or start a new business without a way to manage or transfer that risk. Second, the industry is there for people on their worst day.

Insurance agents are on the front lines of the industry. Agents work to help protect the people in their communities. They help determine families’ and businesses’ coverage needs. Agents often serve as translators, putting complex jargon in lay terms. What’s more, they are typically the first responders when a crisis befalls an insured. For all these reasons and more, it’s important to me that every agency is ready to welcome and serve diverse clientele. No one should face life uninsured or underinsured.

Now, to the Topic at Hand

To understand why it pays to be intentionally inclusive in your insurance agency, we first need to explore the potential of reaching underserved markets in your community.

Before we continue, I’d like to point out that there are dozens of ways we can measure diversity. When discussing diversity, most people immediately think of demographic characteristics such as race, gender, and age.  These are certainly important factors in determining market segmentation. Because of this, most of the available data will focus on demographic traits. Future posts will also cover ways to make space for other differences. These include cultural and language differences, be mindful of different family structures, consider clients with disabilities, and so on.

For now, though, let’s look at some U.S. demographic data and consider the implications for your insurance agency.

The U.S. Population Is Changing

According to U.S. Census demographic data:

  • The birth rate is in decline in the United States. People are waiting longer to have children and are having few children than did past generations.
  • The rate of decline is highest for white, non-Hispanics
  • Hispanics of all races represent the fastest growing ethnicity in the United States

Consider these overall population trends and what signs of change you are seeing in your own community.

Is your insurance agency prepared to meet the needs of – and compete for the attention of – a more diverse client pool?

To explore this question, let’s look at some implications for both personal and small business lines.

Home Ownership Trends

A Brookings Institute report on the change in home ownership from 2001 to 2015 breaks down data by race and ethnicity.

We can see from this data that both homeowners and renters are following overall population trends, with fewer white homeowners and renters over a 14-year period, and an increasing number of Hispanic homeowners and renters.

Hispanic consumers, therefore, represent a growing market for agents selling homeowners’ and renters’ insurance.

When you further consider that more than 90 percent of new car buyers are also homeowners, you can see the cross-marketing potential of these consumers.

Business Ownership Trends

What about small business policies?

A growing number of small businesses can be attributed to minority and women owners. Nearly 1.5 million U.S. businesses are owned by racial and ethnic minorities, and more than one million U.S. businesses are owned by women — including Lead at Any Level®. Veterans account for 360,000 businesses in the United States, though that number shows moderate decline in the past three years.

Furthermore, the Small Business Administration reports that from 2007 to 2012, the percentage of Minority- and Hispanic-owned businesses rose within the small business landscape.

Taken in total, agents should realize that a growing percentage of small commercial policies will be purchased by women, Black, Asian, and Hispanic business owners.

Accurate data is not available on the number of businesses owned by LGBTQ individuals. However, the National LGBT Chamber of Commerce (NGLCC) has certified roughly 1,100 businesses — including Lead at Any Level® —  in this category. This number is expected to grow substantially as more corporate partners begin to expand their supplier diversity programs to recognize and include LGBT Business Enterprises.

The Small Business Administration’s website advises owners of small businesses to “Get business insurance” as a critical step in the business launch process. The SBA’s guide further advises business owners to “Find a reputable, licensed agent.”

New business owners will probably start with the agent they already know: the one who sold them their home and auto policies.

Insurance Agency Data

Relative to the overall U.S. population, licensed insurance professionals are disproportionately White, non-Hispanic, and male.

More than 80 percent of Insurance Agents are white, compared with just 73.6 percent of the general population. And while those numbers do roughly represent the demographic proportions of small business owners today, keep in mind that those percentages are changing rapidly.

Recall, however, that only about 67 percent of new homebuyers and 52 percent of renters are also white, non-Hispanic.

Based on my own research, most of us tend to do business with people who are already in our networks. And our networks tend to be very homogeneous, specifically, very much like us demographically.

This means that minority populations are likely underserved by our industry. Therefore, they may also be underinsured.

Gender Differences

To bring this into even sharper focus, consider that 65 percent of insurance agency principals and senior managers are men. (Source: Independent Insurance Agents & Brokers of America (Big “I”).  2018 Agency Universe Study Full Report.)

However, Forbes estimates that women drive between 70 and 80 percent of all household purchasing decisions.

In other words, if women (of all races and ethnicities) don’t feel welcome and comfortable in your insurance agency, you are likely losing a lot of business!

Summary: Invite Diversity into Your Insurance Agency

Considering the underrepresentation of women and minorities in insurance agency leadership, we can imagine how underserved – and underinsured – some members of our communities may be.

What can your insurance agency do to attract and welcome a more diverse customer base?

I’ll share my thoughts in future articles. In the meantime, I’d love to hear your ideas and questions.

Insurance Certification Options for Data Analytics

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Are you an insurance professional looking to boost your résumé with new credentials? Consider a new insurance certification in data analytics.

Why Data Analytics?

You’ve probably heard a lot lately about big data, predictive modeling, machine learning, and artificial intelligence. These concepts are all possible because of the enormous amounts of data being produced every day. The data come from consumers’ browser history, smart devices, and data in the public domain.

At the same time, computing power has continued to scale at an astonishing rate. New hardware, software, and cloud computing technologies are evolving rapidly.

As a result, a new discipline has emerged: data science.  Jobs that didn’t exist five years ago are now changing the business of insurance. You won’t want to be behind the curve on these new concepts. Now is the time to start learning about insurance data analytics!

The Institutes’ new AIDA insurance certification

The Institutes offers an introductory-level Associate in Insurance Data Analytics (AIDA) designation.  This program provides an overview of statistical concepts, loss triangles, and other fundamentals.

The courses are:

  1. Big Data Analytics for Risk and Insurance
  2. Risk and Insurance Analysis Techniques

Recently, I earned the AIDA designation from The Institutes. I found it valuable in understanding the work of the data science, actuarial, and modeling teams I support. One of those data scientists is now pursuing this designation as well. She believes it will help her tie her analytics experience to the work she is expected to do within the insurance industry.

Insurance Data Management Association (IDMA)’s insurance certifications

The Insurance Data Management Association (IDMA) offers an introductory course and two levels of certification for insurance professionals.

IDMA offers a standalone introductory course, Data Management for Insurance Professionals. This course offers an overview of the data issues insurance companies face. The course is an inexpensive, low-commitment option to help you get started. It does not, however, apply as credit toward the certification program.

If you want to learn more — and add an insurance certification to your résumé — consider their four-course designation path. The courses are:

  1. Insurance Data Collection and Reporting
  2. Insurance Data Quality
  3. Systems Development and Project Management (waived if you have the Associate in Technology (AIT) designation from The Institutes)
  4. Data Management, Administration, and Warehousing

Students can earn the Associate Insurance Data Manager (AIDM) designation with no prior coursework. The Certified Insurance Data Manager (CIDM) designation is available for students who have completed additional coursework from other institutions.

I recently completed the CIDM certification. Thanks to the AIT waiver, I only needed to complete two more courses to add CIDM to my credential list. Full disclosure: I did fail one of the exams on the first try. Nobody’s perfect!

New insurance certification options from Casualty Actuarial Society (CAS)

Finally, Casualty Actuarial Society (CAS) now offers a Certified Specialist in Predictive Analytics (CSPA) designation and will soon launch a Catastrophe Modeling certification.

While I listed them here, I’ve not yet explored these insurance certification options personally. My colleagues in the actuarial discipline, however, were very interested in learning more.

Additional Reading on Data Analytics

If you don’t want to commit to a certification, consider picking up one of these books to learn more. In particular, I recommend Predictive Analytics by Eric Siegel.