There is a great long piece at Carrier Management on how two of the most pressing challenges on insurance are related. Those two challenges are the ubiquitous, dreaded legacy systems (i.e. old technology) and the lack of young talented people entering the industry. The following quote from Michael LaRocco, CEO of State Auto Insurance Companies, sums it up perfectly, and vividly:
The reality of our crappy technology and our old legacy systems and the old way we do business is part of that problem. It’s not going to be attractive for someone to come to a company and work on a green screen. That’s not going to do it for them.
When stated so well, it’s obvious. Insurance has historically struggled with technological innovation, and that struggle has made aging demographics a problem. The essay goes deeper into that crux, but really, these two sentences are all they needed to publish – it’s a proper money quote, and impossible to disagree with.
The essay explores how some insurers and technology companies are trying to break the cycle and get exciting for younger people looking for a career. The promising and obvious way to deal with this double-whammy is to invest in new technology, regardless of how tough it will be. That approach is summed up by Leigh Ann Pusey, president of the American Insurance Association:
An astronomical amount of money is being spent on InsurTech by really smart people that are looking at our industry and saying this is a good opportunity to do something different and transform it.
However, a more dubious approach is outlined by Mr. LaRocco:
People may laugh, but maybe you do start defining yourself as a technology company whose product is insurance, or as an InsurTech company whose critical importance is protecting lives, homes and autos in a hi-tech manner.
No – this problem will not be overcome with labels and false marketing. Insurance should proudly embrace its identity – it does not need to rebrand itself like this to be successful with young talent. For proof, check out Insurance Nerds.
After all, “the obstacles are guts and the people,” said Mr. LaRocco with a second money quote. The twin problems of legacy systems and a lack of young talent will be overcome by bold Insurers leading and investing in new ways to do things that will attract talent. In other words – lose the crappy technology.