The insurance industry is in the grips of a fierce war for talent – one not limited to any single corner of the market as claims, underwriting, broking and pricing teams alike all look to attract, integrate and retain skilled talent.
Pricing teams are under significant pressure, noted Hannah Swain (pictured), head of UK personal lines pricing, insurance consulting and technology at WTW. Pricing practitioners are in very high demand due to their ability to leverage analytics to drive innovation and competitive advantage. “It’s a time in the market when many are growing their pricing teams,” she said. “There’s a lot of focus on pricing, and the supply is just not keeping up with the demand, especially in personal lines.”
Pricing practitioners are valuable assets for insurance companies, Swain said, but they often prove quite hard to retain. That’s for several reasons, including that these tend to be very analytical, curious-minded people who prefer stimulating, fast-changing work. “I also think they’re quite easily frustrated by inefficient processes, or tools that aren't up to date – anything that prevents them from doing what really interests them, which is pricing analytics and solving interesting problems with interesting tools and techniques.”
At a high-level view, the mix of pricing talent has evolved over the last five-to-10 years, she said, and that’s particularly evident in personal lines where you get a lot more data and a lot more analytical work. That area of the market is now seeing more of a mix of traditional pricing actuaries and data scientists, and there has been a variance in the success seen in how companies have combined those two skill sets within their pricing functions. Some have done this exceptionally well while others are still struggling to find the right balance.
Swain highlighted that finding the right way to blend and utilise the diverse skills of pricing teams today is one of the top challenges. “You need to be able to utilise the skills, innovations and mindsets that data scientists bring to the team, but you also need to recognise the value of deep subject matter expertise that experienced pricing practitioners bring.
“There’s no point building an amazing model if you’re answering the wrong question. Then, conversely, there’s no point in spending a week trying to solve a problem which you could do in an hour with the right set of skills. It’s about thinking how you can merge those two together properly.”
Part of this centres on accepting that there’s a multi-generational aspect at play here, she said, highlighting that, perhaps for the first time, there are three different generations of pricing talent in the market. There are those highly experienced pricing practitioners who lived and worked through previous volatile market conditions with a very different set of tools. Then there’s the next generation who cut their teeth in the post-aggregator pricing landscape where there was a proliferation of available data.
Finally, there’s the newer generation who have been trained with a much heavier focus on more recent analytic capabilities and data science skills. “Merging and using all these skills at once is very hard but also very important, especially when you’ve had the volatile market conditions we’ve seen in the last few years,” she said. “For me, the golden question is how you get all this talent to work together resulting in something stronger than the sum of its parts.
“The first piece in retaining this talent is making the work interesting. That’s not just for the data scientists, that’s for everybody in pricing. This is an analytical part of the industry and it attracts people who like problem-solving so we need to give them the space to innovate and do just that. We can’t expect these skilled people just to be ‘turning the handle’ anymore.”
Another key element is about removing frustrations from this talent, because equipping them with the right tools and support is a really powerful motivator. People don’t want to work with unwieldy or outdated legacy systems, and they don’t want to be slowed down by implementation processes. If they’re doing something that’s innovative and interesting, they want to see that implemented and see its impact on the business as fast as possible. Because that’s how they see the value they’re adding.
“In general, I think the insurance market in the UK has not been as fast at keeping up with these new technologies as other industries, so that’s one of the areas everybody needs to be working on,” Swain said. “When it comes to feeling like you’re adding value, everybody needs to be given the opportunity to see the value they’re adding with their particular skill set.
“Insurers also need to provide opportunities for learning and development, and opportunities to see innovations through to implementation. That means coaching and mentoring for the younger generation, and also recognising the different value that different generations can bring to the team. All of that brings job satisfaction which ultimately is the key to talent retention. And of course the industry needs to be competitive on salaries.”
