The Stressed out CIO: Merely Survive or Thrive in the Age of Digitisation?

“We have begun the process of digitisation and there will be more to come with AI, robotics and big data. These developments and overarching societal shifts offer us a once-in-a generation opportunity to reinvent our marketplace. This report is a call to action to take charge of how our organisations acquire the skills we need to face the future.”

Matthew Wilson, Group Chief Executive Officer, Brit Insurance, Sponsor of LMG Talent Strategic Initiative

Wilson’s words are the opening remarks in a new report The future of skills in the London market, which sets out a London Market Group vision and steps to learning new skills and ways of working in today’s digitized world.

According to the report these steps should reduce our cost base by removing re-keying and other administrative tasks. Staff at every level in underwriting and broking businesses will be thinking about the impact of this on what they do every day.
The skills gap is wide, and it is not just about technology. The authors of the report explain that it covers collaboration, innovation, communication and risk partnering.

Insurance carriers, brokers and their IT departments need to be proactive in training the people they already have and ensuring that their roles evolve to meet industry needs. Whether you work as an underwriter or IT leader you need to take control of your professional development. We also need to look at new talent that might come from outside our traditional hunting-grounds.

The Stressed Out CIO

The fast-paced environment that insurers and IT professionals work in is increasingly highly pressured and stressful, however, and that will only increase if the prospect of market disruption from within or without leads to wholesale transformation or redundancy.

According to the KPMG report, the selected actions for organisations are:

1. Plan for skills: build, borrow and buy
Organisations should proactively look at their current skills gaps and what that gap will look like in five years’ time, and make plans to address the gap by building, borrowing, or buying ‘hot skills’ as required.
2. Re-design for the digital age
Organisations should shift away from command-and-control structures towards more agile, networked organisations. This will break down barriers, enable better collaboration, and allow quicker adaptation to changing Market demand.
3. Create an agile culture
Organisations should understand why their current culture is, or is not, attractive
to talent. They should build an agile culture in which testing and learning are encouraged. This can mean flexible working, varied career structures, and the ability to commence a project without a restrictive approval process.

One suggested action for senior leaders is to Understand and embrace the opportunities offered by technology.
The report says that senior leaders should communicate the importance
of technology and then act on
it. The focus groups identified that talent is engaged when they see words promptly 
turned into action. Leaders cannot promote the merits of new technology without then making appropriate investment choices and committing tangible resources to ward off or profit from the forces of disruption.

Age of Disruption

As the report states: “Advances in technology are a driver of, and response to, much of this disruption. In light of this, research participants were asked to name the technologies they thought most likely to impact the Market in the future. Those shown below were consistently identified, with a fairly even split of votes between them. Notably, some of these technologies are already starting to take hold:

• Electronic Placement
• Big Data
• Artificial Intelligence
• Straight Through Processing
• Robotic Process Automation

Electronic Placement, for example, is a key aspect of the LMG’s programme to make London an easier place to do business.
The report concludes that there is a range of business models that Market players will start to apply to differentiate and increase their chances of success in responding to these opportunities. Some will focus on innovating the core model of traditional insurers or brokers, e.g. by creating a Virtual Risk Advisor, Dynamic Personalised Insurance, or a Portfolio Manager. Others may focus on creating platforms or marketplaces, e.g. a stock exchange for risk or a data utility.

The authors conclude:

“Whichever of these models (or combination of models) ends up as a dominant feature of the London Market, it is clear that the status quo will change. One area certain to be influenced is the future skills requirements of brokers, underwriters, and senior leaders. As new models emerge, Market players will have to evolve their recruitment and talent management strategies, as well as their cultures, to remain relevant.”

Less Stress, More Flexibility, Less Risk

As I explained in a recent article for Insurance Day with the increased use of machine learning (ML) and Artificial Intelligence (AI), knowledge worker type roles such as those of insurance professionals are increasingly in reach of machines.
Having worked with CIOs and IT leaders of companies all sizes over the last 10 years I can tell you that they all want Less Stress, More Flexibility and Less Risk. Some want all three, but they all want at least one.

Fifth Step’s knowledge and people resource is designed to reduce that stress, provide more flexibility over FTE recruitment, interim and contractor alternatives. We can help IT leaders to de-risk because our experience can help to mitigate CIO’s exposures to people from non-traditional insurance classes who look good on paper - but in reality are not culturally attuned to the special London market we work in.

When making hiring decisions, particularly for roles that either can or will be able to performed by machines in the next few years, firms should hire purple people. These are people who have a combination of business (blue) skills and technical (red) skills. Purple people with their multi-disciplinary skills tend to be more adaptable and will help organisations find their natural human and technology.

Flexibility, taking the stress out of IT and reducing risk are the three pillars of our business. Fifth Step are experts in operational transformation, specialist IT recruitment, data management and insurance innovation delivery services in the insurance sector. If you would like to discuss our approach to business transformation, why not get in touch by email Darren.wray@fifthstep