LAS VEGAS — May 14, 2008 — The insurance industry is at a crossroads. As baby boomers retire, insurance companies are in desperate need to recruit a new generation of employees from the estimated 80 million “millennials” nationwide soon to enter the workforce. At the same time, firms need to develop different ways of marketing to “Gen Yers” as consumers. At the 2008 ACORD LOMA Insurance Systems Forum in Las Vegas, May 13–15, the largest insurance show of its kind, Microsoft and partner Insurity will release new research that demonstrates how technology could be the key toward solving these growing industry challenges. PressPass spoke with Bill Hartnett, Director for the U.S. Insurance Industry at Microsoft, and Rob Salkowitz, writer and consultant author of the first book in Microsoft Executive Leadership Series, to learn more.
PressPass: What are the biggest challenges facing the insurance industry today?
Hartnett: Right now, the average insurance sales agent is 47, and nearly 60 percent of these workers are over the age of 45. The looming retirement of these workers and the need to attract new employees is a major challenge the industry is facing. In order to stay competitive and attract new employees, insurance firms must differentiate with unique channels (mobile, Web, etc.), new products and ultimately the promise of better service.
Salkowitz: Millennials have been inundated by digital technology since birth. When they come to work, their expectations are shaped by their experiences as students and consumers, and access to social computing technology is a big part of that. Insurance companies need to factor in those expectations when trying to recruit, retain and motivate young workers.
Hartnett: To that point, at the ACORD LOMA conference, we will be releasing the findings of a new study – the Insurity. Microsoft “Millennials in Insurance Survey 2008” – on how the millennial generation (those born 1981-2000) views the insurance industry. The results showed that young adults who are now entering the workforce view the insurance industry as “old” and out-of-date when it comes to providing their employees with new technologies and solutions. Alternatively, 91 percent of Millennials stated that being able to work with “newer, innovative technologies” in the workplace would make them more likely to consider a potential job opportunity.
PressPass: What kinds of tools are millennials looking for potential employers to offer?
Salkowitz: Technology that supports collaboration is not optional. Young workers expect this, and if an employer is lacking this capability, they’ll bring in insecure consumer-grade applications with all the attendant business risks, or vote with their feet and seek a job elsewhere where they feel they can have an impact and an outlet for their creativity and desire to contribute. Millennials don’t make the traditional distinction between work and personal life. There’s a blurring of the boundaries. If something isn’t quite to their liking at work, studies show they’re prepared to develop their own workaround using their own consumer technology.
Hartnett: Yet insurance is an industry still struggling with ‘green screens’ on desks and legacy mainframes in the back office. Our study found that millennials reported using a wide variety of technology tools in their day-to-day lives, including social networking sites (77 percent), instant messaging (71 percent), Wikis (59 percent) and more. Nearly a third subscribed to more than one social networking site; 64 percent frequented them daily; and 17 percent reported spending 30 minutes to an hour each visit. Because of this proclivity to use technology in their personal lives, millennials surveyed had expectations of their employers providing similar technologies for their use in the workplace. They are interested in company-provided PCs, mobile/smart phones, internal company instant messenger, access to social networking sites, company intranet/portal and company-provided virtual meetings.
PressPass: As the baby boomer generation heads towards retirement, is recruitment the main problem insurance firms are facing?
Salkowitz: Certainly not. The millennials represent a new breed of consumers as well. They’re far more inclined to view technology as an inclusive tool for social networking and reaching out to communicate and collaborate. Millennials are quickly becoming the targeted customers for insurance firms and they are interested in interacting with their providers through new and innovative channels. In fact, the majority want to interact with their carriers via personal web portals, live online chats and blogs.
Hartnett: As with recruitment, we think technology can play a constructive role in addressing this issue. Microsoft products and solutions, Microsoft Office SharePoint Server, Office Communicator, Windows Mobile, Windows Live and more, are great solutions to help insurance firms better communicate with this new breed of insurance consumer.
PressPass: You mentioned that as customers, millennials want more interaction with their insurance firms. What can insurance firms do to reach their customers more effectively?
Salkowitz: As more millennials enter the workforce and purchase other insurance offerings, companies will need to adjust to better communicate and connect with younger consumers. In fact, when asked what technologies companies should adopt to better serve customers, a large percentage of millennials surveyed ranked the following as “important”:
Personal web portals with full view of their accounts (86 percent)
Web-based support (89 percent)
Automated phone responses (69 percent)
Live online chats with agents (76 percent)
Instant messaging with agents (67 percent)
Company blog to post concerns and questions (69 percent)
Mobile alerts (59 percent)
Hartnett: Insurance prices are being driven down by tough competition, but the price of competition is rising, with the top insurers spending around US $500 million a year to keep their names in front of potential customers. Technology can be a cost-effective way of communicating with millennial consumers, either by allowing open dialogue via company blogs or advertising on social networking sites. In fact, by not providing this optimal experience, insurance companies run the risk of millennials using technology to criticize companies and brands. In fact, a combined 48 percent of millennials would “frequently” or “occasionally” blog in chat rooms or social networking sites if they encountered a poor customer experience with their carriers.
PressPass: How does Microsoft’s concept of software to enable the People-Ready Business mesh with the emerging needs of millennials in insurance?
Hartnett: A People-Ready Business believes that if you empower the people inside an organization, you empower the organization itself. We believe that the People-Ready Business vision gives insurance firms a way to understand how they can leverage the most important asset they have – their people – and a way to think about the value of software as a tool to drive business success.
This is an approach you can see in products like Office SharePoint Server, which gives employees a shared workspace for blogs and wikis, addressing the millennial work style; but that also offers consistency of experience within a managed, well-governed environment that makes it easier to train workers just once, so multiple procedures can be accomplished through the same front-end interface.
Office Communicator is another great example of technology with a quick learning curve that balances the millennial preference for agile collaboration through instant messaging with the need to track and archive these communications in a business setting to meet regulatory requirements.
PressPass: Will Microsoft demonstrate some of these new “millennial” technologies at the ACORD conference?
Hartnett: Microsoft will showcase a number of new technologies that are driving innovation in the industry by creating Connected Experiences. These innovations in mobility, consumer technology and Web content are reflected in the way we live, communicate and work; and, are making inroads in insurance by delivering the full experience producers, customers and employees demand. Demos in the suite will include:
Microsoft Silverlight – Microsoft Silverlight allows insurance firms to create vivid end-user experiences on the web that are browser and platform-independent.
Microsoft Unified Communications & Collaboration – Allows insurance firms to better collaborate internally between individuals, branches and departments, and externally among their industry partners and customers.
Microsoft Virtual Earth – The Microsoft Virtual Earth platform is an integrated set of services that combines innovative imagery, mapping, location, and search functionality, enabling insurance companies to visualize complex business information, and unlock its value by making it accessible, visual, and actionable.
Windows Mobile – Allows consumers to file claims remotely, and allows agents to verify damages in real time, on-site, and stay in contact with their customers anytime, anyplace.
Xbox – A gaming and entertainment device for agent offices that also serves as a communications and collaboration platform, and can be used to develop driver-training simulations.
Zune – A mobile entertainment player that can also be used to train insurance agents and other employees in new and interactive ways.