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Author Katie Hevey (née Liddle), Consultant at Leathwaite.

At PwC’s 19th Annual Global CEO Survey (2016) one of the questions asked was ‘which technologies CEOs believed would generate the greatest return in terms of engagement with wider stakeholders.’

Top of this list was data & analytics at 79%

Data and analytics form the backbone of understanding the current and future customer, thus enabling insurers to target and tailor products with much greater accuracy; something Aviva refers to as the “TCC – True Customer Composite.”

As such, in a highly competitive, price-driven and consumer-led insurance market, organisations that leverage the greatest value from their data and analytics will gain a notable competitive advantage.

Insurers are lagging behind in the ‘data race’

The insurance sector is, without doubt, data-rich but is the industry leveraging value from this data? EY’s 2016 Sensor Data Survey (Figure 1)shows that insurers are lagging behind the overall market when it comes to utilising data within their business model.

How can insurers improve?

When seeking to examine this issue from a talent strategy perspective, there appears to be a need to address the following two questions:

  • Where does responsibility lie to ensure companies maximise their value from data and analytics?
  • Do insurance companies possess the internal capabilities to deliver this change or do they need to consider a different structure and talent base?

We have seen the market respond to the data and analytics challenge by placing an increased level of significance on the adoption of certain roles, including that of the Chief Data Officer (CDO) and the Head of Customer Analytics.

This is demonstrated within a recent study by Gartner which highlighted that in 2015 just 25% of companies had a CDO in place, but by 2019 Gartner predicts that 90% of organisations will have someone in this role.

As much as this demonstrates the demand for the position, what is uncertain and challenging for organisations is:

  • To whom the role reports
  • The scope of the role
  • Role definition and purpose

The metrics to measure the effectiveness of these roles Stephane Pere, the Chief Data Officer at The Economist, highlights this within his own experience: “When I got the job there was no agenda, no goal or job description.”

The success of any role hinges on the ability of an organisation to clarify these factors, as IBM’s Chief Analytics Officer and Chief Economist Martin Fleming highlights: “A CDO needs to have a role and position within the leadership of the organisation, in order to have the influence and the clout necessary to drive the change that’s required.”

Understanding the purpose of each role

Defining each of these roles:

Chief Data Officer – Generally speaking, this individual implements the data strategy across the organisation, ensuring that data and analytics is successfully utilised to maximise and generate business, in addition to investigating the introduction of new technologies.

The reporting line and skillset of the individual varies, and is often dependent on the relative data maturity and objectives of the organisation. Analysis by PwC in their 2015 ‘Evolution of the Chief Data Officer’ report (Figure 2) identified that in 42% of instances the CDO reported into the CIO, in another 42% they reported into the COO, and the remaining 16% reported into specific functional heads. However, in Leathwaite’s experience the reporting line of a CDO can also be into a specific business area and in some cases even directly to the CEO.

Head of Customer Analytics – It is not uncommon for this role to have a variety of reporting lines, including: the COO, Chief Marketing Officer, Chief Digital Officer or a specific business head.

The core responsibilities of this role are evangelising the benefits of customer analytics as a way of creating insights into areas like: customer composition, customer value management and pricing.

Bridging the talent gap

It is my belief that in order to help insurance companies bridge the current talent gap within data and analytics the following approaches should be considered:

  • Developing a short-term and long-term skill acquisition plan
  • Building increased diversity into the hiring strategy to encompass out of industry / country talent
  • Evolving the corporate brand and culture to ensure they appeal to future talent

Short-term and long-term skill acquisition

Companies will find that their human capital and resource requirements will change as they encounter specific business needs or as they navigate through the different stages of the data and analytics lifecycle.

Therefore, building speed and flexibility into hiring strategies is an essential ingredient.

Notably, if a company chooses to pursue a permanent only hiring strategy, it may not provide them with the flexibility they require. Additionally, it can take substantial time to plan and implement, and potentially be cost-heavy.

It is now increasingly common for companies to engage either an executive interim or a consultancy in order to provide an immediate solution for the skills and resource they require. This provides them the flexibility required to shape the role and the breathing space needed to build an effective longer term hiring strategy, especially whilst the organisation is still learning what skills and roles will create the most effective framework.

Diversified hiring strategies

Our report has already highlighted that industries such as retail, automotive and telco are leading the way with their data and analytics strategies.
If the insurance industry is to continue to evolve, out of industry hiring is another avenue that would provide the additional creativity, skills and experience that is needed to drive the development of the sector.

Recent examples of companies incorporating greater diversity within their hiring include: Gillian Tomlinson as CDO at RSA, who came from Whitbread, and Victor Hu as the Head of Data Science at QBE, who joined from the Marketing and Advertising industry.

Brand and culture

Finally, brand perception and workplace culture will become an increasingly essential element if insurance companies are to attract talent, especially those individuals who currently reside within the FinTech, Digital, Silicon Valley or InsurTech industries. This is the talent that will drive the future growth and profitability of the insurance industry, therefore these individuals must not only be able to relate to the culture of the organisation they are intending to join, but actively see themselves building a successful and rewarding career within such companies.

Furthermore, as competition for talent continues to heighten, partnering with a specialist human capital and talent firm that has the ability to attract the calibre and diversity of talent required, whilst accurately and effectively representing the brand, will become an integral part of this strategy.

Conclusion

As Oliver Bäte, the CEO at Allianz sums up: “The number one priority is to understand everything about our clients, in order to provide added-value to them in future.”
The future of insurance centres around being less product and more customer-aligned. The only way to do this, and gain a competitive advantage, is to leverage greater value from data and analytics.

What is clear is that there needs to be a substantial influx of top tier talent in order to enable the industry to evolve at the rate required.

How can Leathwaite assist?

With a global network of offices, Leathwaite is perfectly placed to advise clients on the future demand cycle for talent. For a discussion on how the talent landscape is changing within this sector, please call Katie Hevey (née Liddle) on +44 207 151 5151.

Key market moves across data & analytics:

  • Adam Kornick leaves Aviva as Global Analytics Director to return to the US.
  • Gilliam Tomlinson is appointed Chief Data Officer at RSA. She was previously Chief Data Officer at Whitbread.
  • Victor Hu is appointed Head of Data Science at QBE. He was previously the Chief Data Officer at Tictrac.
  • Wes Hunt is appointed the Chief Data Officer at MetLife. He was previously the Chief Data Officer at Nationwide Insurance.

FEBRUARY 2017 – Leathwaite Data and Analytics Event: Click here to learn more and register your interest