Strategic skills management in the insurance industry

At a time of rapid technological change, increasing regulatory requirements and changing customer needs, the insurance industry is facing major challenges. In order to remain competitive and ensure future viability, strategic skills management is crucial. This approach enables insurance companies to develop the skills of their employees in a targeted manner and adapt them to the requirements of the digital transformation.

Challenges facing the insurance industry - challenges facing managers

The insurance industry is facing a multitude of changes:

• The need to further develop business models is leading to fundamental changes in employee structures in many companies
• Innovative products, new technologies and, last but not least, regulation are increasing the complexity of the business and thus leading to increasing skill requirements for all employees
• The expansion of the range of services while at the same time reducing the depth of value creation is leading to an increasing specialization of requirement profiles in large parts of the workforce
• The need to consistently focus on customer needs increasingly requires customer and service-oriented skills - particularly in sales, customer service and claims

To meet these challenges, insurance companies must ensure that their employees have the necessary skills to develop and implement innovative solutions. The challenges of our time are primarily people challenges.

This raises very specific questions for managers: Where and when are we at risk of losing skills? Are we in the right position for the future with our workforce? What training measures do we need to tackle in the future? What (replacement) staffing tasks do we have?

What is the contribution of strategic skills management to the solution?

Strategic skills management encompasses the systematic identification, development and management of skills within a company. It goes beyond simple training measures and views skills as a strategic competitive factor.

An integrated - and cross-divisional - perspective on skills and competencies enables insurers to manage performance, learning and development in line with requirements.

Skills management provides answers to key questions from managers by ...

• Transparency about the existing skills and competencies in the current organization
• Identifying requirements, including the identification of existing or future over- and under-skilling
• Supporting the systematic development and acquisition of relevant skills and competencies
• Skills-based career planning - the right employee in the right position at the right time
• Improving sourcing planning and decisions with regard to the purchase of external capacities and skills (internal/external sourcing mix)

Fields of action for the implementation of strategic skills management in insurance companies

Skill management must be specifically aligned with business priorities. To this end, it is necessary to deal with changing strategic priorities in terms of content and to meet the specialist departments at eye level.  A formalized analysis of the factors influencing future skill requirements is carried out with the help of business scenarios, for example. At the same time, original people pressure points must also be addressed. The priorities must therefore be clear before the start of activities!

The basic structure of the conceptual framework for role, competence and skill models must be kept manageable. Our experience shows that the necessary individuality in terms of content can be permitted when applying to individual areas while still ensuring company-wide comparability via content categories. Framework specifications for skill taxonomy should always remain manageable!

In any case, considerations regarding skills management will encounter a set of instruments that people departments have previously used to manage the workforce. Much of this should or must be retained and is fixed accordingly with staff representation committees. Recognizing this and ensuring interfaces and docking capability is essential for subsequent feasibility.

The specific technical design requires the involvement of the specialist departments, both in the revision/redefinition of role and skill profiles and in the downstream specific assignment of employees.  In our project settings, we therefore consistently combine an understanding of methods with technical stability in order to be able to critically scrutinize the strategic fit and completeness of the skill requirements and to create operational relief.

It is important to move from the initial set-up to an application-oriented approach. Now it is important to approach quick use cases and personnel development after the introduction of skills management with a long-term perspective in order to be “correctly positioned” for future challenges. Gap analyses and deriving L&D initiatives are the first manageably complex steps on the way to quantitative and qualitative strategic HR planning.

We often work with our clients to develop skills management as an introduction to a data-driven understanding of HR. The focus here is on generating data and collecting actual states in definable data formats, but also, of course, on gaining initial insights from the data. IT architectural conditions play just as much a role as the question of a central skills management tool. It is therefore important to think ahead and consistently develop the subsequent use of data when setting up skill management!

Best practices from our project experience for implementation

Skill management must not become an end in itself! We must think in the mind of the customer (= specialist area), and develop a shared view of the requirements and need for action. Key success factors here are clear added value for the departments, quick results instead of a long concept phase and a minimally invasive approach that ensures the greatest possible compatibility with existing tools. Technological support from tools such as learning management systems (LMS) or AI-supported skill analysis tools can make the process efficient.

Conclusion

Strategic skills management is not a “nice-to-have”, but a decisive success factor for insurance companies in the 21st century. It enables companies to actively shape technological change, meet customer needs and cope with increasing competitive pressure. Insurers that invest in the targeted development of their employees not only secure their market position, but also actively shape the future of the industry.