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Setting mutual and mid-market insurance carriers up for success

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Mutual and mid-market insurance carriers face a sea of challenges (and opportunities) as the industry looks to grow and innovate its way out of the COVID-19 crisis.

One major issue that mutual and mid-market carriers feel acutely is the need for talent. The insurance industry at large is facing a talent shortage, thanks to its ageing population and heightened competition from other financial services and technology firms. Unfortunately, these problems have only been exacerbated by the COVID-19 pandemic and the major shift in employee preferences towards remote and technology-first working environments.

“The war for talent is impacting all areas of the insurance industry, but mutual and mid-market carriers are certainly feeling this in a more pointed way,” said Caryn Siebert (pictured, right), VP Sales, Carrier Practice, Gallagher Bassett. “The pandemic has driven a real change in working habits and preferences, and while some of these changes – a shift to values based or purposeful work – lend themselves well to the natural inclination of mutual and mid-market carriers, much of the demand for remote or flexible work is making it difficult for this segment to attract talent.”

What Gallagher Bassett has heard from many of its mutual and mid-market carrier partners is that their capital constraints and reduced geographical access to talent make it increasingly difficult to find and keep skilled claims professionals, explained Amy Cooper (pictured, left), VP Sales, Carrier Practice, Gallagher Bassett. But there’s no reason for mutual and mid-market carriers to dismay, she stressed.

Read next: Gallagher Bassett CEO on COVID-19, the broker channel, and the firm’s strategic vision

“Mutuals often have a natural advantage of being more focused on values, community and purpose,” Cooper told Insurance Business. “This can be really appealing for talent, especially the new generation entering the workforce, seeking a company that considers its position in society and a role that supports their own individual values. The connection to members and policyholders can take away the ‘cog in the wheel’ feeling some employees in large corporations feel.

“For mutuals, there is a great opportunity here to leverage their natural structure, which prioritizes people and community, to take the time to listen and receive feedback from current employees. This feedback must be considered in how mutuals move their organization forward, whether it’s through competitive packages, culture and engagement initiatives or diversity programs.”

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Siebert added that there are many factors that can make mutual and mid-market carriers an employer of choice – if leveraged correctly. For example, they can use partnerships with third-party administrators (TPA) like Gallagher Bassett to unlock growth and innovation opportunities that are attractive to top talent. By tapping into the expertise and experience of a TPA, mutual and mid-market carriers can grow into new lines of business or geographical markets strategically without the burden of building critical capabilities from the ground up.

Read more: Gallagher Bassett Transportation launches Major Case Unit

“Mutuals are under increasing pressure to grow to ensure they stand out in the market and remain competitive to their members, so partnering with a TPA like Gallagher Bassett can help them immediately address recruitment challenges and access new markets,” Siebert said. “The capital investment required to keep up to date with technology can be limiting for many types of companies, but through a TPA with a strong RMIS platform and award-winning claims innovations, they can access the predictive analytics they need to grow and diversify, more quickly and without the capital constraint.”

A TPA can also help mutual and mid-market carriers to implement technological innovation – an absolute must in the industry today, not only from an operational standpoint, but also in terms of creating exciting organizations that attract and retain top talent.

“Mutuals are certainly on the road to technological innovation, but there are many roadblocks in their way,” said Siebert. “The challenges of capital constraints, lack of internal technical expertise and the simple matter of not enough hours in the day often holds mutuals, reciprocals, and mid-market carriers back from implementing the technology (especially as it’s not a core service offering) they need to grow and compete in an efficient manner.”

When the COVID-19 pandemic struck, some mutual and mid-market carriers did not have the technological infrastructure in place to support remote working, and they weren’t set up for the flexible work future that employees today are demanding. Overcoming technological roadblocks like that is not an impossible task, Cooper noted, but it is a road that’s hard to walk alone.

“When we partner with mutual carriers, they get access to a broad range of agile and innovative tools. They often immediately start seeing improvements in their program management with instantaneous feedback on file and resolution manager performance, supported by the insights of our claims professionals who have made a career out of helping carriers grow,” Cooper explained. “It also offers them an opportunity to benchmark their results against a broader data set which Gallagher Bassett has been building since our inception over 50-years-ago.”

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