06.HR STRATEGIES TO RETAIN EMPLOYEES IN INSURANCE INDUSTRY

 

What is   the role of  HR

 

HR department is tasked with maximizing employee productivity and protecting the company from any issues that may arise within the workforce. HR responsibilities include compensation and benefits, recruitment, firing, and keeping up to date with any laws that may affect the company and its employees.

  Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. An entity which provides insurance is known as an insurer, an insurance company, an insurance carrier or an underwrite.

Insurance industry workforce mainly comprised with  Service Associates ,Customer Service Managers Sales Agents, Insurance Underwriters   and Higher grade levels. There is minimum skill or educational level required to enter insurance industry as sales agent   in current level observations .  The shortage of skills within the insurance workforce may threaten the growth potential of insurance companies because of the lack of formal education of some insurance professionals.  Insurance agency owners need to consider strategies used during daily operations to retain talented employees to avoid excessive employee turnover rates.  Considering additional factors during the recruiting and hiring process may yield retention of high quality employees, outlining ways to manage employee talent and reduce costs associated with employee turnover for business owners.

Here is a look at some of the biggest challenges facing the HR Department in insurance industry which is employee turn   over in sales staff , along with ideas and innovations to solve them:

Ordinarily, against this contextual, most people expect that insurance firms will be viable and popular in societies. However, this is not the case since many insurance businesses face difficult challenges that seriously threaten their survivals and existences. This is common in less developed societies where political and socio-economic systems are yet to crystallize. Social, economic, and political systems in such countries present terrible problems to insurance companies . Today, each business changes in some ways and the changes can either be negative or positive. In any industry, there are various problems to be faced. Here are the biggest challenges for insurance companies.

01    Weak manpower   & Staff turn Over    (This issue wil be  discussed through this article)

Non-professionals run many of the insurance companies today. In fact, many people think that what it takes to be an insurance professional is just some knowledge of monetary studies with no specialized training. Indeed, this has majorly affected the dependability and operations of insurance firms in this century.

  02.Lack of trust

This is a reason why many individuals don`t bother with insurance. Many insurance firms fail to pay claims, and they don`t own up to offering some benefits. Therefore, most people just see insurance as one of the unnecessary expenses. Many insurance firms do shut down because of financial challenges and individuals who are the victims of the loss don`t even think twice about purchasing insurance policies.

 3.    Competition

Today, there are many insurance firms on the market and therefore there is an intensive challenge for insurers. Each company looks for the best way of selling their insurance products in the best possible way and targets a particular group of individuals. Most insurance businesses, especially the new ones are the most doubted companies. In fact, most people trust some of the existing insurance firms compared to the new businesses since the new enterprises are operated on a thin line between failure and success—and no one will want to take such risks with the little among of money that they have.

 4.    Mismanagement

As the owner of the insurance business, one is solely responsible for all issues that his or her clients may have regarding the management of the insurance business. All insurance firms that are mismanaged can`t hide their faults for a longer time without the clients noticing. As time move, there will be a constant increase in the number of clients` complaints, and if his or her insurance firm is not transparent, then he or she will lose more customers. Also, incompetent management may cost the company a lot, particularly if they have poor communication with their clients.

5.    Economic instability

When the country`s economy is down, all insurance companies will be affected. At such situations, the rates can be affected such that the insurance companies might be forced to increase their rates, just like interest rates on credit facilities provided by financial institutions.

Insurance companies focused on below     challenges  after Covid 19 Pandemic situation

Shift to remote working

Across all of the insurers that we have been speaking with, one aspect immediately stands out: a mass shift to remote working. This is true across many different industries, of course. In most countries, anything approaching 90 percent of staff worked  from home, with only a fraction of staff on-site for critical jobs that cannot be done remotely. These issues necessitate a number of reactions. Firstly, insurers are needing to insist that customers contact them by phone with only the most urgent of inquiries; everything else needs to be routed online. It also means that insurers need to look at their internal resources and how they are configured - potentially moving as many people into claims as possible, even if that is not their usual job. 

Digitized is optimized

Certainly, those insurers with more advanced digital underwriting, claims, and administrative processes are in a much stronger position than others, even if processing time is slower now than in normal conditions. Those who do not have these capabilities or who rely on cruder technology workflows are likely to be struggling more. There is a risk of losing customers to more digitally-enabled competitors moving forward, particularly in personal lines where many customers' patience with non-digitized processes these days is low.

Improving quality of analytical data

Data is constantly being generated and leveraged in the insurance industry. But as we know, quantity doesn’t always equate to quality. To get the most out of user, operational and marketing data, insurers need to have robust data management plans in place. With these plans, they can improve the overall quality of analytical data and gain more meaningful insights to improve customer experiences.

Why People Leave the insurance Industry

Low wages-early 60% of those leaving the industry stated their pay was the primary reason for leaving.

Unable to build up stable client base-Finding clients is not an easy task. Companies invest a lot of time and resources into finding quality leads. They will have to make cold calls, build an online presence, travel and meet people, etc.- all to find potential clients. However, there is no guarantee that simply because they  met a prospect, the individual will buy a policy from them. All of the tasks involved in building up a client base can consume a lot of  time.

Stress and Pressure to sell-Regardless of which kind of agency you work for, there will be a certain level of stress and pressure to sell that comes with the job. If they were   unable to meet the sales target, their commissions will take a hit. If they are likely to make less money since their earnings are highly dependent on how many and what type of insurance products they  sell.

Keep up with changing regulations -The government and insurance regulator have laid out a list of regulations for the players in the industry to follow. To meet the changing needs, rules pertaining to insurance get modified or changed, sometimes on a regular basis. Keeping up with them most sales agents can seem like an overwhelming task if they are  not fully equipped and prepared. That is ne of the reasons to leaving their jobs

 Disadvantages of employee turnover to the Insurance Companies

1.Difficult to calculate turnover cost which includes hiring costs, training costs, productivity loss and the average employee salary. This cost may add high amount to the company's expenses.

2.  Company's information may loss, when an employee leaves the organization. He takes with him the valuable information about the organization, the customers, the current projects and also the past history of its competitors to the new employer. So it may avoid though employee retention.

3. Organization may spend lot of time and money on an employee in belief of he/she works for organizations future return. When the employee leaves the organization the investment is not realized.

4. Customer services will interrupt if employee retention is poor. The relationships between the customers and clients are developed through services of the business. This service is providing by employee, When an employee leaves the organization suddenly, the relationships that employee built for the company are suffered and also could lead to loss of contact with potential customer.

Employee turnover is a larger problem currently faced by insurance companies, as a major part of their revenue is lost. Analyzing the causes of employee turnover is imperative for insurance companies. An exploratory survey is designed, keeping in mind following objectives. To identify the factors which influence the decision to join the Insurance Industry.

To analyze the factors which play a major role in job satisfaction.

To identify the factors which influence the high turnover  rate.

To study and formulate the strategies for employee retention.

 Employee retention benefits to the insurance company 

Employee retention matters as organizational issues such as training time and investment; lost knowledge; insecure employees and a costly candidate search are involved. Hence, the failure to retain an important employee is a costly affair for an organization. The importance of retaining the best talent in the organization is usually realized by intelligent employers

Employee Turnover is perhaps paid the least attention among various employees’ issues. It is shrugged off as inevitable. Few companies take a proactive approach towards reducing employee turnover. It always includes substantial costs of replacing the key employee who fall into the category of high performers. Replacing includes the costs of recruitment advertisement, referral bonuses, selection testing, training cost.

Which strategy to be used by HR Departments 

Herzberg’s motivator-hygiene theory to explore motivator factors that encourage employee retention. .Each and every employees profiles to be reviewed, including a performance evaluation template, organizational chart that highlights growth opportunities, employee evaluation and review form, and a staff guide to performance development.  Data to be  thematically analyzed and triangulated to ensure the trustworthiness of interpretations. These are to be comprised with  4 themes: offering competitive compensation, use of frequent two-way communications, providing growth opportunities, and understanding employee needs.  These findings could impact positive social change by providing insurance managers and other small business managers with strategies to retain employees that could lead to higher levels of commitment and engagement from employees, yielding increased productivity and profits for the business.  

Conclusion 

The above-mentioned points are only few of things to staff retention in insurance industry. Overall, there is plenty of room to grow for the right candidates. The set of skills required for this line of work is very specific. If   HR departments have good communication skills and enjoy interacting with people, they may do well in this field. Satisfy employees  will make the business through people on a daily basis and convince them on why they need financial protection. If that sounds like  cup of tea, any company can be a successful insurance Company.

 

References :

Phipps, S,.Covid 19 insurance Operations Challenges [Online] Available at:https://home.kpmg/xx/en/home/insights/2020/04/covid-19-insurance-operations-challenges.html>[Accessed on  25 December 2021]

H.brian , Challenges Impacting the Global Insurance Industry[Online] Available at https://www.moodysanalytics.com/risk-perspectives-magazine/integrated-risk-management/principles-and-practices/challenges-impacting-global-insurance-industry>[Accessed on 18 December 2021]