NCCI’s Industry Roundtable: NCCI president and CEO Bill Donnell engages workers compensation leaders on the critical issues and trends impacting the industry today and in the future. In this installment, Donnell speaks with Douglas Dirks, president and CEO of Employers Holdings, Inc. and the current NCCI board chair.
Bill: We recently released our
Focus on 5, the results of our annual survey of insurance carrier executives. The report highlights the top issues these leaders believe the industry will face in 2019. What do you think are some of the biggest challenges for our industry this year?
Doug: It’s been an interesting time for the industry. We have declining premiums because of declining loss costs. This means that fewer workers are getting hurt, and those that do are being treated more effectively and getting back to work faster. The landscape of workers compensation is changing, and we have to be nimbler to keep up.
I believe it comes down to data analytics and the power that technology has given us—the ability to deploy more sophisticated pricing algorithms and get real-time data. The industry no longer has to wait for an end-of-the-month or end-of-the-quarter report to understand where results are headed. That’s a dramatic change.
With real-time data, we can adjust pricing algorithms much more frequently, and this can suppress the volatility in the insurance cycle. The big peaks and valleys aren’t gone, but there’s potential for them to be moderated, because we have more and better information than we’ve ever had before.
Bill: As we look ahead, we know that keeping and replacing talent is an important topic for our industry. What are your views on how we can attract new talent to help fill the void of those who are leaving?
Doug: The unemployment rate in this industry is well below the national average. We must ask, what’s the biggest threat to getting jobs done in our industry? It might start with the perception by outsiders of the proverbial “insurance salesman” job, coloring their views when it comes to career opportunities. There are so many aspects to the insurance industry, in addition to selling—that’s just one side. There are claims, underwriting, actuarial work, data science, asset management, and much more. The talent challenge is broad because we have so much to offer.
Bill: Where does automation fit into this? As we seek to increase our talent pool and bring the next generation to the workforce, should we be concerned about robots, artificial intelligence (AI), and automation?
Doug: Automation, robotics, and machinery will indeed take over more of the work we do, but I think that’s a good thing in the sense that we can use bots and AI to perform tasks that allow human workers to better use their skills where they have the greatest impact. Remember—even companies that heavily leverage automation still need a human at some point in a transaction, like a delivery company that needs a human worker to drive a package to a home and place it at the doorstep. The human component is important in that transaction.
I view robots as potential business partners, not worker replacements. If a machine can do a task, why not let it, so we can focus on more vital aspects of our roles? That’s how we solve the talent challenge—by enabling seamless handoffs between machines and people. Companies that do that well will win.
Bill: The industry will indeed experience transition in the future, including in the structure and alignment of key organizations. Property Casualty Insurers Association of America and the American Insurance Association recently merged, bringing together two trade organizations that represent the industry—the American Property Casualty Insurance Association. As a PCI board member, can you tell us what this will look like going forward? What are the focus areas?
Doug: The merger was developed to allow the industry to speak more clearly through a single voice. Both groups were very active in terms of advocating public policy position at the state and federal levels. The state level is especially important for work comp carriers because they are very state-based. Having advocates on the ground pushing public policy forward is important. There will be a few years of transition to bring AIA into the governance structure of PCI, and the chair of AIA is new chair of PCI. Having these two organizations as policy advocates—and actively making sure that those coming into public policy-making positions are well informed on the decisions we are going to be asking them to support through our lobbying efforts—is vital.
Bill: There’s certainly a great deal of change in store for companies, organizations, workers, and the industry overall. As we look forward to what’s on the horizon for this year and beyond, what advice do you have for those working in the industry?
Doug: You must be committed to lifelong learning. With so many ways to access education, it’s easier now more than ever. It’s also critical because the world is changing so rapidly and the things you’ll need to know now and in the future will evolve. Having curiosity is vital—and an excellent way to learn.
They say that the next generation of professionals will have eight different careers over their lifetime. Not jobs—careers. You could have eight different careers within the same company because it’s possible to do that in insurance. If you have ability coupled with curiosity, you’ll thrive. Those challenging moments when you’re in a new or different role is when you’ll learn the most. Never quit and keep learning forever.
Bill: Doug, thank you for sharing your perspectives.
Doug: Thanks for the opportunity.