COMPASSAN OVERVIEW OF THE INSURANCE INDUSTRY

Volume 10. Issue 2. April 2017

The unemployment rate for insurance carriers decreased to 2.4% in March.Page 2

Gain insights into the growing need to retain top performers.Page 4

• At approximately 2.62 million jobs, industry employment increased by roughly 51,700 jobs compared to March of last year.

• On a year-to-year basis, February* saw weekly wages increase across all sectors, excluding reinsurance (down 7.88 percent), title (down 3.03 percent) and life/ health (down 0.01 percent): TPAs, up 4.72 percent; claims, up 1.61 percent; agents/brokers, up 0.98 percent; and property and casualty, up 0.84 percent.• On a year-to-year basis, insurance industry employment saw job growth in February* across all sectors, excluding reinsurance (down 1.20 percent): claims, up 4.28 percent; TPAs, up 2.64 percent; property and casualty, up 2.11 percent; life, up 1.94 percent; health, up 1.83 percent; title, up 1.41 percent; and agents/brokers, up 1.09 percent. p

COMPASS VOLUME 10 p ISSUE 2 PAGE 2

PULSEPULSE provides an overview of the industry's current labor market on a monthly basis.

The average industry unemployment rate for 2017

is 2.83 percent.

5.8%

2.2%

4.4%

2.5%3.7%

3.1%

2011 2012 2013 2014 2015 2016

The U.S. unemployment rate decreased to 4.5 percent in

March with the addition of 98,000 jobs.

March 2017 Labor Statistics

The unemployment rate for insurance carriers decreased to 2.4 percent in March with the

addition of 800 jobs.

*Data broken out by industry segment and category is available only for the prior month.

COMPASS VOLUME 10 p ISSUE 2 PAGE 3

INDUSTRY EXECUTIVES

ON THE MOVECongratulations and best of luck to the following executives who recently took on new challenges within the industry:

• Martin Arnold Senior Vice President and ChiefUnderwritingOfficer SECURA Insurance Companies

• Nicole Baird Head of Human Resources, Americas SCOR

• Donna Demaio Executive Vice President and Chief Auditor American International Group, Inc.

• Thomas Duggan ChiefClaimsOfficer Ironshore Environmental

• Karl Fischbach Head of Binding Authority and Brokerage for Excess & Surplus XL Catlin

• Richard Friesenhahn Head of Multinational for North America QBE North America

• Martha Gallo Executive Vice President and ChiefInformationOfficer American International Group, Inc.

• Thomas R. Graf, MD VicePresidentandChiefMedicalOfficer Horizon Blue Cross Blue Shield of New Jersey

• Sean Hartley Senior Vice President and Chief OperatingOfficer SCOR

• Tamora A. Kapeller Head of US Markets SCOR

• Steve Martenet President Anthem Blue Cross and Blue Shield in Ohio

• Brock Robbins Executive Vice President and Deputy ChiefExecutiveOfficer SCOR

• G. Manning Rountree ChiefExecutiveOfficer White Mountains Insurance Group, Ltd.

• Anthony Sabatino, MD ChiefMedicalOfficer Blue Cross and Blue Shield of Georgia

• Robert Scheinerman President, Group Retirement American International Group, Inc.

• Jim Simpson Regional President, Kaiser Foundation Health Plan Kaiser Permanente

• Todd Solash President, Individual Retirement American International Group, Inc.

• Joyce Trimuel Senior Vice President and Chief DiversityOfficer CNA

• Garth Wicinsky Senior Vice President and Chief AdministrativeOfficer SECURA Insurance Companies

• Douglas Worman Executive Vice President and Chief UnderwritingOfficer CNA

• Kenneth Yale Senior Vice President and Chief ClinicalOfficer Delta Dental of California

RETAINING TOP TALENT: ENGAGEMENT STRATEGIES IN A COMPETITIVE MARKET

What factors are critical for business success? Financial acumen? Business savvy? Public awareness? While these all provide useful contributions to an organization’s staying power, their impact is eclipsed by one thing—human capital. Employees are the most vital aspect of an organization and its future success.

By JoJo Harris, Senior Vice President, and Abbie Fleming, Engagement Director

PAGE 4COMPASS VOLUME 10 p ISSUE 2

With this in mind, companies are increasingly focused on engaging their rising stars. These high-performing professionals can have an invaluable impact on business results and the bottom line. Amid the insurance industry’s emerging leadership skills gap, engaging and retaining top performers may be the key factor in future success.

In today’s candidate-driven labor market, the development of a leadership pipeline and the continued retention of key employees is a major business concern. In fact, 39 percent of organizations are worried that they will lose top talent in the coming year—and they have cause to be concerned.1 According to a Corporate Executive Board survey, one-in-three top performers report feeling disengaged from their company.2 In addition, 12 percent of high potential employees are actively searching for a new job, with nearly 25 percent planning to leave their current organization in the coming year.

These employees play a critical role in the success of an organization and are necessary to ensure that insurance companies are able to bridge the growing executive gap. Organizations need to rethink how they are currently engaging their key performers and implement a retention strategy that better addresses the needs and wants of today’s top talent.

UNDERSTANDING THE ANATOMY OF TOP TALENTBefore an organization can develop and implement a retention plan for its key employees, it must first define what constitutes a high-potential individual. Many organizations identify high-potential talent based on that individual’s contribution to their current roles. However, this may not be the most effective strategy. In the future, these individuals will be asked to deliver results in much bigger roles with much greater responsibility. Rather than focus on current success, organizations need to develop a list of critical attributes that will be essential for future roles and find employees who fit the bill.

Managers should collaborate with human resources to identify the criteria necessary to be considered high-potential. A high-potential employee should have a combination of innate characteristics and learned skills that will lead them to success in their future roles. The key focus areas include ability, engagement and aspiration.

39 percent of organizations are worried that they will lose top talent in the coming year— and they have cause to be concerned.

PAGE 5COMPASS VOLUME 10 p ISSUE 2

PAGE 6

These targeted individuals should have the aspiration to take on responsibilities and challenges that often come with more senior roles. And finally, they should be committed to your organization and see a future within your company. Individuals who fulfill these areas will have the ability, organizational commitment and motivation to rise and succeed within the organization.

PROVIDING THE WELL-DEFINED CAREER PATHA key driver of employee turnover is a perceived lack of development opportunities and a well-defined career path. Individuals want to know that they have opportunities for advancement and that there is a set path for their development. High-potential employees, in particular, are shown to be more committed and engaged when they have a well-defined career path.

Unfortunately, one-in-five top employees believes their personal aspirations differ greatly from what the organization has planned.3 Bridging this gap and providing these professionals with the knowledge of where they are going is an important factor in increasing engagement. Understanding the next steps in terms of development, experience and movement can be a critical deterrent to the turnover of key talent.

Managers should work with their high-potential employees to better understand where they want to take their careers and develop a path for advancement. The conversation should focus on the individual’s career goals. What do they want from their potential role? Where do they see themselves in the future? Organizations can then translate these specific goals into a well-defined leadership path. Each path is unique

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and companies should be creative and flexible when outlining an individual’s career progression. Some organizations have gone as far as to create new positions to better fit the needs and skills of their top employees. Regardless of the specifics, providing high-performers with a well-defined career path is critical to increasing engagement and commitment.

SUPPORTING PROFESSIONAL DEVELOPMENTWhen employees have the opportunity to learn, they are more likely to be engaged. Today’s professionals want to develop new skills and grow in their careers. They want the opportunity to learn and be challenged. In fact, the opportunity to utilize and expand skills and abilities at work ranks as one of the top contributors to job satisfaction.4 This is particularly important for high-potential employees. Eighty-four percent of these individuals believe that their company should provide them with more development, support and investment.5 Organizations that seek to retain these top performers need to empower them by providing professional education and training opportunities.

For many high-potential employees, this development takes the form of special assignments, training, and mentoring and coaching from senior leaders. In addition, job shadowing and rotational programs are good ways to expose these individuals to different skill sets. Not only do these programs help to maintain engagement, they also help position these professionals for future advancement opportunities within the organization.

As an added bonus, high-potentials who receive differentiated opportunities for development and growth are more likely to reciprocate those efforts by actively developing talent in the organization. A company’s investment in its top talent has the potential to cascade throughout the organization and further build the leadership pipeline. In fact, 84 percent of high-performers are actively identifying and developing potential in other employees.6 Organizations should encourage and even promote this development by providing opportunities for top employees to teach and mentor others—whether formally or informally. This is a unique opportunity for high-potential individuals to share with others and gain additional leadership experience.

84 percent of high-potential

employees believe that their companies

should provide them with more development, support and investment.

“

“

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PAGE 8

HIGHLIGHTING SUCCESSEmployee recognition should not be overlooked when developing a high-performer retention strategy. Today’s professionals want to know that their contributions are noticed and appreciated. According to a Globoforce Workforce survey, 82 percent of employees were motivated by receiving praise and 81 percent felt that recognition made them feel more satisfied with their role. It is critical that top-performers are shown that they are valued and that they have a place in the company. Organizations need to recognize their accomplishments and ensure that they know they are valued

members of the team. Providing praise and critical feedback is vital to showcasing your organization’s investment in them.

Regardless of the strategy, retaining and engaging top employees is key to ensuring organizational success. A firm’s most talented individuals can have long-lasting and meaningful impact on the business. Identifying, developing and rewarding these high-potential professionals can provide insurers with a much-needed executive pipeline that will be needed to bridge the growing gap.

1 What It Takes To Retain Your Top Talent (2013). Forbes. https://www.forbes.com/sites/jacquelynsmith/2013/01/24/what-it-takes-to-retain-your-top-talent/#185afeae7084.

2-3 How to Keep Your Top Talent (2010). Harvard Business Review. https://hbr.org/2010/05/how-to-keep-your-top-talent.4 Employee Job Satisfaction and Engagement: Revitalizing a Changing Workforce (2016). The Society for Human Resource Management. https://www.shrm.org/hr-today/trends-and-forecasting/

research-and-surveys/documents/2016-employee-job-satisfaction-and-engagement-report.pdf.

5-6 High-Potential Talent: A View from Inside the Leadership Pipeline (2014). Center for Creative Leadership. http://www.ccl.org/wp-content/uploads/2015/04/highPotentialTalent.pdf.

7 The Growing Influence of Employee Recognition (2012). Globoforce. http://go.globoforce.com/rs/globoforce/images/Mood_Tracker_Spring2012-final_2.pdf.

JoJo Harris is senior vice president of human resources at The Jacobson Group, the leading global provider of talent to the insurance industry. In this role, JoJoprovides leadershipandmanagementof thefirm’shuman resource functions. She can be reached at +1 (800) 466-1578 or jharris@jacobsononline.com.

Abbie Fleming is an engagement director for The Jacobson Group. As part of Jacobson’s executive search team, Abbie manages C-level,Vice President and other executive-level searches for clients across all sectors of the insurance industry. She can be reached at +1 (800) 466-1578 or afleming@jacobsononline.com.

To further discuss this topic or if we can serve as a thought leader in yourtalent-relatedendeavors,don’thesitatetocontactJoJoorAbbie.

COMPASS VOLUME 10 p ISSUE 2

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