workplace trends - kks space · “insurers need to step out from the insurance industry basket and...

September 2017

Workplace Trends | InsuranceWhite Paper Update 2017

“Insurers need to step out from the insurance industry basket and look at how other companies function—including other financial services companies, but also companies that are the best at what they do in other industries—to create new benchmarks. For the chief customer experience officer, this may mean comparing how much useful information a consumer can easily get on his company’s site compared to that available on a major search engine.

If I could sum it up, it would be become disruptive innovators. Because if insurers do not disrupt themselves, others will”

Gary Shaw | Vice Chairman Deloitte 2016 Insurance Trends

© KKS Strategy LLP | Workplace Trends | Insurance White Paper | Update September 2017 3

Contents

Introduction Insurance Sector 4

Sector Overview London & Technology 5

Employment & Generations 7

Workplace Design Guiding Design Principles 9

Key Design Factors 10

Insurance Sector 13


Introduction

Over the past 25 years, the insurance sector has experienced many forces for change, as have other business sectors.

The industry, however, also faces far broader challenges. Technology, customer expectations, demographic shifts and emerging markets will all help shape the sector’s longer term future.

The insurance technology (InsurTech) industry is expanding quickly, and this momentum has been a catalyst for modernisation and improved services. They can assist insurers discover emerging coverage needs and risks that demand new insurance products and services, resulting in improved product portfolio strategy and design of new risk models.

The trends in the insurance sector are either technology related or have technology as one of its drivers. Technology trends are disturbing traditional business patterns which will, in turn, increase consumer and client power. Modelling applications and electronic trading have met with resistance in the past, due to perceptions that models are inaccurate for many classes of business, such as casualty, marine and terrorism, while electronic transactions marginalise the expert judgement necessary to supplement risk management models.

Strong customer relationships remain the key to future success. Technology changes the nature of relationship building in the business, however personalised interactions with clients remain essential to distinguish themselves within a wider scheme of industry consolidation. Potentially the focus will shift away from investing time in internal processes and specific transactions, and allow more time for market-facing relationships.

Ongoing technology innovations:

• Internet of Things (IoT)• Artificial Intelligence (AI) • Robotic Process Automation (RPA)• Blockchain• Hybrid cloud• Gamification• Big data analytics• Digital underwriting• Chatbots / digital advisors• Augmented reality (AR) & Virtual reality (VR)


Sector Overview | London & TechnologyIndustry Trends

The insurance market has grown from a historical tradition of face-to-face interaction between brokers and underwriters in the assessment and placement of risks. Personal relationships are seen as crucial where trust and personal advocacy are important factors in expert judgement. Lloyds of London is, therefore, a market characterised by face-to-face communication, which is associated with long-term relationships that enhance expert judgement.

In 2015 Lloyds began exploring new technologies as part of their modernisation plan, developing Target Operating Model (TOM) to make the market more accessible, efficient and relevant, deliver simplicity and reduce the cost of doing business. A year later they reported their progress on the initiatives:

Electronic placing platform (PPL) enables brokers and insurers to quote, negotiate and bind business digitally. In July the system went live for stand alone terrorism and the first risk was bound in the first hour of trading. It is not designed to detract from the face-to-face negotiation or the way the market handles its core business. It exists to streamline work processes that are inefficient, and help make the market easier and more cost-effective to do business with.

The Central Services Refresh Programme (CSRP) is designed to enable brokers to submit premiums and claims electronically using the same data and process standards as outside the London market. It will greatly reduce the unique and very significant administrative burden of trading in London – particularly for brokers. This was implemented successfully in April, proving improvements in the speed with which payments are made and increased accuracy of information going through the system.

Delegated Authority Services: an important focus as delegated underwriting plays a key role in the London insurance market. Lloyd’s alone receives around 30% of its premium income through firms that hold underwriting authority on behalf of syndicates. This trend is set to continue with growth in to new territories and new classes of business through third-party partnerships.

Project Tomorrow, piloted in 2016, has shown that it is possible reduce the possibility of human error, data loss and data corruption by removing the need for re-keying and manual manipulation of data. Information that used to take 60 days to arrive in London is now available in a week.

The next step is centralised coverholder audit and compliance services: with single audit for cover holders, consistent compliance processes and data which is collected once and shared with the relevant stakeholders. With increased regulatory oversight, achieving this vision will be an important step to mitigate and manage workload and regulatory requirements.


Sector Overview | Employment & GenerationsIndustry Trends

Sectors like financial services and healthcare have embraced digitisation and automation however the insurance sector has largely played catch up. The insurance industry is becoming big data. If you consider the volume collected by black boxes, mobile, web browser histories, social media profiles, weather patterns, risk modelling and anything having to do with insurance for both consumers and customers, then it is not just big data but giant data.

In addition insurance faces a potentially enormous employment hole, as the current workforce ages, with McKinsey predicting 25% of the industry retiring in 2018, therefore a critical factor is to attract and retain the best talent in the industry and tempt the younger generation to enter the insurance workplace. In part this can be achieved by modernising the image of insurance and, by embracing current trends and understanding the implications for the workplace, position themselves as forward thinking and progressive. Employers are recognising that they need to build a pipeline of talent that reaches beyond traditional roles of underwriters, claims and sales to technology-minded candidates to fill their big data needs.

New hires coming straight from college struggle with the transition from a flexible educational atmosphere to the more structured corporate world. Millennials want to make an impact, are tech savvy and believe that work is an expression of themselves. Companies that are looking to attract these young professionals must focus on creating a culture and environment that fulfil these generational workplace preferences.

The reputation of financial services has suffered and this is reflected in the views of millennials. The 2012 PwC report ‘Millennials at Work’ states that 21% of millennials questioned said they’d rather not work in the financial services sector. They believed that corporate loyalty will not necessarily bring rewards or long-term security and are watchful for new opportunities. This trend is particularly pronounced in the financial services sector with only 10% of millennials working in the sector in 2012 saying that they planned to stay in their current role for the long term, compared to 18% across all sectors. 52% of those working in financial services said they expect to have between two and five employers during their career, and 34% expect to have six or more. Employers who do not invest in this group are likely to see less loyalty than those that do. Firms looking to build loyalty will need to think creatively to foster an emotional connection to their brand.

The insurance sector is facing 25% of their industry retiring in 2018


Effective Workplace Design | Guiding Design PrinciplesWorkplace

A number of factors drive workplace design which in turn need to be balanced with the specific needs of the business. No one single aspect is responsible for the success of a workplace, all of our basic human needs have to be balanced with the overriding business aspirations and commercial parameters. This includes personal and communal space allocation; environmental issues around light, noise, air and temperature; colour and finishes; branding and culture and variety and choice.

A Gallup Poll undertaken in 2015 found only 30% of employees felt engaged at work. The Value of Workplace Research study in 2014 found engaged employees can boost a company’s bottom line by up to 20%.

Engagement and satisfaction are increased by flexible working environments. 30% of staff with easy access to flexible work environments reported feeling ‘very engaged’ in their jobs. Compare this to the 19% among those with moderate flexibility and the 10% among those with little access to flexibility.

Lighting and acoustics also have a significant impact on the way people perform in the work place. Better workplace lighting (both natural daylight and artificial light) has been linked to a 15% reduction in absenteeism. Other studies have reported productivity increases from 3% to 20% attributed to optimised lighting levels.

Office acoustics contribute to performance and wellbeing in the workplace. To support complex work, many people seek out quiet places. Planned or spontaneous interactions without disturbing others is a requirement for teamwork and relationship development. In environments with white noise, or sound masking, employees report improvements of up to 38% for the performance of simple tasks and 27% for complex tasks.

Spaces we occupy shape who we are and how we behave, it has a significant impact on our psychological well-being and our performance.


Effective Workplace Design | Key Design FactorsWorkplace

Choice & Variety:

• Provide work settings appropriate to support diverse tasks and personalities.

• Deliver environments to aid collaboration and team communication promoting creativity & innovation.

• Offer settings to enhance specific task productivity. Subdued for concentration or stimulating for interaction.

• Support the varied generational requirements within the workplace.

Flexibility & Agility:

• Promote flexible working through technology solutions.

• Support flexible and agile work settings to provide variety & choice for staff.

• Enable the workplace to adapt easily to change in the business’ needs and minimise disruption to staff.

• Promote the firm’s culture and approach through flexibility and work life balance.

Health & Wellbeing:

• Provide appropriate personal and communal space allocation.

• Encourage activity through design: diverse furniture solutions promoting movement and activity; space planning to urge walking to central facilities and amenities; enhancing fire stairs to encourage use over lifts.

• Provide outside space and recreation facilities.

• Understand the personality profile of the organisation to ensure appropriate balance of work settings to promote productivity, satisfaction and enjoyment.

Brand Expression

• Communicate the brand expression to reflect values and culture to both internal and external audiences.

• Provide a unified environment, where staff feel supported and inspired and employees, clients and visitors feel welcomed and engaged.

• Deliver clear and distinct wayfinding.


Effective Workplace Design | Key Design FactorsWorkplace

Community & Social:

• Provide settings to enable cohesive communities and team neighbourhood building to promote relationship development, coaching & mentoring.

• Create appropriate gathering spaces for team get-togethers and informal intimate spaces for smaller group meetings.

• Create settings to support social interaction and events, both formal and informal.

Efficiencies:

• Develop universal planning to minimise disruption through churn.

• Deliver consolidated support facilities.

• Create multi-purpose space to support business and social events.

Environment:

• Manage acoustic conditions to aid productivity: enhance communication, provide privacy, support complex tasks, concentration, reduce speech disturbance and distraction.

• Access to natural daylight.• Fresh air, ventilation and

temperature control delivery to individuals and the wider workplace.

• Appropriate degree of personalisation to the individual work spaces.

• Colour to improve mood, emotion and motivation.

• Offer planting & active growing programmes for employees.

Sustainability:

• Provide a high performance sustainable workplace to increase productivity and wellbeing.

• Enable greater personal control for staff, through technology, over lighting and temperature levels.

• Express the organisation’s vision of environmental issues and positive contribution to initiatives.

• Optimise wellbeing by considering the personal, physical, social, cultural and economic effects.

• Benefit from potential savings on running costs.


Workplace Design | Insurance SectorWorkplace

If this pressure is combined with the anticipated focus of technological initiatives, it is essential to balance the efficiency gains with the proposed physical environment by supporting the business needs, promoting growth and aiding attraction of the industry’s brightest and best talent.

Occupational Densities:Overall densities in this sector are typically 1:10 to 1:12 sqm pp which includes the support facilities and front of house services. The distribution of space within the overall occupancy is usually 75% to 80% work space and 20% to 25% support facilities and front of house services. However the densities on the working floors are typically higher at 1:8 sqm, this is influenced by the design density for the building, based on the design for M&E services, lifts capacity and escape volumes.

The insurance sector have been the widest adopters of smaller work station footprints responding to the traditional work patterns of underwriters who leave the office for large parts of the day and therefore do not necessarily require large working space.

The office based staff require a 1:1 desk allocation to work effectively however the high volume of underwriters leaving the office during the day does offer opportunities for desk sharing. Taking into account the daily absence and typical absenteeism, for holiday, sick and maternity leave, of 20% there is scope to implement a sharing ratio. The average standard currently employed within the insurance industry is 8:10 (desks to people). Evidence based design is the best evaluation platform and by installing sensors to the desks factual data can lead solutions. Ongoing monitoring means levels may be adapted to support fluctuating requirements. Typical sharing ratios range from 7:10 to 9:10. Some users initially occupy at 1:1 and accommodate growth by gradual introduction as required.

Distribution of ‘personal’ vs ‘shared’ space: The balance between personal and communal workspace is changing. Increasing the communal area is a valuable tool to promote team communication and collaboration. Personal space is essential and the major factor in the planning is to achieve the correct balance between the two. By providing the right mix of personal, communal and social areas the employee satisfaction and enjoyment of the office is greatly improved. We know that the profile of space in the workplace is changing, it is no longer fixed and the boundaries are becoming increasingly blurred.

In the current economic environment, there are often pressures to increase efficiency and control costs.


Workplace Design | Insurance SectorWorkplace

Broker Lounge: The City of London insurance market has been built on face-to-face negotiation and collaboration and is still at the core of the market. A valuable asset for many insurance firms is the inclusion of a Broker Lounge within their facilities. A front facing provision, which is easily accessible whilst giving staff security and control, is an ideal opportunity to express the brand, vision and culture of the firm.

It should provide a variety of meeting options, ranging from open collaborative sessions to smaller private conversations. The broker lounge should be supported by a high standard of hospitality and technology. The location should be highly accessible and visible to promote use and encourage quick catch ups, short meetings and open opportunities for chance conversations.

Front of House Client & Visitor Meeting:Strong business relationships are formed through frequent interactions and the client meeting facilities are an important part of this process. These relationships are essential as face-to-face interaction occurs in every stage of the trading process.

The client meeting rooms are an important facility and should be equipped to support the operational requirements for the business as well as reflecting the brand and mission of the firm. This would include presentation facilities, video conference and tele-conference in addition to the face-to-face meetings.

In an economic climate that demands efficient use of property, consideration should be given to the functionality of space and design to maximise use. The meeting suite, for example, could incorporate moveable walls to allow the suite to convert to larger meeting areas for town hall meetings and briefings.

Staff Catering: Health and wellbeing is an important factor in the design of a productive workplace. Wellness in the workplace can help to increase productivity, reduce days lost through sickness and underline the importance an employer places on the wellbeing of its employees. The traditional staff dining facility is declining. In part because of all the variety available immediately outside the office but also the demands on space utilisation within the premises. More typically firms are offering an enhanced central breakout space which can fulfil a number of goals.

This is an excellent opportunity to redefine the offer for staff. It can be an introduction of healthy eating initiatives by offering free fruit, a way to communicate nutrition programmes, encourage movement by it’s location and it can be the space where people can come together and eat communally, to foster a social society, and is a powerful way to build company culture and stir innovation.

To further maximise the use of the facility, use should be encouraged throughout the day and not just lunchtime. There are a number of functions that can be accommodated in the space including ad hoc meetings, team briefings, break space from work space, quiet zones to read and concentrate. In order to achieve the multipurpose functionality of the breakout it is important to consider acoustic management to ensure that it does not disrupt people working around it and provide a variety of furniture to suit multiple functions and provide technology to allow flexible use of the space. It is an ideal location to add colour and brand to differentiate the space from other areas.

KKS Strategy LLP32-34 Great Peter Street

London SW1P 2DBUnited Kingdom

T: +44 (0)20 7799 8300 W: kks-space.com

workplace trends - kks space · “insurers need to step out from the insurance industry basket and...

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