A think tank of senior risk engineering professionals came together in a recent forum co-hosted by Risk Solved and expert.ai to share their experience about what is happening in a rapidly changing environment.
Top of mind topical issues
The digital journey is a marathon not a sprint
The Risk Engineering community is still on a journey and businesses are at varying stages. Manual processing is still a challenge and switching to digital means taking everyone along on the journey. Risk Engineers can spend 8 hours writing up reports after surveying.This is a complex area that boils down to answering the question, how can I capture data efficiently and effectively?
Cost of Living Crisis and ESG risks
A combination of factors is raising concerns. Inflation is exacerbating the underinsurance risk together with a Covid lag. There is evidence that fraud and anti-social behaviour is increasing and leading to claims. ESG is a broader issue redefining the challenges for insurers.
Resourcing – the perfect storm
Research conducted by Richard Thomas identified the size of this issue across the industry. Headcount is expected to reduce by as much as 40% over the next five years.
It can feel like a full-time recruitment role which is a distraction, can be disruptive and affects morale and confidence. The reasons are varied, including retirement, poaching and salary inflation.
The bell graph is skewed to an age group in the 55+ category for a highly skilled role where ‘judgement’ is held as a key ability. Targeting and attracting the next generation is key. Some are using the government apprenticeship scheme. However, the training timeline varies depending on who is being hired and can be as much 24 months to be fully productive. A broad range of skills is required. As well as judgment, other core skills include, communication and negotiation.
Creative thinking is required to mitigate the challenges. Covid has in some ways accelerated and allowed change. There is a drive for a more diverse group including, retired, international, disabled and a broader demographic in general to fill the gap.
Data – Increasing demand
There is an increasing demand for data - but how do you identify the wood from the trees? Extracting data efficiently and effectively from existing sources such as historic survey reports, EXCEL spreadsheets, and other hard copy material is hugely valuable as it provides enhanced insights for underwriters and customers.
How do Risk Engineers extract value from reports and the variety of information sources available without having to read through everything? The variety of source information is growing exponentially – from Internet of Things (IoT), to drones and AI. The latter is making the headlines across many functions and is already in use in Risk Engineering. There is a realisation that AI-generated insights while they can be enlightening are reliant on what is in the public domain.
Resourcing is the key. There is a need to invest in analysts, but will there be the funding to do this? The big win will be that it will free up engineers to spend more time with clients. To do this will require winning over the hearts and minds of the executive team.
Digital Risk Engineering Journey
The digital journey is disruptive, it’s meant to be, it is about making real, sustainable changes that add value to customers and business stakeholders. According to the group there are five key stages:
1. Attracting and engaging the right people
Especially the “evangelists” who will help bring those who are “on the fence” along.
2. Identifying the right problems to solve
Define a 3-year objective and how that will benefit your business and enhance your customer’s experience. For example, this could be a vision for an ecosystem of risk data sources presented to underwriters, Risk Engineers and customers to improve risk selection and risk mitigation.
3. Maximise the capacity to innovate
It is important to have a clear view of the key stages of the journey, once it starts it will continue as new technologies and solutions emerge.
Using technology to improve or replace existing processes creates more time for experienced experts to deliver value to customers.
4. Learn from failure, but make them small failures
Don’t try to do everything at once, as this leads to project scope creep and failure to deliver any real value. Be flexible to adopt new solutions that appear to offer real value, expect some not to deliver and be prepared to abandon them quickly.
5. What gets measured gets done
Even more relevant in a digital data-driven world. Experience and “gut feel” help but data-driven decisions and objectivity will get people believing in what is taking place as being positive. Successes will include:
• Improved delivery of data for underwriters
• Improved completion of risk improvements
• More efficient utilisation of engineer time and resources
Bringing clients and staff on the journey is the core to a change management process. It is important to sell the high-level benefits and objectives. Namely that the digital journey enables an opportunity to ‘risk engineer’ more and ‘survey less’ – it is essential to beat this drum. Our time is finite and extremely valuable, so it is imperative to use the tools available to aid our work.