How to Attract and Retain Millennials in the Insurance Industry (Featuring Nick Lamparelli)– Episode 020
In this episode of “The Digital Broker”, Steve and Ryan speak to Nick Lamarelli, the Chief Underwriting Officer of reThought Insurance, as well as a Partner at Insurance Nerds. Nick has worked in the insurance industry for over 20 years in a variety of capacities including broker, underwriter, and analytics. As a partner of the Insurance Nerds website, Nick is passionate about introducing millennials to the insurance industry.
By listening to this episode, you’ll learn:
- How millennials perceive the insurance industry
- How the insurance industry is perceived by the general public
- How the insurance industry can better communicate a positive image
- How millennials are perceived by baby boomers in the insurance industry
- Perceptions versus reality and what needs to change in the industry
- Whether agency technology helps or hinders millennials
- What agencies can do to attract and retain millennials
The Insurance industry is rapidly approaching a watershed period in its history. This industry, like the rest of the world, has been changed by the advent of technological advances which have altered the principles of operations for insurance agencies. This ranges from how employees are recruited, trained and retained to how insurance is marketed to business owners and the greater general public.
In addition to the technological changes, the industry is at a generational crossroad, or “demographic time bomb. The “baby boomers”, born during the period following the end of World War II through the early 1960s, have begun their departure from the workplace to a well-earned retirement. Replacing the boomers are younger generations, often referred to as “millennials.”
For the insurance industry to continue to thrive and provide a valuable service to society, it must find ways to attract and retain top talent from this new demographic which is now taking their place on the professional stage.
Recruiting top talent for the insurance industry has always been a challenge but with the often negative perception that millennials have of the industry, recruiting has become an even larger obstacle. In this episode, Nick Lamparelli discusses what can be done to give millennials a better impression of insurance as well as how agencies can better communicate the value they bring to the world around us. Nick, Steve, and Ryan discuss the steps that should be taken to recruit, motivate, and retain good employees – including changing office policies and culture, as well as ensuring that the proper technology is available.
About Nick Lamparelli and Insurance Nerds (1:36)
Nick has been an insurance professional for over 20 years, having left graduate medical school to get into insurance. He questioned the move and whether he fitted into the industry until he found analytics, which turned out to be his passion. Nick feels it’s his duty to help young professionals find their “fit” earlier than it took him. To do this, he believes the negative stigma that many millennials have of the industry must change. He works towards this goal through his website, podcast, and organization named Insurance Nerds.
Insurance Nerds (www.insnerds.com) puts out marvelous content about challenges in the insurance industry, specifically those facing millennials. They have an altruistic mission to help young people become passionate about the industry and find their place within it. In addition, they help with the looming employment issue facing the industry. With so many insurance professionals nearing retirement, there’s an industry-wide fear of filling roles with smart, bright talent.
What is the perception of the insurance industry by the millennials? (6:40)
Young professionals currently graduating college are coming into insurance with virtually no knowledge of the industry. They generally think of insurance from one of two perspectives – they either believe the industry is “immoral” or they think it’s “boring”.
Insurance as a for-profit industry contradicts the idea of having a community-driven ecosystem, which is what many millennials believe in. The very nature of “making a profit off of loss” is a challenge for many young professionals and leaves a sour taste in their mouths. It can be argued that it is an existential issue because it is the nature of the industry and one that’s difficult to change.
In addition, the media coverage of the insurance industry does not help. Usually, the perception is negative. Media reports on denied claims, rate increases, and record profits but very little on the service provided or the value it brings.
If young professionals had a better understanding of the positive value insurance can have on society, along with the challenges and opportunities that it can bring to one’s career, then many would change their perceptions.
For example, if a student is mathematically oriented, they may find the actuarial sciences used in the industry to be some of the most challenging. If they’re involved in areas of science, there are roles that involve meteorological and geological events, such as ground shakings, flooding, and hurricanes. In areas of product liability, there can be the challenge of predicting the future of products that cause disease or harm and the legalities surrounding them. There are also many rewarding roles for people studying marketing and sales.
The challenge is overcoming this stigma. If young people are convinced that they’re working for Darth Vader, then they won’t be interested or won’t stay in the industry long enough to uncover many of its great opportunities.
Whose fault is the perception that the insurance industry is bad and what can be done to communicate the positive aspects? (12:45)
Some of the “fault” falls on the consumer who doesn’t care much about insurance until they take a loss. They’ll complain on social media about an exclusion in their policy that caused them not to be reimbursed, yet they don’t remember the times when insurance actually did pay off. They only remember the wart. Part of the problem is the consumer lack of education, understanding, and engagement.
Another problem is product-based. Many policy contracts are unreadable or not understandable which adds to the level of distrust in the transaction. Many times a policyholder doesn’t know if they are covered or not in certain situations. Insurance must move away from being a paper contract that’s hard to understand for the average individual. The future needs to look more like what TurboTax has done for accounting and taxes. The future is in digital platforms like Indio.
Another way the industry can attempt to change the negative perception is by extracting the customer from the insurance transaction. Elon Musk is attempting to do this by embedding auto insurance into the transaction process when purchasing a Tesla automobile. We may start seeing this “embedding” of insurance across different industries and products because it can help improve the perception that insurance actually helps the end consumer.
Do baby boomers have a bad impression of millennials? What is reality and what needs to change? (17:35)
It’s no surprise to anyone that many boomers have a negative view of millennials, especially in terms of recruiting, hiring, training and retaining millennials in the workforce. Often boomers will perceive millennials as “job hoppers” who very quickly want the next job, the next raise or next promotion. it is true that many millennials job hop and want promotions quickly but it’s not an accurate representation of the entire demographic.
Many millennials will go above and beyond at work if they can correlate their job to a purpose they care about. When they get behind something they care about, they will often work more than the average employee. For that to happen though, it’s up to agencies to help new millennial employees find the value of their job early in employment. Onboarding becomes very crucial and should help connect a new employee to a greater purpose than just their daily tasks.
Is agency technology a help or a hindrance? (33:15)
The current agency technology is a major hindrance. The younger generations are more experienced and comfortable with technology than any generation before them. With that comes an expectation that technology should be smart and similar to what is used in their everyday lives. Unfortunately, agency technology tends to lag in both ease of use and capabilities. This not only becomes an issue when attracting young talent but it actually can hinder a young professional from doing their best work. Millennials (and the generations younger) are coming out of college able to do predictive modeling. If you put them in front of outdated technology, it can hold them back. This is unlike prior generations who didn’t learn Excel and other technologies until college, if not later.
How can agencies adapt? (36:15)
Engagement is the biggest issue. Agency owners must speak the language of millennials and this takes more than simply adding a game room or foosball table. Agencies should focus on showing new, young hires the importance of their job and it’s greater purpose. Allowing them to understand how they fit into the company, how their work impacts the company, and how their company helps the world around them is the fastest way to get young professionals excited for their job every day. After that, it’s important to provide young professionals with a sense of their career path, even if it’s not totally certain.
This generation is about “experiences” and not getting bored. Creating a rich environment and giving all positions some breadth is important. It’s important for different positions to be able to see what their coworkers are working on as well as what their managers are doing. It’s important to bring them into different meetings. This helps with them finding purpose in their work and also helps improve the skills of the agency’s employees.
In conclusion, it is important to give millennials a sense of purpose and begin to develop what their career path will look like. It’s critical that they stay engaged and feel a sense of purpose.