The people side of pricing

SINA THIEME: Hello, and welcome to (Re)thinking Insurance. I'm your host, Sina Thieme, and today I'm delighted to be joined by my guest, Chus Guitard. Thank you for joining me, Chus.

CHUS GUITARD: Thank you, Sina. Happy to be here.

SINA THIEME: You are a director in WTW's insurance consulting and technology business and have been involved in insurance analytics basically for your entire career, right? And you're also a true believer in people being the most important part of a business, you said to me earlier. And that's exactly what we wanted to discuss today, the people's aspect in insurers' technical functions and in particular in pricing teams. It feels like that's a pretty underrepresented topic, so I'm quite excited.

I think we'll get into the challenge of wanting to have a team of innovative and clever outside-of-the-box thinkers on one hand, but also obviously needing to keep them motivated during more mundane and boring tasks. We'll talk about diversity in teams. We'll talk about different skill sets and also about how technology can boost talent retention.

Before we get into that, first, let's find out a little bit more about our guest. So, Chus, when searching for your name online, I can see lots of results come up in relation to WTW. I can also see triathlon results come up - is that you?

CHUS GUITARD: Yeah, Sina, so on my free time, I say that I do triathlon and this year, for example, in the Spanish championship, I actually got in first place for my group age. So officially, I think I'm the Spanish championship of half distance triathlon right now in Spain, which I'm really proud of.

SINA THIEME: That's crazy. Congratulations.

CHUS GUITARD: Thank you.

SINA THIEME: So when technical functions tend to be quite focused on data and analytics and might not always realize how important the people aspect is, so Chus, what makes you feel like this is an important topic and why specifically in insurance pricing?

CHUS GUITARD: Yes. So I think it's a really important topic because one of the most common things that we hear right now in the market is how skilled actors are in a really high demand. They're really valuable assets for a company. And they're a resource that's really complicated to retain. And they tend to be profiles that they're always looking for new things to satisfy their curiosity and their willingness to innovate. And this becomes really relevant in such a rapid development environment and market that we see within the insurance world.

They want something more than just a paycheck at the end of the month. So being aware of why this people side of things is relevant-- because it's mainly the key to make sure that you retain this talent. So this type of profiles are the driving force within our market. People, essentially, are always going to be the driving force, but specifically in pricing because of the skilled assets that they provide to the company. They're really, really relevant.

And it becomes even more important to retain them because they're never going to be able to be profiles that you can replace easily. So making sure that you have them within the company, you take care of them, you look to what their worry, what they want to do, what their professional career is going to become, that becomes really, really relevant right now within the pricing side of things, because at the end of the day, what is a team without its members?

Also, it's really important within a team to make sure that we can attract the most important profiles. And when we were talking to different companies about this, one of the companies that we spoke to, what they shared with us is that right now, for example, they're looking for data scientists within their pricing team. So they want people that they don't just have the actual capabilities, but that they also have data scientist capabilities. And these are very complicated profiles to find.

And it's because it's with these profiles that they're aiming to sophisticate their pricing right now. So again, if we don't cover the people side of things but we have a really ambitious sophistication path, we're going to have a huge gap between what I want to do, but the resources and capabilities that I have to do so.

Another lesson that this company was sharing with us when we talked about it is that although-- probably to those like me who are pure actuaries, we feel pricing is the most exciting thing in the world. But when you talk to these type of profiles that have more data scientist capabilities, they've recently graduated from uni, they've literally grown up within their university years with Python, R, and all the open software out there, they think pricing is probably not the most interesting thing, and they want to get involved in other stuff as well. So making sure that we look into the people, we understand what they want, and we balance that out so that we can get the best out of them and they're happy with whatever they're doing, that becomes really relevant.

So if I were to reduce it in one sentence, people side of things and specifically in pricing, it's just essential, because if we want to have teams that allow us to sophisticate whatever we do in pricing and that are able to guide us through whatever roadmap any company has within its pricing sophistication, we need to have a team that is engaged. And to be engaged, we need to take care of the people.

SINA THIEME: So you mentioned a few points there on the challenge of retaining people by not listening to what your people want, by not giving them enough freedom or technology to innovate. Where do you think companies have been going wrong, just generally?

CHUS GUITARD: Yeah. So again, we're lucky that we get to see lots of companies and how they've built their teams. I think one big struggle right now is that teams are starting to be a mixture, as I mentioned earlier, of different capabilities within different people. And for example, it's a good mix right now to have data scientists and actuaries, for sure. That is a really powerful mix. But what we're seeing is there's a struggle within teams to devote time to tasks that they don't find that interesting.

So, for example, data handling is one of the areas where everyone is aware of how important data is, but no one wants to sit down and have to fight with data. And many times, the data companies have-- it's just based on legacy systems. They have data coming from all different places. And being able to have that in a manner that you can then explode all that data somewhere else becomes really relevant but a really not satisfying job of the person that has to do that.

So having that task not being automated, not devoting the actual people with the right capabilities to those tasks so that you actually don't burn out the people that they might not be really good at data handling or data cleaning, but you have them doing that task, and it just-- it burns them out, and that kills the feeling they have that they're adding value to the company, the feeling that they might be looking for that they're doing innovative stuff. So that's one key area that we've seen in many places.

Also, having old technology, it does not motivate teams at all. And having dependencies over IT, we've also seen that it has been a big struggle within teams because lots of the dynamics that companies want right now, specifically pricing teams, is if I develop this really cool model that is really predictive, I understand it, I understand the trends, and I want to put it into production, I can't be waiting five months for my IT to do this, or I can't wait for IT to say that they can't put it into production because there's a limit to the variables that I can put in the system. There's a limit to the granularity of things that I want to put into the system. So these things, although they might seem minor, they're things that they do affect the people that work close within the pricing function.

As well, we've also seen clients-- and this is really linked to the technology-- that when they've acquired systems, for example, such as Radar Live, they've literally told us that one collateral effect that they were not expecting is that their retention was improved. And when they talked within their teams, they learned that it was because they felt that they had much more flexibility. They were able to innovate within every single model they were doing, how they wanted to deploy it. All the actions that they wanted to take, they could immediately do it.

And that actually led to greater team satisfaction, which is really good. And it's something that we should always keep in mind. A satisfied team is always going to want to retain. And if they have a sense of belonging, which usually a satisfied team is going to have it, it will ensure that your retention increases, and it's much better.

Also, another thing that we've seen which is quite frequent is that, as I mentioned earlier, we're seeing clients building data science teams or advanced analytics team, whatever name we want to give it. And instead of actually working together, we're seeing that they're-- I don't want to put it as they're fighting, but they are fighting at the end of the day. So there's one team that wants to work with open software. There's another team that wants to work with whatever actual software they have because that's what they understand. That's what they're comfortable with. And instead of getting and harnessing the best of both worlds, they're each trying to force the use of whatever they want to use.

And that's not how we feel they should be doing. They should be working together. They should be harnessing the best of each of the different teams because that's where the power lays right now. We know that actual teams, they have great market experience. They understand the market. They understand the business. They understand trends. They understand variables. And then, on the other hand, we have data scientists, which they understand data, and they're really capable of thinking out of the box and creating amazing models.

But those amazing models are never going to get anywhere if you don't have someone, which will be this actual expert, that can guide you to what's really relevant within the market. So I think that's also something that lots of people are getting wrong right now. And because of that constant fight within the teams, it's being harmful within the retention of really skilled profiles that guided towards an objective of working together against working against each other would be really, really beneficial for the company and the team as a whole. And again, the underlying benefit would be you retain your people, you have your people motivated, and you're capable of building a strong actual pricing with data science capabilities to keep moving your business.

SINA THIEME: All sounds ideal, right? So you keep your people happy. You keep innovating. It's good for your business. Sounds like that's exactly what best practice would look like. I know you've done a number of projects related to this topic with insurers. What have you seen in those projects? How have you helped clients with that challenge of retaining people in pricing teams?

CHUS GUITARD: Yeah. So I guess I like to put in a way of, What would the dream team look like? Or what would the actions to be able to have a dream team look like? And learnings that we've seen from helping clients and from talking to them is that, first of all, it might not be useful to have a data scientist team working across all the different loves of the company. And if that is a team-- and it's fine to have a team like that-- you should have specific people within that team devoted to pricing, because at the end of the day, it's going to be really different the tasks that you need to get out of those people and the tasks that the rest of the team should be providing the rest of the different areas of the company.

So mixing those different profiles is key, but ensuring that those profiles stick to the pricing side of things. As I mentioned before, making sure that it's not a fight. It's working together in the same direction and playing as a team. As you mentioned before, I do triathalon. Triatholon seems to be an individual sport, but at the end of the day, it's actually a team sport. I need my team members to make sure that I improve, to make sure that I'm better. And that's essentially what any team should always be aiming at.

Actuaries, as we know, they're going to be able to provide all the business value, all the expertise, all the judgment. And data scientists, they're going to be really great at building models. So valuing what each person can add to the team, that's essential, and that's what's going to allow them to get the best out of all of them and retain that talent.

I know when I say it, it becomes really obvious. That's what everyone should be thinking about. But on a day to day basis, it feels like we just get lost on the daily tasks, that we need to get this report out, we need to get this model out, we need to get this into production, and we tend to forget about the people that are doing that. Are they motivated? Are they doing things they like? Are they engaged? Are they understanding the value that they're adding to the business? Or are they just kind of like robots filling in or developing, training different models, which they don't even know where they're going to be implemented?

It's also really important to keep in mind that we're probably the first generation that has three different generations within a company and within a team. This is also a conflict that we've been seeing. On one hand, we have all the new kids on the block, to put it in a way, which are the people that just got out of uni. They have full control over coding in different softwares. And because of that, they're really-- for them, it's really easy to learn different coding languages or just to do things within the coding language they understand.

And within that skill, absolutely, they're superior to people that might have been in the company for ages, but they lack the knowledge of the business. And sometimes what we see is that these new kids that enter the business, they want to change the world, which is brilliant, and that energy, we should drag it along through the rest of the team. And it's just really energizing to see people that want to change the world that enter different teams.

But it's also really important to make sure that we don't forget to harness the value that can be added by those people that have been in the business for the past 30 years. They might not be able to code in whatever system. They might not be able to be comfortable using the new technology. But, for sure, they know the business better than anyone else. And if you give them results, if you give them trends, if you give them data, they're going to be able to spot lots of really significant insights in 30 seconds and insights that may be really cool models or really cool technology would have not caught just because technology is only going to be focused on the data. It will never give you that expert judgment of someone that has been in the business forever.

So I think having teams, pricing teams, that are able to understand the power that each profile brings to the team, and they're able to coach and mentor each other. So when we think about coaching or mentoring, we always tend to think about a senior person mentoring a younger profile. But this should actually happen both directions. We should have the older or more senior person for sure helping, coaching, mentoring, and teaching the younger person. But the younger person should also have the mindset of, well, how can I ensure that all these cool things that I want to do, this senior person can understand them so they can actually buy into it if they think that it adds value? Or if they think that, for whatever reason, because they do know the business better, they don't see any benefit on it, they can guide me towards something that could add benefit.

So I think this is something key. I think it's also something that is many times forgotten. Many times we see senior profiles within companies as profiles that don't add value, and we kind of leave them in a corner, and we don't listen to them. And there's so much value in those profiles that we should be taking into consideration.

Additionally, one thing that we've seen for clients when we've worked with them in these type of projects or they've asked us for guidance is that they really value that-- because we're such a big team-- so ICT as a whole, it's a huge team worldwide. The type of challenge that we can give them to what they're doing many times is really valuable to them because companies tend to be doing things as they've always done it. So having someone from outside coming to them, challenging, asking questions of, Why are you doing it this way? Why could you do better? Or have you thought about this? Or have you thought about this other thing? that really helps them.

And again, it helps them, for sure, within the technical things they need to do in pricing. But it also helps to engage their team because they get to get different points of view from people outside their team, which are going to challenge them differently. And they're going to make sure that they keep learning. Many times when you're in a company, you might not have a way of learning unless you talk with someone abroad or from someone outside your company. And that's also something that we are providing clients when we talk to them on a day to day basis. And we just understand what they're doing, what they could be doing different.

So it's always where-- we're always really happy to help. To me, as I mentioned, this is one of the areas that I really love because it's really linked to people. It helps getting people engaged. It helps making sure people wake up every morning knowing that they have something that adds value, knowing they have something that they can do which is going to support the company and that they have something that really motivates them every morning, because it's new, it's interesting, it's innovative, and that's just a really cool thing to keep in mind when we're working with clients.

SINA THIEME: That's a great last sentence Chus, thank you. Thank you for joining me in this, for sharing your thoughts, and spending time with me on the podcast.

CHUS GUITARD: Thank you, Sina, for having me.

SINA THIEME: And thank you to our listeners for joining this episode. If you're particularly interested in the automation and the new technology angles that Chus mentioned, we've done a number of episodes on how to make processes more efficient and what new technology products can provide. So have a listen. Otherwise, please join us on any other episodes of (Re)thinking Insurance.

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