Insurance Past, Present & Future: Q&A with Paul Tetrault, The Insurance Library

Digital Transformation - November 20 2019

Paul Tetrault is Executive Director of The Insurance Library in Boston, a leading resource for literature, information services, and quality professional education for the insurance industry. Founded in 1887, the library’s collection and services are available at no charge to consumers including students. We sat down with Paul to ask a few questions about the Insurance Library’s collection and mission, how to attract younger talent to the insurance profession, and what the past can tell us about the present – and future – of the insurance industry.

Paul, the Insurance Library has a fascinating and irreplaceable collection of resources related to insurance going back to when the library was founded in 1887. What are some of the most treasured or surprising assets in the collection?

That’s a hard question because this is the kind of place that has treasures and surprises around every corner. The breadth of our collection itself is remarkable considering its focus. For instance, we have the earliest published books about auto insurance as well as the newest articles about cyber liability. We have historical materials including journals that cover the history of society as seen through the lens of insurance over the past century and a half. To offer something more specific, I would say that our collection of Sanborn Fire Insurance Maps, which are huge volumes that would have been used by any insurer operating in the first part of the last century, are always a point of interest for visitors to the Library.

Insurance often gets a bad rap for lagging behind other industries when it comes to innovation, but you’ve made the counterpoint that “insurance itself is an innovation.” Can you explain what you mean?

Sure. An innovation is simply an idea developed and implemented to solve a problem or make an improvement, and insurance is an example of that. The development and application of insurance has meant that risk can be managed to allow all sorts of activities to take place that could not otherwise. In a lot of the discussions taking place over the past several years, there seems to be a foundational misconception that the insurance industry was created over a century ago and has been static ever since, and now it has to deal with this new thing known as innovation. Nothing could be further from the truth. The industry has always been at the forefront of innovation, both internally in regard to its own processes and practices and externally in terms of facilitating the introduction of new technologies in society. 

Your familiarity with the long history of insurance must give you a unique perspective on how insurance innovation has unfolded over time. What can the past teach insurers about their present predicament and the momentum to digitally transform how they do business?

In my view a consideration of the past gives grounds for a quiet confidence that, as a whole, the industry will continue to evolve appropriately to serve the needs of the individuals and organizations that depend on it. Individual entities will make improvements in the way they do business better and faster than others, and that can be a competitive advantage, but it is not the only factor in competing. 

The Insurtech movement is one of the biggest changes facing the insurance industry today. How is the industry dealing with technological change and the need to innovate to keep pace with customer expectations?

At this point I think you’d be hard pressed to find an insurance industry entity – whether a company, agency or service provider – that hasn’t given substantial thought to the potential impact of new technologies and innovation on their organization’s future. Some have more concrete strategies than others, but most have made adjustments and plans. I think the initial era of panic has largely passed and organizations are now doing a better job of figuring out what makes sense for them. As for customer expectations, what is interesting is considering whether the relevant comparison for experience is to other industries or to others in the industry. In other words, does buying insurance need to become as easy and streamlined as booking a hotel, or is it enough to make sure that your customer experience is not unnecessarily complicated and no more complex than your competitors? And while evolving overall, customer expectations are not uniform. A young person may want to engage in relatively simple and relatively non-consequential transactions in a highly streamlined manner, while an older person may be happy with, or even prefer, doing things in a way that seem old fashioned, actually having a face-to-face conversation or at least an extended phone call, when making decisions that have significant financial and organizational implications. 

Insurance carriers and brokers collect mountains of data, but they still struggle to gain the insights needed to accurately assess and price risk. If you had to give the industry a report card, how well do insurers harness “big data” to manage risk today?

I don’t think I would agree with the characterization that insurers struggle to gain the necessary insight to accurately assess and price risk. Insurance has always been a data-driven enterprise and insurers are actively exploring new ways to use new data sources to better refine risk assessment. What I’ve been aware of is not so much inherent limitations on what insurers can do, but reservations among regulators and some who are cast as representing consumer interests about how insurers should or should not be permitted to use data. I would predict there will be ongoing discussion about comfort levels and expectations but also that those things will evolve over time. 

The library, and you personally, spend a lot of time evangelizing the career opportunities that exist within the insurance industry. With the workforce expected to be 50% Millennial and Gen Z in 2020 and more than 95% by 2030, what can insurance companies do to attract younger talent to the profession?

There are many ways to communicate with and engage with students and young professionals to explain the rich benefits of working in this business, but one simple if slightly radical step that I think can make a difference is to stop using the word “insurance” in all outreach efforts.  The word “insurance” carries connotations regarding safety, stability and security that make it seem boring, when in fact working in P/C insurance more often than not is anything but boring. If you use the word, then you have to expend great efforts to overcome that misperception.  The term “risk management,” on the other hand, appropriately conveys both the important function the industry performs as well as a sense of how it is interesting, analytical and proactive.

I also would note the potential power of pop culture and observe that insurance as a career is often unfairly maligned in movies and TV. Now, no one pities the insurance industry and I would not suggest this is on par with something like gender or ethnic underrepresentation or stereotypes, but inaccurate negative portrayals and references surely leave an impression which is something that has to be overcome by those who are trying to explain how insurance is a great industry for a rewarding and meaningful career. To look at it another way, imagine how much impact a great movie or latest HBO or Netflix series that portrayed an insurance career in a positive way could have.

Take out your crystal ball: What do you think the insurance industry will look like in 10 years?

I am confident that in 10 years there will still be a vibrant insurance industry that serves the needs of society as they have evolved over that decade. There will be changes but there will be some things that remain constant. When you look back 10, 20, 30 years or more in industry publications that we have in the collection at The Insurance Library, you can be surprised both by the things that have changed and those that have not. Ten years ago, the industry was trying to determine how it would be affected by the financial crisis, and 10 years before that it was just getting its arms around how to deal with and use the Internet. At the same time, many of the companies and agency names are familiar, as are themes and issues being discussed in industry meetings and public policy debates. The industry in my view has become well accustomed to ever-present change and on the whole can be expected to evolve along with whatever changes take place in society.


PT 2019 Headshot

Paul Tetrault, JD, CPCU, ARM, AIM joined the Insurance Library as Executive Director in January of 2019. Long a fan of the Library, he took Institutes classes there early in his career and has been a patron and supporter for many years. Paul previously served as state and policy affairs counsel for the National Association of Mutual Insurance Companies, responsible for public policy development, legislative and regulatory issue management, and legal analysis in support of NAMIC’s government affairs activities. Active in the CPCU Society, Tetrault is chair of the Society’s Regulatory and Legislative Interest Group and a member of the Society’s Publications Committee, as well as a member of the board of the Boston Chapter. He is a recognized thought leader on public policy issues involving the property and casualty insurance industry and is a frequent contributor to insurance trade and professional publications such as National Underwriter/PC 360 and INSIGHTS: A Professional Journal by the CPCU Society. Prior to joining NAMIC in 2005, Tetrault practiced law focusing on litigation defense and insurance coverage issues. He previously served for many years as editor of  The Standard, New England’s Insurance Weekly. A graduate of Villanova University and Suffolk University Law School, Tetrault is a member of the bars of Massachusetts and the United States Supreme Court.

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