Carriers need to review their long-standing orthodoxies and find new ways of reaching and serving their customers.

Outdated approaches to business often block big insurers from adapting to the changing needs of their customers. As a result, more nimble and responsive competitors, many of them newcomers to the insurance market, are eroding their revenues.

To turn the tide and become change leaders, traditional insurance providers must look at shedding some of their long-standing orthodoxies.  They need to find new ways of reaching and serving their customers. What’s more, they must provide these customers with an array of innovative products and experiences tailored to meet their individual requirements and in order to do so pivot to more agile ways of operating.

Such a transformation can only be accomplished if insurers put digital technology at the heart of their businesses. It can no longer be peripheral to their main activities.

To re-engineer their organizations, and put digital technology at the hub of all their critical business initiatives, insurers need a clear vision of where they’re heading clear vision of where they’re heading as well as articulated view on how to drive value by transforming and scaling their core business. Unlike traditional vision and mission statements, these new guides to the future of the organization must be highly flexible. They should evolve and adapt to insurers’ changing challenges and opportunities in the digital environment. Successful strategies can easily become new orthodoxies. Agile insurers constantly review their performance and jettison practices that are no longer effective. Their vision is a source of inspiration not a distant destination.

Nearly all the change leaders we identified in our recent global Change Survey have a digital capability that stretches across their organization. Many have formed specialist units to accelerate the roll-out of digital services. These progressive firms, insurers that are gaining far greater benefits from their investments in change programs than their more apprehensive counterparts, tend to emphasize long-term thinking and partnerships with digital innovators (see diagram below).

Insurance change leaders are more strategic in their approach to digital technology

The most effective corporate visions are constantly championed by the organization’s leaders and engage a wide range of workers.

New digital technologies, and techniques such as design thinking, prototyping and customer experience development, enable business leaders to encourage workers to share and test ideas early in the change process. Participation in the further reiteration and refining of these ideas can improve the performance of workers and encourage greater communication and co-operation.  Fifty-seven percent of employees at the change leaders we surveyed said most employees at their organizations were optimistic about change, compared to only 42 percent at other insurers. Nearly 90 percent of people working at change leaders agreed that their companies thrive on change. Only 54 percent of workers at other insurers said the same about their employers.

In my next blog post, I’ll discuss one of the biggest challenges facing insurers embarking on major change programs: balancing investment in new digital ventures with spending on traditional core activities. Until then, take a look at these links. I think you’ll find them useful.

Insurance Change Survey 2017: Lead in the New.

Professionalizing Change in Financial Services.

Join the Revolution: Agile Change Revolution in Financial Services.

 

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