It’s human nature to want to congratulate yourself for your success, rather than worrying about how it may be undermined in the future. But it’s precisely when you are on top that you should be planning for the disruption that consumer change is sure to cause.
Agility entails welcoming new business models that will complement the old, proven ones. Introspection may yield results, but in traditional industries such as insurance, the answers are often found by looking outside. Microinsurance is one example where the conventional business model won’t work – carriers that have succeeded have done so by adapting the ideas of, or partnering with, companies like retailers, telecommunication providers and even manufacturers.
Accelerate the pace of response
When you have decided what would be an appropriate response to change in the marketplace, you must be able to act swiftly and at scale. Flexible systems and platforms are, of course, indispensable. Acquisition – or, alternatively, divestment – is often the quickest way to associate your brand with the new trend or offering, and achieve a market-leading position.
Foster disruption in-house
A proactive approach to disruption brought about by consumer behavior change is to do as much as possible in-house, rather than waiting for disruptions to hit the market first. This may require you to invest in multiple start-ups at the same time, as some of your projects may have long lead times and some of your bets won’t pay off. Nevertheless, many growth leaders have found that this approach gives them the best chance of developing the businesses and offerings that could win in the future.
Embrace and exploit outside expertise
Consciously or not, today’s consumer has shown a willingness to provide input to the design of the products he or she buys. This not only reduces development costs; it also allows insurers to offer more targeted choice. “Crowdsourcing” is used by a wide variety of organizations to find solutions to difficult problems, allowing them to enlarge the window and let in a greater diversity of consumer as well as expert insights.
So to summarize my last few posts, we know that consumer change is making the traditional insurance business model less and less effective. To succeed in the future, insurers will need to exploit analytics to understand this change, develop an adaptive mindset to plan new strategies and actions, and acquire the agility to implement these actions decisively.
If you would like to go back and read any of my earlier posts on this topic, you can find them here.