Using analytics to gain an understanding of the disruption caused by consumer change has little value unless the insurer has an adaptive mindset. This state of mind allows its people to make sense of the data, identifying opportunities and challenges.
In Accenture’s experience, there are three elements to this tactic:
Adopting a cross-functional data-driven approach to decision making.
The first step in being able to respond to changes in consumer behavior is deciding that this ability is a strategic priority. This may require a shift from decision making based on “gut feel” toward data-driven decisions. A culture change such as this needs to permeate all levels of leadership, to the point where data becomes the source of truth that informs almost every decision.
Recognizing and acting on challenges at the edge of the radar screen.
There are many examples where hindsight shows the error of reacting too late. In the UK auto insurance market, by the time some carriers acknowledged the threat of aggregators, the disruptive model was well on its way to claiming the lion’s share of new business – while forcing insurers’ margins to dangerously narrow limits.
Embracing the lateral thinking necessary for innovative responses.
To innovate, insurers need to step outside of their day-to-day operational mindset. Most organizations, when confronted by disruptive events and trends, will try to accommodate them within their existing paradigm, which inevitably restricts their perspective and their range of possible responses. Only by stepping outside the paradigm can truly innovative solutions be found that have the potential to take the organization to a different level.
In my next post I’ll discuss the third essential attribute of leading insurers that have the ability to capitalize on consumer change: an agile organization. To read my earlier posts, simply click here.