Historically, the pace of change has been slower for insurance than other financial services sectors. Insurers and Brokers have not all regarded their change capabilities as a core competence. Instead they have used them to deliver incremental change and smaller projects. But now, faced with radical changes in digital, market presence, operating models, product innovation and customer experience, as well as ongoing regulatory change, this is no longer an adequate response.
Insurers and Brokers wanting to extend their change capabilities should focus on a number of key areas:
- Prioritising the change capabilities needed. A professional change capability might include change leadership, portfolio management, programme management, programme management office (PMO), business analysis, business testing, implementation management and change management.
- Building professional change capabilities. Consider developing the capability through blends of onshore and offshore resources, balancing the load between experienced in-house personnel and the flexible capacity of external partners.
- Developing organisation-wide change leadership. In the past, change leadership roles were a sideways career step or a secondary role; today they are among the most important roles in the organisation and need to be populated with the best leadership talent available.
- Harnessing organisation-wide agility and change capabilities. There are three significant factors in change success: participation, trust in line management and team environment. Embedding change activity as a small part of all managers’ and employees’ roles, and training them to handle change, can help make change the norm rather than the exception.
- Collaborating with strong delivery partners. Collaboration is critical at both the departmental and programme team levels. With the explosion in digital delivery, IT and business change, teams must collaborate even more closely using agile delivery.
- Industrialising the change capability. For many insurers, a key step is building scalable and repeatable “industrial” change capabilities, including business analysis, PMO, business testing and implementation management. This can present a considerable opportunity for offshore delivery—often the change team can be 30-50 percent offshore, creating a significant cost arbitrage. However, the real benefit is using industrialised change capabilities to “work smarter.”
Tools that can enhance change productivity include automated reporting for programme management, Mission Control Suite for implementation management and Change Tracking® for change management. Sourcing change capabilities is also a hot topic across financial services, with options ranging from project-by-project sourcing through to strategic change partnerships and fully-managed services arrangements.
In my experience, strategic change partnerships and managed services arrangements—in particular leveraging offshore delivery and productivity enhancing tools—lead to lower unit costs. They also tend to help spark a different style of change, bringing innovation and pace to the internal team. By adopting partnership models, organisations are targeting productivity gains of 30–50 percent.
Insurers have always faced change, but now change is essential for their survival and growth. By acquiring organisation-wide agility and leveraging professional change capabilities, developed internally and sourced externally from key partners, insurers can professionalise change, drive premium growth and sustainably reduce costs in order to improve profitability.
To learn more, read our new report: Professionalising Change in Insurance