If you’re just joining us, this is the third in a four-part series on how an innovative operating model can help insurers drive growth and improve profitability. You may want to catch up previous posts in the series:
- Part 1: Do you have the right operating model?
- Part 2: Innovation to drive growth and improve profitability
What is an effective operating model?
So far, the discussion has been on the benefits and characteristics of an innovative operating model. But what makes it effective? The key is to align the operating model with business strategy. In this way, insurers can anticipate customer requirements and respond competitively to changes in the market.
Four questions insurers should ask themselves
In defining an effective and innovative operating model, insurance executives should ask four critical questions:
- What makes your company unique?
- How should the company change the way it connects with customers, employees and suppliers, given today’s market?
- How should the company structure itself to enable more effective decision making, especially given that most organizations are increasingly networked and globally dispersed?
- How can the company better penetrate new markets and defend against competitors—without introducing unnecessary complexity?
Core components of designing an operating model
While each insurer has unique requirements and challenges, there are three best practices that should be considered when designing an operating model:
- Keep it simple.
- Map the operating model to business strategy and customer needs.
- Be consistent across business and countries, but maintain flexibility to refine and adapt to local needs.
With all that in mind, what are the keys to success? Tune in next week as we address that to wrap up this series.
To learn more, download Running Your Business for Growth: Could Your Operating Model Be Standing in the Way? (pdf; opens in a new window).