As I’ve established in earlier blog posts in this series about the Accenture 2015 Global Structural Reform (GSR) Study, GSR regulations are adding further complexity to a landscape already beset with macroeconomic and industry disruptions.
There is no one solution for responding to this challenge, but here are three principles to help insurers extract greater value from the investments they make:
1. Organize a long-term response
Institutions need to think end-to-end across regulations, legal entities and geographies, and be holistic in assessing and communicating impacts across the operating model to make smart investments and avoid multiple, competing projects. Ninety-six percent of our survey respondents cited the definition of a clear strategy and objectives as important to driving an effective response.
2. Unlock potential in a new ecosystem
Remaining competitive and viable in the long term will require insurers to identify and capture the potential for innovation and improved financial performance provided by the new ecosystem. Possible responses might include:
- Aligning global capabilities with local capabilities
Among our respondents, 57 percent indicated they will tailor their geographic footprint in the next two years. Fifty percent intend to divest geographic units, or relocate their headquarters or business units.
- Aiming for market-driven specialization
Institutions can address competitive challenges by focusing resources and attention on certain customer, product, or geographic market segments.
- Focusing on compliance and efficiency
Reputational risk could be a competitive advantage in the future, with clients and customers drawn to firms with strong ethical reputations that are also efficient in meeting their needs.
- Thinking with an innovation mindset
Institutions should keep pace with, or even outpace, niche providers in accessing the revenue streams that reflect the needs of today’s customers or clients. Sixty-two percent of our survey respondents plan to launch new products or services within the next two years.
3. Demonstrate value to key stakeholders
The value of GSR can only be realized if planning is effectively adopted throughout the business. As firms move past initial compliance, further tuning of the new operating model can help retain engagement and support from internal and external stakeholders.
Time for bold, strategic thinking
GSR is much more than another set of regulatory requirements. To help their institutions remain competitive and viable for the long term, senior management should approach structural reform with the same bold, strategic thinking as they are using for other industry challenges.