Other parts of this series:
Insurers that embrace change gain greater benefits from their digital technology investments than their more cautious counterparts.
Caution and stability have been the hallmarks of the insurance industry for centuries.
It’s not surprising, therefore, that in the face of looming digital disruption many traditional insurers are being cautious. They recognize that their markets are changing and are often prepared to invest heavily in digital technology. However, they’ve made only modest adjustments to how they conduct their business.
However, a few insurers have leaped at the chance to change. They see digital disruption as an opportunity to take the lead in a wide range of new, potentially lucrative, markets. They’re investing in digital technology to transform their businesses and create new sources of revenue from closer ties with their customers and strategic partners. These progressive insurers are already reaping the benefits of their bold approach to change.
Our recent Change Survey shows that insurers that embrace change are gaining significantly greater benefits from their investments in digital technology than their more cautious counterparts. These “change leaders” have especially outperformed other insurers in efficiency improvements, risk management, regulatory compliance and the roll-out of digital products and services.
Our research identified around 30 of these change leaders among the more than 290 insurers it surveyed around the world. It found that 96 percent of these innovative firms achieved the change benefits they expected from their investments in improving efficiency and cost control (See diagram below). What’s more, 87 percent of them gained commercial benefits from these initiatives. In contrast, only 65 percent of the other insurers attained the change benefits they expected from such investment and 69 percent reported commercial benefits from this spending.
The change leaders differ significantly from most insurance firms in their response to digital disruption. By learning from these front-runners, other insurers can make better choices about how they’re going to transform their businesses to compete in the new digital economy. Such transformation is essential. What’s more, a close look at change leaders in their industry will help insurers close the gap on these firms.
Some of the key features of the change leaders include:
- A culture that embraces innovation and transformation. This enables them to be more agile and better able to manage continuous, rapid change.
- A well-defined digital strategy. A clear vision of the changes that are needed, together with a firm commitment from the organization’s leaders, ensures that transformation goals are attained, on time and in budget.
- A strong change capability. Effective change teams, supported by the correct methods, tools and governance systems, together with robust strategic partnerships, enable organizations to quickly seize new opportunities and avoid potential pitfalls.
In my next blog post, I’ll discuss the forces that are compelling insurers to alter their business models and why they must change quickly. Until then, have a look at these links. I’m sure you’ll find it worthwhile.