Other parts of this series:
- Smart insurers are adopting new business strategies to ensure they thrive on rising disruption
- Strong partnerships provide insurers with the best protection against growing industry disruption
- Platform businesses give insurers a strong bulwark against rising disruption
- Mindset shift helps insurers unlock the value of their platform businesses
Many insurers appear paralyzed in the face of growing disruption to their traditional industries. A few smart companies, however, are adopting new strategies and operating models to ensure they thrive in the new volatile business environment.
Insurance executives around the world are grappling with how best to equip their organizations to thrive in an industry buffeted by accelerating innovation and growing disruption. Many of them recognize the huge threat of such upheaval but struggle to implement sound defenses.
Our research shows that only 20 percent of chief strategy officers (CSOs) at major corporations around the world are highly prepared for disruptive innovation. Among insurers the proportion is even smaller. Just 18 percent of CSOs at major insurance providers are ready for such upheaval.
There’s little doubt that most CSOs are aware of the enormous changes looming on the horizon. An overwhelming 93 percent of those we surveyed expect their industries to be disrupted in the next five years. Furthermore, 80 percent of them believe that new technologies have begun changing their industries during the past five years. Insurance executives are especially aware of the power of pending disruption. Around 94 percent of them expect new technologies to rapidly change their industry over the next five years. While 84 percent reckon such innovations have already started upending their industry.
With awareness of impending disruption so high, why are so few CSOs preparing their organizations for the forthcoming upheaval? Many executives in the insurance industry, and other sectors, seem to be at a loss about how to respond. This stasis stretches across countries as well as industries. To gauge the readiness of organizations for pending disruption, we interviewed 561 CSOs at companies from 10 industries and 11 countries. Around 65 of them work at insurance companies.
What we discovered was that the small proportion of companies that are disruption-ready have very different strategies and operating models from their less-prepared counterparts. They tend to display three key characteristics:
- Ecosystem partnerships. Organizations well prepared for disruption don’t face such upheaval on their own. They forge deep and broad ecosystem partnerships with a wide range of customers and service providers.
- Cross-industry alliances. Disruption-ready businesses forge ties with organizations beyond their traditional industry boundaries. They apply their resources and expertise to become critical components of cross-industry alliances that deliver integrated customer solutions.
- Open and collaborative operating models. Flexibility is a vital defense against technology-driven disruption. Well prepared organizations encourage collaboration among their workforces as well as with business partners and customers.
In my next blog post, I’ll discuss the important role partnerships play in shoring up defenses against rising disruption. Until then, take a look at these links. I think you’ll find them helpful.