Other parts of this series:
As insurers focus on growth to improve their profitability, we have been examining pitfalls that management can easily fall into that would leave their organizations less than fully optimized to reach their growth goals. Significantly, executives at companies worldwide are misaligned with one another at their own organizations on growth priorities. But they are united on one topic: Reaching their goals will require investing in digital technology.
So what should insurer management do to optimize their organization’s growth potential? We recommend three steps designed to avoid management misalignment, ensure that the best growth strategy is selected and make digital technology investment a top priority:
Organize for growth
This is a multi-step undertaking. The first step is understanding where growth is coming from for your organization and then developing a long-term growth strategy.
To shape a strategy, an insurer must first sort out a few things. One is defining its goals and aspirations. This will involve, among other things, understanding its core values and how they will support the organization’s growth agenda; parsing its current role in the industry and how industry convergence will likely alter that; and developing a long-term vision in response to disruption.
The insurer then will need to determine where to play in the industry. That involves determining which customer segments to target, which channels to use to reach them, which products and services to offer that can respond to rapidly changing customer demands, and in which locations it should go to market.
The game plan is next. The plan must define the insurer’s value proposition and how that can be differentiated from existing and new competitors. It also must consider how the insurer can drive both organic and inorganic growth; identify strategic partners in an ecosystem in which collaboration can support the insurer’s growth agenda; and outline a performance plan, including objectives and goals throughout the organization that are measured and incentivized.
At that point, the organization will need to align its cost-reduction activities and its decisions about where to reinvest those savings to its growth strategy.
Manage the journey
Insurers must avoid or overcome misalignment on growth objectives and cost management among leadership and build buy-in across the organization. That will necessitate leadership support, which should be data-driven to both align senior management and identify resistance early. Resistance should be addressed with a tailored intervention plan designed to overcome issues or identify viable alternatives. The growth plan should be rolled out in manageable phases, which makes realizing value quickly an easier path and should help future rollouts go smoother and faster.
Maintaining buy-in along the way will be critical so alignment does not slip. Senior management will need to communicate the insurer’s growth strategy to all stakeholders, the value drivers of change, the phases of the plan, and its outcomes.
Proper governance, including a dedicated business transformation team, will help sustain growth and guide all future cost-takeout initiatives.
Digitize to fuel sustainable growth
Digitization can increase an organization’s agility and flexibility, helping it achieve sustainable growth. We recommend insurers take several steps to shape their digital future.
A key step is preparing for industry disruption by using digital analytics to understand how and when disruption will have an impact on the organization. Insurers also should use data beyond informational purposes, turning it into new products, services and better customer experiences. With digitization, these offerings can be introduced into the marketplace far more quickly than before. Insurers also should consider digitizing their non-core activities.
Management also should build organizational speed by developing digital intelligence from top to bottom. The C-suite should drive new digital growth through a team of digital leaders who are laser-focused on digital technology with the support of digital “fixers” who can draw on the right skills at the right time. To build an organization’s digital intelligence, senior executives can be paired with younger digital mentors.
We also strongly recommend digitizing traditional front- and back-office functions and capabilities to increase speed and agility. To acquire missing digital capabilities, insurers could make the needed investments or work across their partner ecosystems.
- To learn more about generating growth, download Increasing agility to fuel growth and competitiveness.
- To learn more about digital technology in the insurance industry, download: