I have been discussing the results of the Accenture High Performance Insurer study. In this post, I will discuss two more attributes that insurers must develop to achieve high performance: consistent operational excellence and relentless pursuit of cost reduction.
Consistent operational excellence
This may seem like a given, but it is critical that insurers have standard processes in place. Having rationalized, simplified and streamlined processes in place means that products get to market faster and business cycles are shorter.
Automated and integrated processes increase efficiency and reduce errors. It also allows insurers to concentrate on business strategy and market opportunities, rather than day-to-day activities. Finally, operational excellence implies a continuous commitment to improving and developing the workforce.
Relentless pursuit of cost reduction
Cost reduction is part of every insurer’s activities, but it is important to have an overarching view of cost reduction. Simply cutting costs is not necessarily the most effective or strategic thing to do. For example, investing more in IT or upgrading a legacy system will cost more, but the savings and efficiency that result from that investment can pay off quickly. Insurers must also be open to outsourcing and the cost reduction that this can provide.
Next week, I will discuss the remaining attribute of successful insurers: active risk management. I will also provide some recommendations for how to leverage these attributes for high performance.
Of the attributes mentioned so far, which ones are most in line with your business’s capabilities? Which present the biggest challenge?
Catch up on previous posts in this series:
- Part 1 of 6. Overview of the Accenture High Performance Insurer study.
- Part 2 of 6. Challenges facing insurers: tougher economics and more demanding customers.
- Part 3 of 6. Challenges facing insurers: evolving technologies, altered global market structure and competitive forces.
- Part 4 of 6. Attributes of high performance insurers: effective customer-centric distribution and responsiveness to the market.