Seeing the bigger picture

Seeing the bigger picture

While many insurers say they are confident in their ability to transform their operating models, most also admit that their companies may lack some of the core capabilities necessary to achieve and sustain maximum value from their respective transformation strategies.

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Formulating the optimal strategy and managing change a challenge

A number of respondents to our survey indicated they are experiencing challenges formulating the optimal business strategy and envisioning the ideal future state for their organisations. In fact, more than 50 percent of respondents stated they do not have the capabilities to conduct ethnographic research, which explores cultural phenomena and provides insights into customer behaviour and expectations. In addition, roughly half of respondents admitted their companies do not presently possess the capabilities to develop a sound transformation strategy based either on insights or trends from within the insurance industry or outside of it. 

Further complicating matters is the fact that the majority of insurers also confess their companies lack the change management and transformation skills needed to truly reinvent their organisations to prepare for the coming disruption. It is quite telling that less than half (47 percent) said they were able to organise their transformation strategy into a cohesive list of interdependent initiatives. Furthermore, 42 percent of respondents admitted their organisations lacked the change management experience required to fulfill their transformation agendas.

"Our experience suggests, that companies that do not manage the people impact of change effectively are placing up to 60 percent of their transformation benefits at risk." Andrea McNeill, KPMG in the UK

Tapping into new sources for inspiration

For many providers, the answer may involve tapping into external resources for key activities such as customer analytics or to uncover new insights and ideas to inform the transformation strategy. Ultimately, if they are intent on truly reinventing their businesses, insurers will need to look across their organisations to develop a clear understanding of the many interdependencies at play and then apply a robust change management capability to ensure that all of those initiatives align with the desired future state.

The nine levers of value

This agile framework enables executives to understand both scope of transformation envisaged and relative impacts on the organisation. The process starts with a review of the organisations financial performance targets and an evalution of the potential market, proposition, brand and client options. The nine levers of value also put emphasis on the operational and technology infrastructure and governance, and people and change to ensure that the delivery propositions and the management of clients is cost effective and efficient. 

Questions to consider

  1. What are your organisations 3–5 year financial and strategic objectives and key indicators?
  2. Does the current portfolio of businesses maximise the likelihood of attaining performance targets and strategic objectives?
  3. How should the portfolio of propositions and brands evolve over time to deliver on financial and strategic objectives?
  4. What changes to the operating model can enhance customer/channel performances?
  5. What are your priority business processes to deliver the financial outcomes and a high-performing business model?
  6. What are the priority infrastructure and technology elements that will be required to enable the target business model?
  7. Do you have proper oversight in place to drive the desired outcomes and respect the fiduciary responsibilities?
  8. What leadership is required to drive the transformational change and support the desired culture and behaviours?
  9. What will you measure to monitor progress on strategy, identify issues and enable action when required?

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