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.
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 organizations. 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 behavior 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 organizations to prepare for the coming disruption. It is quite telling that less than half (47 percent) said they were able to organize their transformation strategy into a cohesive list of interdependent initiatives. Furthermore, 42 percent of respondents admitted their organizations 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
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 organizations 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.
This agile framework enables executives to understand both scope of transformation envisaged and relative impacts on the organization. The process starts with a review of the organizations financial performance targets and an evaluation 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