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Can the insurance sector move at the speed of change?

The Huffington Post The Huffington Post 19/10/2015 Amy Radin

2015-10-17-1445120295-3487568-3170665842_fe2543a145_b.jpg © Provided by The Huffington Post 2015-10-17-1445120295-3487568-3170665842_fe2543a145_b.jpg

Chances are you are presently or soon to be engaged in the annual planning cycle, taking stock of the year and anticipating your goals and targets for 2016.
Annual planning feels anachronistic in a world where businesses survive only by operating at least at the speed of change, and where constant iteration is the order of the day. But annual planning does at least provide the opportunity to take stock and set early new-year's resolutions. It's useful to hit the "pause button," and remove yourselves from daily operational tactics to reflect upon business aspirations and how to make them real.
The fact is, more and more top talent in the startup and technology sectors is taking aim at the insurance sector, and sees it as ripe for disruption. This is obvious in one-to-one conversations I have had recently with senior executives, at incubator demo days and at investor pitch presentations. It's apparent in the intensity of interest in driverless cars, the advances in the sharing economy, the number (and quality) of new entrants who are providing friendlier and more transparent access to insurance quotes than ever, and in the sheer volume of well-funded, highly-valued fin-tech products being developed for the under-40 crowd.
That the insurance sector has a metaphorical bulls eye target on its back should come as no surprise. An outsider not steeped in status quo belief systems about how insurance products are created, how distribution works, how commissions are paid, and how clients are served can easily recognize that as a whole the industry is out of step with consumer wants and needs, the massive shift underway in who controls the economy (hint: it's not the Boomers), and the bigger and newer opportunities technology makes possible. While there are certainly outliers at both ends of the spectrum, and an apparent pick-up in tech investment and experimentation among traditional players, there is considerable room to accelerate digital transformation in 2016. It's an imperative.
So here's the question: Are you positioned to make meaningful progress? Here are principles essential to digital transformation and performance against which to answer that question:

  • The insurance business is about people, not policies. Digital transformation is grounded in client centricity. Is that a "check the box" or do you really practice it? Language is a mirror of a culture and belief system, and so it is when it comes to a company's culture as well. It's hard to imagine that any insurance business referring to its clients - the people who keep you in business - as "policies," "lives" or "gross premium dollars" can claim to be client-centric. What language are you speaking?
  • Time is the most valuable currency. The Return on Time is compounded or devalued by speed of execution. So, what's your sense of urgency? I was speaking with a fin-tech founder recently about the company's branding strategy, and upon seeing his disbelieving look as I shared that it can take six months or a year to develop and launch a brand in a legacy business environment, we cut the cycle for this startup's brand development effort down to a couple of months. And we were left with a high quality, thorough method. The absence of bureaucracy, the sheer will to win, and the focus on getting things done quickly and with quality is an asset whose absence cannot be rationalized away by those who plan to thrive in the new economy.
  • Self-awareness is step one to transformation. Do the insurance leaders you know really get what their position is in a morphing marketplace? As an independent advisor, consultant and angel investor, I see a good swath of startups and thought leaders whose ambitions and actions form a mosaic of trends and oncoming disruptions. An organization lacking collective knowledge and understanding of the insurance sector, including new and non-obvious entrants, will have a tough time redefining its direction. And is the internal response, "Oh, the regulators will never go for that," or are you anticipating the reality of disruptive change that is already spreading across insurance verticals from P&C, to health, life, retirement, and commercial products?
  • What gets measured gets done. And the wrong metrics will suffocate new business opportunities and misdirect resources. Have you challenged the measures of digital success? It's also true that the wrong timing to read what may well be the right metrics will also stifle new business opportunities. If you are not revisiting your traditional scorecards, and paying real-time attention to the business model drivers you want to achieve - vs. merely monitoring and managing to the monthly bottom-line results, the benefits of digital transformation will elude you.

At any given hour, "now" will never feel like the best time to step out of the complexity of daily operations so you can re-frame your business strategy and make digital transformation happen. Aligning people, process, technology and investment dollars is where the re-framing should manifest itself.
And now is a great time, and an urgent time, as you begin to anticipate 2016. The clock is ticking. And the broader digital ecosystem is expanding, faster and faster.
This post is also published in Insurance Thought Leadership and my LinkedIn Blog.
Photo credit: https://creativecommons.org/licenses/by/2.0/

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