It is time for insurance companies to take bold measures with long-term effects and resilience in mind.
As I mentioned in earlier posts in this series, the insurance industry is facing increasing levels of disruption – according to the Accenture Disruptability Index, the industry is in the volatility period. Insurance companies are also constantly meeting customer expectations, such as a new focus on sustainable development.
Most industries during this period of disruption, including the insurance sector, are well established and rich in assets. However, organizations in these sectors tend to lack the agility or appetite for risk required to compete with newcomers. These newcomers often interfere at the product and service level rather than compete across the entire value chain.
Disturbances are effective in three ways. They:
- Deliver innovative products and experiences to consumers.
- Break down sitting defense and entry barriers.
- Dramatically lower prices through new cost structures.
It's time to adopt a new strategy
Insurance company Facing this reality must be bold. It is not enough to protect your position and trust what has worked in the past. You have to face interruptions. If you are looking at long-term effects, you must reallocate financial resources, innovation and talent resources.
I recommend that you approach a pivot from three angles:
- Transform the core . Invest in activities that facilitate margin and capital efficiency improvements. Think about your assets, processes and people.
- Grow the core . Invest in going to the top market to expand and grow the core product suite. Think about product extensions and the geographies they serve.
- Scale ' New . & # 39; Invest in new products and services and their delivery. Explore new product markets and business and participant models. And look at how you can use sustainability development as a tactic.
Insurance companies do not have to go alone
Ecosystem partners can provide access to technology, capabilities and specialized talents to help you respond to disruptions in innovative ways and at scale. But choose partners carefully. They must have the right ethos, collaboration, customer focus and incentives to supplement your position. If you work for sustainable development goals, it is especially important to make sure ecosystem partners are aligned in the same way.
A wise pivot does not just mean improving efficiency or adding a mobile app to give customers better and more personalized experiences. Cautious moves are not enough. Insurance companies that have the courage to face disruptions and achieve sustainability by swinging on their own terms will be in the best position to meet customer requirements and increase market share.
In my next post, I will take a closer look at what we means with competitive agility.