Before their 1946 rematch, heavyweight boxing champion, Joe Louis, said of the lighter, more mobile Billy Conn, “He can run, but he can’t hide.” When it comes to managing change, the same can be said of the personnel and teams responsible for supervising insurance operations. Re/insurers can run from the onset and inevitability of change in their operations, but never fast enough. And they certainly can’t hide. They can, however, cope with change. And with enough vigilance and foresight, they can anticipate and even embrace it.
Case in point: Many insurance organizations used to be comfortable with awarding large, complex operational transformation projects to one consulting or service/technology provider. Given the pace of change and the potential for risk to escalate commensurately, a consolidation of eggs in one basket is much more untenable today. In the current ecosystem of re/insurance service providers, jacks of all trades are sometimes masters of none, and the ability to switch away from ineffective consultants or service/technology providers makes good business sense.
Accordingly, specialization is on the rise. Consultants and providers who are expert at this, aren’t necessarily expert at that. So, discerning re/insurers will increasingly hire partners that possess specific experience and expertise, plus the proven abilities to deliver and transfer knowledge effectively.
Agility is Mandatory
It’s no secret the insurance industry faces a steepening decline in human and intellectual capital with an aging workforce. That challenges the industry with the increasing pressures posed by technology, regulations, new competitors, heightening policyholder expectations for digital sophistication, together with increasingly stringent mandates for cost control.
All this suggests the industry must persistently evaluate its operating models, in addition to fortifying its sources of applicable expertise. Keeping pace — let alone sustaining competitive advantage — progressively requires new sources of ingenuity and agility. Meanwhile, in-house staffing initiatives may struggle to find the necessary talent in requisite numbers, not to mention the expertise to harness and create positive disruption.
The following two deceptively simple steps are among the most constructive ways re/insurers can embrace change, and ensure positive business outcomes:
- Re/insurers should clearly define and continually refine objectives while understanding and aligning those objectives to strategic processes and challenges. As we suggested in an earlier post, if insurance organizations don’t know where they’re going, any road will get them there… or nowhere.
- To correspond with evolving objectives, insurance organizations should deploy an adaptable operating model. And they should be willing to combine their operational data with data from the industry at large — to better anticipate and accommodate changes in technology, processes, economic conditions, market opportunity, consumer demands, and more. Meanwhile, the focus of adaptable target operating models should be on leveraging the data, technology, and process benefits to drive efficiencies for their policyholders, distribution partners, and employees.
Technology changes. Generations change. Market opportunities change. And, so do consumer demands, work habits and expectations of employees. Same with operating models; they change too. We should always be prepared to assume everything changes. Knowing and accepting this truism is often half the battle. And strategic success frequently depends on managing change constructively.
For re/insurers, the best criteria for defining success are operational outcomes. For our organization, defining success is embodied in the deep industry experiences we have and the insurance expertise we require and nurture in our teams. At Xceedance, we combine profound domain knowledge with the willingness to remain adaptably current with processes and technologies. And we leverage those attributes to ensure the operational fluency of the re/insurer businesses we serve.
Click here to learn more about how Xceedance supports adaptive target operating models to anticipate change and helps re/insurers respond to industry fluctuations.
Travis MacMillian is the chief business officer at Xceedance.