We share seven tips about how to use strategic imperatives to facilitate progress in the insurance industry.
The insurance industry is operating within a business climate that is increasingly competitive and complex, and where it is sternly challenged to anticipate and keep up with a seemingly exponential rate of change that impacts virtually every aspect of the industry.
To remain relevant, profitable and efficient now and into the foreseeable future, insurers are re-examining the quality and reach of their customer engagement. They are exploring possible expansions into new markets, trying to expand beyond their traditional roles, and considering the development of new or improved insurance products and models – for individual and commercial customers alike.
How can this kind of rethinking show up in the real world? For instance, regional multi-line carriers may require a more comprehensive approach toward customer engagement as they pivot from personal lines, which are currently less profitable, to more lucrative commercial lines. They can achieve this by replacing standard products with more imaginative and tailored offerings that capture the customer’s interest and drive business growth.
Use Strategic Imperatives to Move Forward in Insurance
Getting a handle on all of this requires insurance companies to establish short- and long-term visions of what success looks like and to formulate specific action plans to make those visions practical realities. Organizations must clearly express those visions in strategic imperatives that state their overarching mission and goals. Those imperatives, in turn, must have tangible manifestations in time- and detail-specific strategic initiatives with well-defined deliverables that contain measurable milestones for tracking progress.
Historically, the industry has come up with strategic business goals and devised solutions to realize them by focusing on big-picture, transformative projects that rely on huge, monolithic systems to get all the work done. But, in the wake of a large infusion of investment capital into the industry, solutions tend to be more specific, so that now insurance companies are focusing on smaller, more granular projects.
The big question looming over this process, however, is: How do you develop these strategic initiatives at a level of executable granularity so that they align with a company’s strategic objectives, make for coordinated, synchronized action by the corporate team members charged with carrying them out, and are true to the corporate mission?
There is a template for this, contained in seven basic steps, cumulative in nature – one building upon the next. You can customize each step according to your company’s particular vision.
1. Involve Key Stakeholders from the Start
Bring all the key stakeholders – including corporate leadership, Line of Business heads, Actuaries, Underwriting, Claims, Billing IT leaders, and team members – into the process at the start. Soliciting their contributions to the process encourages strong buy-in from the people you tap to execute it. In the insurance industry, Line of Business Leads are, perhaps, the most critically important stakeholders, while the principal project team stakeholders would come from the commercial, underwriting, and claims departments.
2. Align Strategic Initiatives with Strategic Objectives
The strategic initiatives you identify must support your company’s overall strategic objectives. Tell your people, in clear and compelling language, what these initiatives are and how they accomplish those objectives, so employees see the obvious connection between the two.
For instance, it’s sensible, and perhaps necessary, for insurers to embrace the objective of creating workforce flexibility that recognizes the reality of remote and hybrid work arrangements and the corollary need to move workers in and out of functional roles to maximize their effectiveness.
Some companies realize this objective through initiatives that establish parallel working structures, where specific teams of workers that would profit from in-person interchanges are simultaneously present in the office. Other firms do this by collaborating with insurtechs and entering into joint ventures. Either way, work is becoming increasingly distributed in the industry, and the capabilities needed to support this dynamic can be achieved through the alignment of initiatives and objectives.
3. Set Specific, Measurable Goals
Establish well-defined, specific and quantifiable goals for each initiative. It’s much easier for teams to understand their responsibilities, monitor their progress, and remain highly motivated if you give them achievable targets as goals. This is particularly true for areas such as sales and underwriting, where the more specific you are, the better – e.g., boosting close ratios by 10 percent or quotes by 20 percent.
4. Communicate Clearly and Transparently
Keep your teams and stakeholders fully informed and regularly updated about what’s happening with the initiatives, including new developments, successes and challenges. This kind of open communication will earn their trust and empower them to make effective contributions. Central to this task is adopting internal communication strategies that define the processes and conduits for learning and transmitting information. It is also important to ensure everybody who needs to know regularly receives information about changes, updates and notifications.
5. Create a Culture of Innovation
Strongly encourage your people to offer their ideas and suggestions about how to implement the initiatives. This creates a culture of innovation that benefits from diverse perspectives and inspires creativity. Open channels for teams, including your project management office (PMO), to share this feedback.
To make such a culture an ongoing reality, insurers should consider pursuing innovation in a systemic way, with an approach embraced across the enterprise that enlists cross-functional teams to devise innovative strategies that focus on the challenges and objectives laid out in strategic imperatives.
One way to do this is by thinking bigger, channeling financial, technical and human assets away from core business tasks that focus on modest goals into more ambitious initiatives that open up new business models and dramatically boost returns.
6. Provide the Resources and Support Needed to Do the Job
The initiatives you establish deserve all the resources – including budget, talent and technology – necessary for success. Work closely with the project management office (PMO) on this to eliminate any red tape or logistical problems up front that limit the resources you need.
Case in point: The industry’s future will see much more streamlined operational processes that deliver significantly higher levels of automation that are distributed across multiple systems as well as organizations (such as InsureTechs). This kind of productivity enhancement will require greater resource investments in new and enabling technologies.
7. Make Sure Everybody Is on the Same Page
It’s essential to the seamless execution of your initiatives to promote cross-functional collaboration and teamwork. To make this happen, break down silos, encourage inter-department communication, and recognize and celebrate the achievements and milestones of your people at every step of the process.
By following these steps and adapting them to their own particular needs, insurance companies can develop the strategic initiatives necessary to implement their goals for sustained future prosperity and growth. This formula for success can transform insurers into industry leaders who drive change instead of reacting to it and help them create a finely honed, lasting competitive edge.