Change and Transformation in Insurance Companies (Part 1)
Organisations are never static, they evolve constantly. This could be changes to staff, premises, infrastructure, products or services, sales channels, business operations or strategic initiatives to grow and expand the business. Usually, in the vast coverage of change and transformation articles, white papers, surveys and books the discussion veers into one of:
- Organisational change OR;
- Business transformation OR;
- Digital transformation OR;
- IT change OR;
- Combinations of all of the above
To simplify, these are all actions of “change” or “transformation” where change is an act or process through which something that exists today becomes different. Transformation on the other hand is a fundamental or clearly noticeable variation. Transformation impacts on the particular way the organisation exists, its inherent culture or attributes i.e. systems, processes, people or technology.
The reality is that there is a constant state of change in organisations and at times they move into a state of transformation. This is typically to enable them to compete in changing market environments in terms of technology, consumer demand, regulation, developing and retaining talented staff.
There has never been a greater need for Irish insurance and life insurance companies to be able to execute organisational change and transformation successfully. This is the topic I want to explore in this upcoming series in our blog!
The Change and Transformation Challenge for the Insurance Industry
External factors such as over-regulation, Brexit & other geopolitical uncertainty, new entrant competition, skills gaps (in particular for specialist roles) and most recently, the coronavirus (Covid-19) pandemic are driving uncertainty in business across the globe. This uncertainty also applies to insurance companies here in Ireland as you can see from the latest PWC Insurance Ireland report.
Growth and Competitiveness for Insurance Life Insurance Companies
To remain competitive and grow in this uncertain environment, insurance companies need to be dynamic and nimble. They need to have an inherent ability to maximise growth opportunities. Insurance and Life insurance leaders are seeking to do this through product innovation & diversification. This includes expanding geographically, evolving business models and leveraging technology to delivery operational efficiency, i.e. deliver financial growth whilst minimising waste.
PWC Insurance Ireland CEO Survey
But setting the business strategy is just the start. So how successful are companies at executing the change and transformation required to deliver the business outcomes?
More than a third of respondents to the PWC survey included change management as one of the top 3 business challenges/risks for insurance businesses. This suggests some doubt about their ability to effectively navigate the change and transformation journeys required to meet the well-known present day demands such as digitisation and consolidation not to mention the future demands of the industry which are far less certain.
This is not surprising. Change and strategic transformation programmes are often challenged by lengthy delivery timeframes or recurring failure to meet cost and timeframe promises. This ultimately results in business benefits not being realised. Years of research by McKinsey indicates that digital transformation success rates remain consistently low at less than 30%, and that digital transformations are even more challenging
A Change and Transformation Solution
The change and transformation solution starts with setting all change and transformation objectives in a strategic framework that:
- Aligns with the business strategy
- Garners C-suite commitment and engagement
- Provides for upfront attention to the change management infrastructure, skills and tools required to deliver successfully
- Gives consideration of the organisational (or organisational unit) impacts
- Sets a prioritised roadmap that enables regular, incremental delivery of sustainable, impactful business outcomes
Setting up for success at this early stage means that the strategic framework encompasses more than structural and IT change. It also sets out a plan that considers all hard (i.e. structure, processes, technology) and soft (people, skills, culture) elements of the organisation. This ensures they are aligned and in harmony throughout the change and transformation journey.
Future Change and Transformation Blogs
Over the coming weeks, we aim to share with you our ideas on how to set up for change and transformation success. Our next blog in this series will set out an approach to setting your change and transformation strategy. Subsequential installments will explore progressing onto execution success.
About PPL Partners
We have worked extensively in the insurance and life insurance sectors over the last 25 years. During this time, we have developed change and transformation expertise that is bespoke to these financial services sectors.