Crystal-Ball Gazing

As 2016 beckoned, we lit the candles, gathered the few remaining mince pies, and turned to the noble art of divination. We wanted to see whether we could establish what the coming year might bring for the insurance industry.

Of course, it has long been recognised that divination is not a precise science. But, nonetheless, we felt that the results of our evening of prophesy might benefit a wider audience… the port and stilton were particularly fine as well.

Prophecy #1: There will be a need to overcome internal barriers…

Many insurers will continue to struggle with a potentially life-threatening condition… an internal resistance to change… externally, for most, there will be very little evidence of innovation or improved market share…

But, for a few, fresh inspiration will arrive from outside… this shall appear in the form of new entrants at the executive level… a new breed of executive that brings experience of success in retail and other commercial markets…

The new breed will know instinctively how insurers are benchmarked by the customer… not one against the other… but against the best performers from other markets… against brands such as Uber, Amazon, Quirky, and airbnb…

This new type of leader will want a fresh approach for insurance… he or she will recognise the need to move forwards… to drive through cultural change… a need to overcome the internal barriers…

Prophecy #2: Organisational Silos shall be broken…

While the coming year sees an ever increasing focus on putting customers first and meeting their varied needs, many insurers will continue to put their products first…

These are the insurers who are driven by their historic organisational structures and the technologies that underpin them… these are the insurers who are forced to do business through product verticals… they will have no choice but to continue selling through their established product lines… with perhaps half-hearted attempts at cross-selling… they will gaze hungrily, but in vain, at the full insurance needs of a customer…

But… there will be a few who are able to create joined-up business processes that meet those full insurance needs… these are the insurers who will recognise and understand the fundamental structural re-organisation that would support a fully customer-focused service… they will be prepared to undertake the necessary technological and personnel changes to move forwards and claim the prize…

Prophecy #3: Big-data, the truth will be revealed…

… on Saturday June the 25th, 11.15, Lands End, Cornwall, United Kingdom…

All who seek wisdom must attend… all attired in cross-gartered yellow stockings, ever smiling…

In the real world, insurers will continue to drown in their own data… and big-data will continue as an industry buzz word… many will whisper “big-data” to each other as they wait for the “change that involves no risk” to be revealed…

New leaders must arise from those who can grasp relevant insight from their own data and are in a position to act upon this insight…

But beware… not all insights are true insights… the winners will come from those who can test-and-learn… those who can start small and launch new initiatives quickly… those who can mitigate risk and allow failure… these insurers will not spend too much time on research, but recognise that the only way to find out what works is to take action…

The winners will not be afraid to move… they will not be afraid of failure…

They will not be afraid because they will have technology that enables them to get to market quickly… technology that allows them to change and improve when they have learnt from the results…

And finally, from the tea leaves…

Ultimately, success is measured by sales and profitability…

Most of the players have good products… the winners will be those who continually focus on improved customer engagement…

All recognise that today’s customers are hugely demanding… as customers themselves they want a personal service from an effortless process…

All recognise that the digital revolution is not just happening, it is happening at a pace and a scale that was previously unimaginable… all can see how the external pace of change is far outstripping the internal pace of change in the insurance industry…

But some will move… and some will only shake their heads… the winners will be the ones who can support internal organisational changes with new technologies that are smarter, faster and, most importantly, deliver a radically improved service for their customers.