“Change is the norm” Dr. Erik Winslow said as I walked through the door of my first ever human dynamics class. It was 2005 and I had just started my MBA at the George Washington University. Almost every Tuesday throughout that whole year, Dr. Winslow repeated that same sentence until it became engrained in my brain. He taught me how to navigate change and understand how people behave and respond around it.
I recently attended the 2019 LIMRA Annual conference alongside our Equisoft team of experts and other top life insurance leaders—and it was quickly apparent to me that Change Management was very much on the mind of those key executives.
One of the key sessions was a presentation by Limra and the Boston Consulting Group to share the results of a recent study that underlined that focus. The title of the study was “What’s on the mind of life insurance executives globally”. BCG surveyed closed to 500 senior life insurance executives from all around the world. Turns out that out of the top 10 challenges for executives, change management is in the top 3 for all surveyed regions, with both customer experience and growth a priority in half of the regions. In North America specifically, 27% of all senior executives believed that change management is a key challenge.
Meaningful change is powered by people
Think of that for a moment. If you owned a pizza joint, and wanted to grow, you would need to offer a great product and a great experience. But, essential to creating that great product and experience are talented and satisfied employees that have the right tools, training and structure.
So how do you manage and motivate people through significant change? To me there’s no better manual than the book: “Big Change at Best Buy: Working Through Hypergrowth to Sustained Excellence” by Elizabeth Gibson and Andy Billings. It’s almost a template for how to leverage the head and heart—and turn theory into action. It should be mandatory reading for Life insurance leaders.
Technology and growth in relation to change
The change management message is critical right now because our industry is in the midst of a top down and bottom up evolution that needs to be better managed in order to drive innovative customer experience that accelerates growth.
To start with, modernization success requires more than dollar investments. Just throwing dollars and technology at our problems won’t solve them all—but it will definitely help and that became apparent in adjacent industries.
At best, our industry only spends around 3% of revenue on technology. That’s just not enough at a time when innovation is critical to the future growth of our organizations. JP Morgan, for instance, spends 10% of its revenue on technology and digital solutions.
Just as important as finding the budget required for digital transformation is discrimination about what that money is invested in. It’s no good to just “slap lipstick on a pig.” Patching yesterday’s legacy systems won’t enable enterprises to access the data they need to deliver accelerated, highly-personalized digital experiences for their customers. Integration of micro-services and APIs that enable agent and client self-service portals and straight-through processing of quotes and apps can only be built on the foundation of a modern PAS. Migrating and consolidating data on a rules-based core system will be critical to creating a base for future AI and analytics solutions that can generate business intelligence and speed decision making. The bottom-line is, no tech stack will drive solid ROI unless it is built over a modern PAS system.
The way forward
Life insurance is, by its very nature, a risk averse industry—but change is the norm. In the past few years we’ve seen an awakening of insurance executives to that reality and a corresponding commitment to investing in modernization. Funding for new technology has significantly increased—the migration to the cloud is well-underway and decades old infrastructure is being replaced by the modern platforms that put power in the hands of the business units. The pace of innovation is starting to accelerate.
Insurers are moving in the right direction—but continued success will require that they:
- Install a pro change culture: technology can help, but it’s really people that will drive change
- Focus on the customer: understand their needs by monitoring their journey
- Think strategically about technology: tech must become central to an insurer’s business strategy and should be seen as a competitive advantage rather than a cost.
Equisoft has spent the last 25 years helping life insurance companies succeed in their modernization projects. We are excited about the next 25 years and helping insurers realize the potential of their digital transformations.
To continue the conversation about the future of our industry please feel free to contact me:
Vice President, Marketing