The Insurance Sector’s Maturity Hinders Transformation
Organizations have life and a way of growing, adapting and transforming. This form, which has remained valid during the evolution in the last few years, is now insufficient for current and future challenges.
Over the last ten years, insurers have been on a complex path, which has evolved in a changing, but accessible environment where communication is now open. Customers view the digital environment as a new experience with insurers, one that is more transparent, more attentive, where accessing services and interacting with their insurance company occurs at any time. New disruptive technologies have become an exponential lever for digital transformation causing faster and more intense changes. Organizations are now faced with the most crucial challenge yet, speed.But digital transformation has found an exponential lever in new disruptive technologies. Changes shall become even quicker and more intense. Organizations are now faced with the most crucial challenge: speed.
Traditional companies lack speed when faced with changes that compete in a digital economy, where competition involves not size, but rather agility. This economy creates new environments and business opportunities, for example, some digital players have the advantage of major organization’s inertia and are not ready for a leap in an environment of constant change and uncertainty.
Organizations in the digital value economy
Value should be the center of the digital economy. The struggle to increase the company’s value offering to the market will be a strategic challenge for the next five years. The impact of disruptive technologies will affect the market segments of insurance companies. How can we recreate an organization that is oriented towards digital value? Three key elements will produce this result: digital leadership, a hybrid organization, and a technology-centered company.
At the start of the digital revolution and through bottom-up initiatives, motivation came from the organization’s base and changed towards horizontal and decentralized information diffusion. This movement changed organizational models and challenged multiple companies who took the opportunity to redefine its organizational models, including offering collaborative work environments. However, new digital leadership requires a change in organization model due to different speeds of activity within the company. The CEO and top management must lead the change towards the new value goal. It is impossible to face the challenges of the upcoming years without an irrevocable change in direction. Companies need a clear mission in the digital world, one that is well known within the organization, is well-orchestrated, and is focused on reaching the most value in all contexts, from the individual to the connected activities throughout the organization’s value chain. Digital evolution cannot happen without a credible and sustainable leadership model that is aligned with the environment and address the challenges of a digital society.
The hybrid organization
Insurers require exponential speed. Combining disruptive technologies (Artificial Intelligence, Big Data, Virtual and Augmented Reality, Internet of Things, Block Chain and robotics) with the internal scope increases this required speed. Therefore, in the next ten years, organizations must make decisions faster, more effective, using a more coordinated method, promoting personnel knowledge that will increase value from individuals or collectively. Using organized data models to achieve a common goal, using Artificial intelligence and the connection of work and environment tools result in true digital change. This delivers authentic digital products and services- using the required speed- to the market. Considering the extended amount of case studies and the commercial model of insurance companies, cultural transformation has become an obstacle in organization’s evolution path. Since the origin of this new form of organizing is critical, the transformation is complex for an intense and ever-changing environment.
The time to redefine the scope is now. Although it is an admirable goal, we must consider the digital mentality concept, with opens a window to the development of employees and increases its effects when combined with advanced technology in company environments. We have the opportunity to increase the value of employees in the face of new challenges. Mediation networks and employees will benefit from this new model. Out of this, a new hybrid organization is born, combining the value of knowledge, experience and creativity in people with catalyst of disruptive technologies. This generates a diverse environment, immediate knowledge management, connecting communication among agents, an advanced network space and highly intelligent management of the environment and personnel.
The technologic company
The last key element is the evolution of the business model. Digital companies are born technologically advanced in relation to traditional companies. A few years ago, leading companies in the sector aspired to be digital. Today this challenge has evolved into becoming technology companies, leading the technology revolution, or at least driving technologically advanced services and products. Becoming a technology company is necessary to compete with the speed required by the market. Therefore, an extraordinary technology evolution has occurred in traditional markets. Many services are intelligent, data management invasion requires proper data infrastructure, operations universally align with customer experience and ultra-connectivity opens the door for multi-sector companies that are ready to provide insurance services at any time, anywhere and in any format. Value generation in each link of the chain produces the perfect storm.
All of this requires a new technology vision for companies; establishing a transversal model in which technologies coexist with innovation, operations, organization and talent. Therefore, developing a technologic impact strategy- with the proper combination of infrastructures, systems and applications that overcome the challenges of our time from a broad perspective, in which advanced technologies support the organization’s building blocks- is required.
Companies will generate practical and advanced innovation structures, which are critical in launching new digital services, from a technologically advanced and connected entity from purely digital parameters. Likewise, organizations will support the areas that implement intelligent technologies that drive the hybrid organization model and will obtain exponential advancements in the agile operating model to generate a relevant service and customer experience.
Welcome to the new hybrid, technology and agile organization model of the insurance sector.