Whilst it certainly appears that the traditional insurance business model has endured intact, despite disruptive technologies appearing in every other sector, industry experts acknowledge that the insurance sector now needs to reinvent itself with major revisions needed in operating models, processes, propositions and customer relationships.
In a recent interview with members of Spencer Stuart’s Financial Services Practice, Elisabetta Pizzini, Business Development Director, Italy, The Floow, was asked her views on the leadership challenges currently faced by those in the insurance industry.
Along with other senior executives from companies working in the insurance sector across Europe, Elisabetta helped to identify the five most pressing issues as:
- data management and analytics,
- technology debt,
- the role of the board,
- cultural transformation
- the talent bottleneck.
In particular, she addressed the issue of insurance companies needing to be aware of new sources of external data to help them make decisions: “The moment you add in a digital disruptor, you change parameters. For example, it becomes difficult for the insurance company that has always been able to price the risk, taking learning from past experience and projecting into the future, to accept a different parameter.”
For the full benefits of any new technology to therefore be felt it’s vital that a digital transformation is also accompanied by a cultural one so that the insurance industry’s natural orientation towards safety, order and stability doesn’t stifle innovation, with the emphasis on senior leaders to change their own habits as well as encouraging behavioural change in others.
And during this crucial time of transition it’s also important that new suppliers, such as The Floow, also do everything they can to make it a smooth transformation. Adds Elisabetta: “Companies like ours serve the insurer with whatever they are comfortable with, rather than asking the insurer to adapt to what we are able to provide. We say ‘Okay. Just tell us what you want and we’ll give it to you’.”
As the report concludes, while some insurance companies continue to rely on the barriers of entry that have protected them historically, leaders with an eye on the future will push towards new ways to generate value and seek the talent necessary to maintain their resilience and profitability in an increasingly digital age.
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