WINDSOR, Conn. and BOSTON, Oct. 28,
2019 /PRNewswire/ -- Change management has become the
most important challenge in the minds of C-suite executives in the
global life insurance industry, followed closely by the need to
improve customer experience. Results from the new biennial global
survey of C-suite life insurance executives finds a shift in
priorities as economic, technological, regulatory and consumer
changes press life insurance companies to reassess their business
model.
The study, conducted by LIMRA and Boston Consulting Group (BCG),
surveyed more than 500 C-suite life insurance executives, nearly
one-fifth of them CEOs or presidents, across 62 countries to
identify their greatest challenges and the biggest external forces
affecting their business and their priorities for the future. The
findings are presented in a report titled "What's On the Minds
of Life Insurance Executives: Managing Change in a Customer-Focused
World," which is being released today.
Change management emerges the greatest internal challenge facing
life insurance executives as they work to help their organizations
keep pace with and adapt to a rapidly evolving business
environment. The study finds one-third of executives cite change
management as their greatest challenge. This is a significant shift
from prior studies in 2015 and 2017, when executives cited talent
management as their biggest challenge (Chart 1).
"In today's business environment, executives are realizing that
having the right talent is not enough to address the external
forces transforming the business landscape," said Alison Salka, Ph.D., senior vice president and
director of LIMRA Research. "To transform their entire
organizations, executives must cultivate corporate cultures that
not only fully embrace change, but can also sustain it over the
long term."
Part of this need to better manage the change in their
organization is the recognition that life insurance companies need
to improve their customer experience. Nearly a quarter of
executives said this was a top challenge for their company. As
leading companies embrace advanced IT and data capabilities to
analyze customer behavior, cross-sell and customize products, other
companies appreciate the need to invest in these technologies to
compete for consumers' attention.
"Life insurance executives have long been aware they need to
change their organizations and deploy new digital technologies to
improve customer experience, become more efficient, and develop
products that are more tailored to individual needs," said
Tim Calvert, managing director and
partner and global leader of BCG's Life Insurance practice. "Our
research indicates that they are now ready to do something about
it."
External Challenges Driving Change
As life insurers
look to transform, there are external factors that are also
spurring change. Nearly two-thirds (64%) of executives surveyed
said technology such as artificial intelligence, automation, and
customer-service tools, would have the greatest impact on their
company in the next five years, followed by customer behavior and
regulations (Chart 2).
"Advances in technology offer the most promise to help insurers
transform their business but also reveal the acute talent
management challenges they face," noted Calvert. "IBM reports the
competition for skilled data scientists will increase nearly 30% by
20201. Insurers are grappling with not only finding
qualified candidates but retaining these individuals in a highly
competitive marketplace."
Regulation also plays a significant role in driving change. The
strong push in many countries for greater fiduciary and suitability
standards; transparency over pricing, commissions, incentives; and
consumer privacy protection means that the regulatory environment
will continue to have important implications for life insurers.
When asked to name the most challenging areas for regulation and
compliance, "customer best interest," cited by 47% of executives
worldwide, was the leading issue. This was closely followed by
"analytics/modeling in risk compliance," "data privacy," and "cyber
security."
"Fraud is also a growing concern among life insurance
executives. More than three-quarters of CEOs and executives overall
worry about the growing incidence of fraud," Salka remarked. "Fraud
not only hurts a company's bottom line but damages its reputation
and consumer trust. This concern led LIMRA to develop FraudShare, a
new tool to help insurers better detect and prevent account
takeover attempts."
The report's authors offer three suggestions for life insurers
to consider as they realign, reimagine, and transform their
companies for tomorrow:
Instill a pro-change culture. A corporate culture
of change is a pre-requisite if life insurers are to make their
businesses more customer-centric. That begins with having the right
people across the organization that believe in change.
Focus on the customer. The first thing to remember
about improving the customer experience is that authenticity and
agility are key. Insurers need to better understand the needs of
their customers by closely and regularly monitoring customer
journeys to determine what is going well and what needs to
improve.
Think strategically about technology. For the
industry to truly achieve the quality of digital experience and
operational efficiency they desire, technology must become more
central to the overall business strategy and be viewed as a source
of competitive advantage—rather than merely a cost.
To download the report, please visit: "What's On the Minds of
Life Insurance Executives: Managing Change in a Customer-Focused
World,"
1 The Quant Crunch: How the Demand for Data
Science Skills Is Disrupting the Job Market, IBM 2017
About LIMRA
Serving the industry since 1916, LIMRA
helps to advance the financial services industry by empowering
nearly 600 financial services companies in 64 countries with
knowledge, insights, connections and solutions. Visit LIMRA at
www.limra.com.
About Boston Consulting Group
Boston Consulting Group
partners with leaders in business and society to tackle their most
important challenges and capture their greatest opportunities. BCG
was the pioneer in business strategy when it was founded in 1963.
Today, we help clients with total transformation—inspiring complex
change, enabling organizations to grow, building competitive
advantage, and driving bottom-line impact.
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SOURCE LIMRA