Next Generation Insurance: Leading from the front.

In my previous blog I mentioned the need for Insurers to  "Simplify", "Collaborate" and "Adapt" to emerge as "Smarter Organizations". I would like to elaborate on the need to "Simplify" in this blog.

Insurers are entering new markets and geographies through acquisitions and setting up their own offices. Insurers in new geographies have initially set up their own enabling functions like IT, HR, finance etc to allow organizational agility instead of relying on corporate office. However as the organizations grew in each of the geographies the siloed nature of the support functions has increased the cost through duplication of efforts, infrastructure and processes. Simplification reduces risks and frees up cash.

Few insurers have realized the need to Simplify their operations to show productivity and reduce costs. Few initiatives for simplification include

1) Creating single digital nervous system for key functions such as HR & Finance to enable faster flow of information
2) Setting up of shared services structures for Infrastructure across subsidiaries
3) Single instances, server consolidation and virtualization
4) Integrated planning, performance management processes across entities

Increasingly Corporate CIOs are given the responsibility to reduce the IT costs by simplifying the underlying structures, processes and systems. Such a transformation is possible only with the direct support of a CEO and CFO.

Posted by Siva Nandiwada at 10:20 AM | Permalink | Comments (0) | TrackBacks (0)

The percentage of 17-year-olds with a driver's license dropped from 75% in 1978 to under 50% in 2008. Even if you go up two years, the drop is still significant, from more than 90% of 19-year-olds in 1978 being licensed drivers to only 77% of them 30 years later.

 

The reason for this shrinking of the pie seems to be a) movement towards urban areas with abundant public transportation and b) evolution of digital commerce.

 

With the rapid evolution of technologies, the second aspect above could only accelerate the change in consumer needs vis-a-vis protection. Auto manufacturers are already doing everything possible to get the demographic into a vehicle - ranging from making the vehicle equate to a "computer-on-wheels" to introducing "community cars" for the infrequent drivers.

 

The underlying question though is - will this trend influcen a change in the personal insurance products? Can the consumer demand an auto-insurance product that he/she pays for on a need-basis? Can the consumer demand a true "personal protection" product that will insure the individual regardless of the risk?

 

I guess the answer to all the questions above is Yes. It will be imperative for carriers to understand, engage, sell-to and service the new demographic in ways that they have never done before. How they will react and who emerges as a leader remains to be seen. There is no doubt, however, that it is time to get a lot more personal with the consumer base.

 

What do you think?

Posted by Sanjay Mohan at 2:57 AM | Permalink | Comments (3) | TrackBacks (0)