January 13, 2015
The 1 Resolution for Insurers in 2015
by Tony Boobier
Corporate New Year's resolutions are the same, year after year, just as they are for individuals. Here is how to be different in 2015.
Less than 10% of people keep their New Year’s resolutions for at least six months, according to research from Cancer Research UK, with half breaking their resolutions within a fortnight, blaming a lack of will power. 20% planned to cut back on alcohol, others to spend less money (34%), cut down on chocolate (21% and go to the gym (22%).
New Year’s resolutions aren’t just for individuals, though. They can also be found in the annual reports of most companies, including insurers, when they set out their strategic objectives for the coming year. Sadly, most insurers say the same thing, even if different language is used: reduce costs, improve efficiency, grow, focus improve service. There’s a more than reasonable chance that they will be saying the same things next year, as well.
Delivering against strategy objectives is as much a matter of leadership as it is of planning. I wonder how many business leaders are also abject failures in keeping their New Year’s resolutions? After all, a leopard doesn’t change its spots.
Maybe the answer is to set up a project team and delegate some responsibilities. I imagine an interesting conversation in the office: “Jim, I’ve decided that your role this year is to give up chocolate for me….”
Maybe it’s about having an incentive? Insurers might say to a policyholder that they will give a 20% discount on premiums if the policyholder gives up booze. Such a discount, coupled with the money saved, could be a compelling argument. And, after all, isn’t that what user-based insurance is fundamentally about?
I wonder: Will future insurance models need to have greater alignment between risk mitigation plans of insurers and personal behavior of the individual? I suspect we are already close to having that capability, as insurers increasingly use analytics to understand their customers and create more compelling offers at renewal. Can’t we extend that thinking?
So here’s a challenge for insurers – not to promise the same old stuff but rather to make a single big resolution for their organization which will be differentiating, ambitious, maybe even bold! Perhaps insurers need to look into the crystal ball and imagine not only themselves, but also the industry in 2030, and start to realize how different the insurance business will be by then. And then, in 2015, do “just one thing” of significance to take them along that journey.
As for me and my resolution? I asked a friend what she thought I needed most, and she suggested a visit to the opera, on the basis that it’s apparently good for the soul. How I see myself, and how she saw me, are apparently different. Isn’t that the same for all of us, and for the insurance industry as a whole?
I’ll tell you when I’ve been to the opera!