The insurance industry is facing a flurry of challenges as consumer needs and expectations evolve with a new age. Although collaboration isn’t always common practice in the industry, it’s time that teams learn to work together.
Collaboration Is Key
Insurance companies are beset by three major challenges that demand collaboration.
First, consumers themselves are emerging as a disruptive force. They have an on-demand mindset and expect more from their financial service providers. But the insurance gap continues to grow in the U.S., creating new challenges for consumers and the insurers who serve them.
Next, the introduction of insurtech has shifted the nature of insurance itself. Insurtech has evolved to meet the needs of consumers — meaning more tech, more data and more focus on customers — and has received $10 billion in investments over the past five years. Insurance companies that want to adapt to the market should prepare to join forces with new entrants.
Lastly, data security and privacy regulations are top priorities as the digital age progresses. Yet it's more difficult than ever for companies to avoid regulatory and legal risks because the nature of compliance in the industry shifts almost daily. The General Data Protection Regulation in Europe, for example, inspired a similar privacy act in California. It was rolled out on Jan. 1, 2020, requiring organizations to make changes if they want to stay compliant and keep customers happy.
With market disruptions coming from all directions, insurance organizations must reimagine the industry. Collaboration will be crucial to evolving and meeting these challenges.
Barriers to Collaboration
It seems like collaboration would be a given in such a complex and people-driven industry, but it isn't. In addition to being a highly regulated industry, insurance has practices that have been in place for years — and collaboration hasn't always been a priority.
Legacy tech systems, for one, still reign supreme in the insurance industry and are notoriously sluggish at reacting to real-time needs. These systems weren't built for today's expectations of immediacy. As a result, they make it difficult for employees to collaborate while leading to less efficient and effective work processes.
Aside from legacy technology, many teams are stuck in top-down structures. These types of organizational structures disable cross-department communication and make teamwork a chore. Even goals and incentives are siloed in these structures, so employees often lack a collective sense of purpose.
Teams need a more modern, dynamic way of working if they want true collaboration. They need to be able to adapt quickly, make decisions based on shared knowledge and transcend departmental barriers so their companies can remain competitive.
See also: Model for Collaboration and Convergence
Collaboration Starts at the Top
Leaders have a duty to position collaboration as a key tenet of success in their organizations. It can be an overwhelming task, especially if your team has been working within legacy systems and structures since its foundation. Leaders who embrace collaboration will see their companies thrive, though.
Above all, it’s important for leaders to approach collaboration intentionally. Give it time and attention. Make sure you acknowledge its importance and model the way forward for employees by lowering any borders between management and teams. This will enable leaders to put strategies in place to inspire people to come together in the spirit of collective innovation while better positioning their organizations for success in today's challenging market.
Now that you have leadership's involvement, here are three other must-haves for a collaborative environment:
1. A set of common goals.
If your departments are going to start talking and working more with each other, they’re going to need a uniting factor. A company vision crafted with a set of common goals helps people unite with purpose. Without this sense of purpose, employees can become confused, misguided and stressed. With common goals, though, they can focus on the big picture: providing the best service to customers.
2. A team-based structure.
As mentioned, legacy systems and structures can inhibit progress. When there’s so much change in the market, your team needs to be nimble and dynamic to adapt. A team-based structure can eliminate company silos that impede collaboration. As a result, communication will be more free-flowing and effective — leading to a more collaborative environment.
3. A shared incentive system.
Once you set common goals and a more open structure, you can fuel teamwork by introducing shared incentives. Use your goals and create incentives to reach them. That way, employees must actively collaborate to succeed. Shared incentives will align every team member — top to bottom — toward goals that reinforce the company's vision. That said, some people in teams contribute less work than they would individually. To overcome this, you'll also want to incorporate an individual component.
See also: 5 Ways to Build Team Capacity to Think
The insurance industry must evolve if it wants to keep up with the growing number of market changes. That means it’s time for a clear out. Rid your team of its limiting legacy systems and break down its siloes. Only then will you discover what collaboration can do for your company — and your consumers.