In a world of rapid change, the gap will at some point become unsurmountable
The answers to these two questions form the crux of Majesco’s second annual Strategic Priorities survey. The responses to the survey reflect an awareness of the pace of change that is unfolding unheralded challenges and opportunities. Unfortunately, turning awareness into doing, with actionable initiatives, is elusive, creating an ever-widening gap between leaders who are taking action and those who are not.
“In a world of rapid change, the gap between leaders and fast followers or laggards will at some point become unsurmountable,” commented
The report links the forces of change identified in Majesco’s Future Trends 2017: The Shift Gains Momentum report and the consumer and small-medium business research reports, with the reality of how insurers are responding, both in terms of planning as well as doing, highlighting a significant gap. The report notes that the insurance business models of the past 50+ years have been based on the business assumptions, products, processes, channels, and more, for the Silent and Baby Boomer generations. Gen X was the first to begin to shift, with Millennials and Gen Z putting tremendous power behind it to move it forward at a rapid pace. The business models of the past will not meet the needs or expectations of the future. Unfortunately, those initiatives where insurers are actually doing something tend to be those that are traditional areas of priority and understanding, like security, talent and legacy system replacement rather than those that are transformational and require new thinking, different approaches and different business models.
The report also highlights some interesting differences between the L&A and P&C market segments. The L&A segment has been relatively slow to change, even seeming to be dormant with replacing legacy systems. This is in contrast to the P&C segment, where carriers have been aggressively replacing legacy systems. Interestingly, it is the L&A segment that seems to be more attuned to the pace of change and is responding with plans and action as compared to the P&C segment. This is creating an interesting industry dynamic.
Those that adapt quickly will likely see new business heights, contrasted to a potential death spiral among those who do not adapt. This is reinforced in an “early trend” that highlights higher growth potential for those focused on innovative areas. Companies that reported strong growth in the past year were up to 17 times more likely to be actively engaged in innovative growth activities, compared to those that had lower growth. If the growth gap creates a wide enough chasm, devastating business results will be seen, in similar fashion to what we have witnessed with organizations such as Sears, Blockbuster, Macy’s, and others.
Insurance business transformation is a journey of change and revitalization, a renaissance of Insurance. Approximately 150 insurance companies worldwide in P&C,
Director — Global Marketing