About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Tuesday, September 17th, 8:32PM
rss
Latest Headlines

Insurance bosses poorly prepared for change: Naylor

New Zealand’s insurance companies’ chief executives are partly aware of the challenges ahead of them as the industry is transformed by technology but are not well-positioned to cope, one industry commentator says.

Wednesday, January 31st 2018, 6:00AM

by Susan Edmunds

Michael Naylor, of Massey University, wrote a book, Insurance Transformed, which outlines his vision of the future of the sector.

He said the essence of the insurance industry could be expected to change.

“To be able to prepare their companies for this future CEOs need a clear vision of the likely shape of that future – what kind of product attributes will be demanded by customers, what kind of processes will produce those product attributes, and what kind of employees will best suit those processes,” he said.

“The current biggest weakness of both incumbent insurers and external disruptors is a lack of an adequate vision of how insurance will drastically differ in the future. For incumbents a lack of vision is a fatal weakness as it means that they know the future will be different, but don’t know where they should be going, and so don’t know the required steps to get there from here."

Insurers were instead “rushing around” making ineffective, incremental changes, he said.

“CEOs and executive boards are continually faced with a range of possible future changes, most of which will end up as duds. Transforming a company based on one possible future is risky, as it is impossible to know which path is best. What we can know, however, is that urgent change is looming for all service sectors and being data-based insurance will be impacted far more intensely than other sectors. Disruptive change is coming.”

He said the most important asset for companies would be flexibility so they could trial new processes fast to evaluate which would work.

“Underlying all this has to be a strong CEO who is skilled at corporate transformation and has a clear vision of where the company needs to be heading. The job of a CEO is not to strive to improve the efficiency of current processes, but to look over the horizon and spot disruptive threats. Excellent vision is vital; vision of possible futures, of possible transformations required, of how current modes of thought or behaviour may sweep aside in a perfect storm, and how to inspire employees to transform themselves into that future company.”

He said most New Zealand and Australian insurers were making an effort.

“However my feeling is that they seem unaware of exactly how huge the coming changes will be."

He said insurers still thought adding a website was "best practice, when in fact it is old-tech and a sign of a lack of vision".

"The basic problem is that insurers will need to utterly transform their admin IT systems into something resembling Silicon Valley best-practice. Many CEOs seem unaware of what this means, and the IT chiefs are overwhelmed by the problems of the current legacy IT systems. It is a very hard problem to transform core IT systems as a company runs day-to-day. This is why 80% of incumbents fail during disruptive transformations."

 

Tags: Life insurance Michael Naylor

« Insurers: Robo won't replace advisersAdvisers get automation boost »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Insurance Briefs

Asteron and Fidelity go head to head for award

nib enters ASX 100
nib health funds has been added to the ASX 100 index as part of the September 2019 quarterly rebalance of the S&P/ASX Indices.

AIA's shot at a TV ad
AIA New Zealand joins forces with Dame Valerie Adams to help Kiwis live healthier, longer, better lives.

Southern Cross recognised
Southern Cross Health Society has been recognised as one of Australasia’s top 10 ‘Most Innovative Companies’ for BeingWell, its corporate health and wellness programme.

News Bites
Latest Comments
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News

MORE NEWS»

Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com