The many factors impacting the insurance operating model are interdependent and have overlapping impacts and implications. Any changes to the existing operational model requires a holistic approach; implementing change via one-off, tactical, and reactive projects suboptimal not a viable way to prepare the organization for the future. The impacts of each change driver (e.g., the ORSA or new insurance contracts accounting standards) will significantly affect actuarial, finance, and risk management, as well as IT, compliance, and other functional areas. The breadth of these impacts require key functional areas to work together to create a new insurance operating model that is responsive to internal and external stakeholder needs and demands, and enables effective management of organizational-wide change.
Because most insurers are beginning their insurance modernization journey, there is no “one-size fits all” approach. However, what is critical from the outset is that all modernization initiatives share the same end-state vision. Effective modernization strategy requires holistic consideration of data, processes, technology, and people, as well as the business and operational changes required to define and meet new performance metrics. And, while this journey will not be an easy one for many companies, the ones that fall by the wayside will be at a significant competitive disadvantage – and sooner than they may realize.