Insurance strategy consulting
Strategy consulting helps companies transform the way they do business. We help our clients achieve competitive
advantage through a fusion of business, customer and technology strategies and an explicit linkage of critical
issues to actions and results. We bring our clients the resources of IBM Global Services, the largest services
company in the world, and the first-hand operational experience the IBM Corporation has gained over the course
of its ten-year transformation.
Below is an example of our insights and work in the insurance industry.
PRODUCT COMMERCIALIZATION FOR INSURERS: BRINGING PRODUCTS TO MARKET QUICKLY AND
EFFECTIVELY
The Issue:
With the insurance industry facing ongoing consolidation, combined with increasing commoditization of core
products, there is increasing emphasis on developing new products that innovatively meet customers' evolving and
diverse financial needs. Insurance companies are facing challenges in this environment, in terms of developing
and bringing new products to market in a quick and effective manner. These challenges put increasing emphasis
on developing integrated financial services capabilities and on the separation of manufacturing and distribution
organizations. Product development and commercialization challenges escalate as it relates to moving products
from distinct manufacturing organizations into integrated distribution channels.
Our Perspective:
While many insurance organizations face challenges in the core part of their product development process, we
have found that many of their issues lie in two related areas. The first area is the existence and alignment of Insurance strategy consulting
2
product development with an articulated market and product strategy. Many organizations proceed with product
development without a clear idea of what they are trying to accomplish in terms of their market and product
strategy. The second area is product commercialization capabilities. Organizations have difficulty bringing
products to market effectively, in terms of adequate education and marketing materials to support transition into
the channel, as well as creating the appropriate channel structure given the nature of the product and its stage of
development in the market.
Case in Point:
A leading insurer had difficulty effectively launching new innovative products into its existing integrated distribution
channels, resulting in disappointing sales levels. The company needed a product commercialization model to
support its three independent manufacturing organizations and diverse in-house and third-party wholesale and
retail distribution channels.
A joint IBM-insurance company team diagnosed the product development issues as related to commercialization
efforts. Although the effort started within one of the product manufacturing organizations, it quickly became
apparent that this was an enterprise-wide issue. The team defined the foundation of the commercialization model
across the enterprise, including the manufacturing and distribution organizations. They then outlined the specific
management process steps associated with the new commercialization model, followed by the development of
detailed implementation road maps.
As a result, the insurer was able to transition to a new operating model with an understanding of specific actions,
timeframes, and accountabilities.
The new product commercialization model has allowed the insurer to enhance its product commercialization
across the enterprise, provide a more seamless transition of products from manufacturing into the integrated
distribution channels, and bring products to market in a more timely and effective manner.
CHANNEL OPTIMIZATION: HOW INSURERS WILL COMPETE IN A NEW DISTRIBUTION DYNAMIC Insurance strategy consulting
3
The Issue:
Until recently distribution power in the insurance industry has been concentrated into captive and independent
insurance agents. While these two channels still represent 70-80 percent share of the net premiums written, the
fastest growth has been in non-insurance specialized channels such as banks, wire houses, and independent
financial planners. This trend is being driven by two primary factors: 1) traditional channels have been extremely
expensive to support, comprising on average 60 percent of operating expenses; and 2) consumers are interested
in obtaining un-biased financial advice from agents not tied to a specific carrier. Manufacturers are struggling to
define their value in this changing world.
Our Perspective:
As the third-party, multi-channel model continues to gain traction, insurers must increasingly fight for shelf space
with independent distributors. Insurance manufacturers are struggling to define new value propositions that are
focused on value added support services to the distributors, and innovative competitively priced products. Insurers
must be selective in their focus because supporting all segments is simply not economical. Insurers pursuing
multiple channels should understand which distribution support services can be standardized and customize only
those services that are economically warranted. Understanding the performance management changes required to
alter distribution behavior is another critical factor for successfully competing in the new distribution dynamic.
Case in Point:
A leading insurer had internally separated into manufacturing and distribution businesses to improve operational
efficiencies, exploit new opportunities, and more effectively allocate resources. Its IT environment was comprised
of multiple distribution support tools contributing to cost inefficiencies and complexities from a manufacturer's
perspective. The company needed a strategic and operational support model for its broad and varied distribution
channels.
A joint IBM-insurance company team developed a view of the distributor's essential needs from a carrier across
the key stages of distribution support. The team then correlated the channel specific capabilities with those that
could be shared across channels. Then current IT capabilities were mapped to business requirements to identify
significant gaps and or opportunities. Finally the team developed an actionable road map to guide the
transformation to the target operational model. Insurance strategy consulting
4
With a clear vision for the insurer's business model and supporting IT architecture, management committed to
implementing the new plan, based on strategic alignment, economic return, and risk mitigation. The strategy
provided the lens needed to address the unique high value requirements of their selected channels while helping
to realize efficiencies of shared "business components" as appropriate.
Additional links
Multiplying business value: The fusion of business and technology
Consultants have long proclaimed the need for strategic alignment between business and IT: Set your business
strategy, and then determine how technology can help. Unfortunately, traditional alignment approaches invite risk
and leave opportunities untapped. Higher returns can be achieved through a higher degree of strategic alignment -
- the fusion of business and IT.
Closing the performance gap: Back to basics for the U.S. banking industry
Banking institutions across America show a striking dichotomy in terms of stock performance. Those that remain at
the top of the charts display strategies and attributes that consistently garner shareholder value. A recent study by
the IBM Institute for Business Value suggests that while their methods may vary, these leaders share three distinct
strategies.
Weathering the economic downturn… while moving ahead
While the economic downturn has hit some sectors and geographies harder than others, almost every business
has felt its impact. At the same time, economic uncertainty elicits different reactions from different firms. Some
organizations simply tread water, while others move ahead of competitors. As executives rethink their business
strategies, they should consider a variety of approaches -- including some that are not immediately obvious given
today's uncertain economic climate.
Strategy consulting helps companies transform the way they do business. We help our clients achieve competitive
advantage through a fusion of business, customer and technology strategies and an explicit linkage of critical
issues to actions and results. We bring our clients the resources of IBM Global Services, the largest services
company in the world, and the first-hand operational experience the IBM Corporation has gained over the course
of its ten-year transformation.
Below is an example of our insights and work in the insurance industry.
PRODUCT COMMERCIALIZATION FOR INSURERS: BRINGING PRODUCTS TO MARKET QUICKLY AND
EFFECTIVELY
The Issue:
With the insurance industry facing ongoing consolidation, combined with increasing commoditization of core
products, there is increasing emphasis on developing new products that innovatively meet customers' evolving and
diverse financial needs. Insurance companies are facing challenges in this environment, in terms of developing
and bringing new products to market in a quick and effective manner. These challenges put increasing emphasis
on developing integrated financial services capabilities and on the separation of manufacturing and distribution
organizations. Product development and commercialization challenges escalate as it relates to moving products
from distinct manufacturing organizations into integrated distribution channels.
Our Perspective:
While many insurance organizations face challenges in the core part of their product development process, we
have found that many of their issues lie in two related areas. The first area is the existence and alignment of Insurance strategy consulting
2
product development with an articulated market and product strategy. Many organizations proceed with product
development without a clear idea of what they are trying to accomplish in terms of their market and product
strategy. The second area is product commercialization capabilities. Organizations have difficulty bringing
products to market effectively, in terms of adequate education and marketing materials to support transition into
the channel, as well as creating the appropriate channel structure given the nature of the product and its stage of
development in the market.
Case in Point:
A leading insurer had difficulty effectively launching new innovative products into its existing integrated distribution
channels, resulting in disappointing sales levels. The company needed a product commercialization model to
support its three independent manufacturing organizations and diverse in-house and third-party wholesale and
retail distribution channels.
A joint IBM-insurance company team diagnosed the product development issues as related to commercialization
efforts. Although the effort started within one of the product manufacturing organizations, it quickly became
apparent that this was an enterprise-wide issue. The team defined the foundation of the commercialization model
across the enterprise, including the manufacturing and distribution organizations. They then outlined the specific
management process steps associated with the new commercialization model, followed by the development of
detailed implementation road maps.
As a result, the insurer was able to transition to a new operating model with an understanding of specific actions,
timeframes, and accountabilities.
The new product commercialization model has allowed the insurer to enhance its product commercialization
across the enterprise, provide a more seamless transition of products from manufacturing into the integrated
distribution channels, and bring products to market in a more timely and effective manner.
CHANNEL OPTIMIZATION: HOW INSURERS WILL COMPETE IN A NEW DISTRIBUTION DYNAMIC Insurance strategy consulting
3
The Issue:
Until recently distribution power in the insurance industry has been concentrated into captive and independent
insurance agents. While these two channels still represent 70-80 percent share of the net premiums written, the
fastest growth has been in non-insurance specialized channels such as banks, wire houses, and independent
financial planners. This trend is being driven by two primary factors: 1) traditional channels have been extremely
expensive to support, comprising on average 60 percent of operating expenses; and 2) consumers are interested
in obtaining un-biased financial advice from agents not tied to a specific carrier. Manufacturers are struggling to
define their value in this changing world.
Our Perspective:
As the third-party, multi-channel model continues to gain traction, insurers must increasingly fight for shelf space
with independent distributors. Insurance manufacturers are struggling to define new value propositions that are
focused on value added support services to the distributors, and innovative competitively priced products. Insurers
must be selective in their focus because supporting all segments is simply not economical. Insurers pursuing
multiple channels should understand which distribution support services can be standardized and customize only
those services that are economically warranted. Understanding the performance management changes required to
alter distribution behavior is another critical factor for successfully competing in the new distribution dynamic.
Case in Point:
A leading insurer had internally separated into manufacturing and distribution businesses to improve operational
efficiencies, exploit new opportunities, and more effectively allocate resources. Its IT environment was comprised
of multiple distribution support tools contributing to cost inefficiencies and complexities from a manufacturer's
perspective. The company needed a strategic and operational support model for its broad and varied distribution
channels.
A joint IBM-insurance company team developed a view of the distributor's essential needs from a carrier across
the key stages of distribution support. The team then correlated the channel specific capabilities with those that
could be shared across channels. Then current IT capabilities were mapped to business requirements to identify
significant gaps and or opportunities. Finally the team developed an actionable road map to guide the
transformation to the target operational model. Insurance strategy consulting
4
With a clear vision for the insurer's business model and supporting IT architecture, management committed to
implementing the new plan, based on strategic alignment, economic return, and risk mitigation. The strategy
provided the lens needed to address the unique high value requirements of their selected channels while helping
to realize efficiencies of shared "business components" as appropriate.
Additional links
Multiplying business value: The fusion of business and technology
Consultants have long proclaimed the need for strategic alignment between business and IT: Set your business
strategy, and then determine how technology can help. Unfortunately, traditional alignment approaches invite risk
and leave opportunities untapped. Higher returns can be achieved through a higher degree of strategic alignment -
- the fusion of business and IT.
Closing the performance gap: Back to basics for the U.S. banking industry
Banking institutions across America show a striking dichotomy in terms of stock performance. Those that remain at
the top of the charts display strategies and attributes that consistently garner shareholder value. A recent study by
the IBM Institute for Business Value suggests that while their methods may vary, these leaders share three distinct
strategies.
Weathering the economic downturn… while moving ahead
While the economic downturn has hit some sectors and geographies harder than others, almost every business
has felt its impact. At the same time, economic uncertainty elicits different reactions from different firms. Some
organizations simply tread water, while others move ahead of competitors. As executives rethink their business
strategies, they should consider a variety of approaches -- including some that are not immediately obvious given
today's uncertain economic climate.
0 comments:
Post a Comment