The insurance industry has undergone significant change in recent years, driven by a variety of factors including technological advancements, shifting customer expectations, and changing regulatory environments.

Helping insurers keep pace in this fast-moving industry, change management (CM) is becoming a red-hot area of focus. It plays a crucial role in helping insurance companies adapt to a constantly evolving business environment.

Although 9 in 10 insurance executives think that digital disruption is going to affect their companies, only 2 in 10 feel well-prepared for it. That’s not necessarily a surprise, as insurance is one of the more traditional, slow-moving industries where periods of change were spread out decades.

Today, a decade of change is now being counted in months.

Even for organizations that have carried out large-scale changes, many fail. In fact, half of all transformations fail, according to Gartner research.

So the task of implementing successful and sustainable change can be complex.

One major area of change in the insurance industry has been the increasing use of technology. In particular, many insurance companies are using artificial intelligence (AI) and machine learning (ML) to process claims, underwrite policies, and identify fraud. It’s helping insurers operate more efficiently and provide better service to their customers.

Coupled with technological change is a shift in customer expectations when it comes to insurance. Customers are increasingly seeking more personalized and convenient insurance experiences, with insurers responding by offering a broader range of products and services, as well as more flexible payment and coverage options.

Regulatory changes are also having a major impact on the insurance industry’s evolution. Governments around the world have implemented a range of regulations aimed at better protecting consumers and promoting competition within the industry.

These regulations can have a significant impact on the way insurance companies do business and can drive changes in areas such as pricing, underwriting, and claims handling.

With so much change going on in the industry, insurers need to develop a good approach to successfully manage it all. This is where change management (CM) comes into play.

Change management is the process of planning and implementing change in an organization. It involves multiple elements that involve collaboration, engagement, continuous training, and support, with clear communication threading everything together.

Why change management is important is important in the insurance industry

1. Digital transformation: The insurance industry, like most others, is undergoing digital transformation, with many companies adopting new technologies and changing their business models to deliver for customers with higher expectations.

CM plays a key role in managing this change and ensuring that it is successful. For example, helping you first identify the need for change before implementing anything. This involves assessing the current state of the company and identifying areas for improvement.

2. Culture change: CM helps to nurture positive culture change within an organization. In the insurance industry, this may involve changes in the way that employees work, such as the adoption of agile methodologies or the use of new technologies.

This is shaping insurance into an industry that puts more emphasis on innovation, using leading tech such as AI and blockchain to improve the customer experience and edge out competition. Then there is the accelerated trend in remote work brought about by the pandemic, which has led insurers to rethink their work culture.

3. Facilitating change: The core of CM is ensuring that changes are implemented smoothly and effectively. This can involve the development of a change management plan, which outlines the steps involved in the change process and helps to ensure that the change is successful.

Many organizations lack the right tools to carry out positive change. Only 12% of insurance executives believe they have a process that can deliver strong product innovation. It’s improving. But there’s still a long way to go.

4. Employee engagement: CM can help to engage employees and ensure that they are supportive of the change. This involves communication and training to help employees understand the change and how it will impact them.

When employees participate in the change process, they are more likely to support it. CM provides opportunities for employees to contribute feedback and input on any change, which in turn helps them feel valued by giving them a voice.

That was a quick summary of some of key implications of change management within the insurance industry. Now let’s look at some CM best practices.

Best practices for change management

1. Establish clearly defined goals

It is important to have clear goals for the change and to communicate those goals to employees. This can help to ensure that everyone is working towards the same objective and understands the importance of the change.

2. Develop a change management plan

It is important to have a change management plan in place that outlines the steps involved in the change process and helps to ensure that the change is successful. The plan should include key milestones and deadlines, as well as measures to track progress and identify any issues that may arise.

3. Keep communication channels open

CM involves effective communication with employees about the change and how it will impact them. This can include providing information about the reasons for the change, the steps involved in the process, and the benefits that it will bring.

4. Encourage employee engagement

Involving employees in the change process can help to engage them and ensure that they are supportive of the change. This can involve things like setting up focus groups or holding town hall meetings to get feedback and input from employees.

5. Provide training and support

CM should include training and support to help employees understand and adapt to the change. This can involve providing training on new technologies or processes, as well as ongoing support to help employees with any challenges they may face.

By effectively managing change and engaging employees, insurers can make sure that their digital transformation efforts, along with any other organizational change, are successful and sustainable long term.

Is your enterprise attempting digital transformation but lacking a change management process to match your ambition? Then get in touch with Argano. We help large organizations develop detailed CM processes to facilitate change successfully.

For more insights for leading successful change, download our whitepaper Business Transformation 2.0: Building Your Digital Foundation with a Mindset for Change.