Leading in a digital world: strategy, risk, and business transformation

Financial Strategy, Innovation and technology
/ Insurance and Asset Management

Insurance Governance Leadership Network, July 2014

“My sense is that standing still will not be an option, so how do we evaluate moving forward? Are we talking about small steps or radical business-model changes?”  


The digital transformation of the insurance sector is real, accelerating, and a matter for ongoing board consideration, according to leaders of many complex insurance groups. The digitization of insurance encompasses many trends, including the emergence of new technologies, changing customer preferences, and the advent of new competitors. Insurers feel the impact of disruption across the entire value chain, from underwriting and risk management to claims. Appendix 1, on page 11, provides a summary of selected disruptive forces and implications for the insurance value chain.

On June 4, 2014, Insurance Governance Leadership Network (IGLN) participants met in New York to discuss digital transformation. For a list of meeting participants, see Appendix 2, on page 12. This was the first of what will likely be many conversations on the topic. As participants sought to better understand of the implications of this transformation for insurers, it became clear that the topic cannot be neatly boxed and delegated to a department, executive function, or a committee of the board. The increasing digitization of insurance raises issues about strategy, risk, industry and organizational structure, workforce, and cultureissues that, in the final analysis, require the full board’s attention. There is a lot to sort through and much is at stake. Several participants went so far as to suggest that digital transformation is a sort of industry litmus test, one that will identify future industry winners and losers.  

During their conversations on transformation, participants identified several sources of tension that are driving digitization higher up the board agenda and that have implications for resource allocation, strategy, and organizational structure. This ViewPoints centers on three of these tensions:  

  • Creating a consistent yet personalized customer experience across the group

  • Building agile and responsive structures in the face of numerous constraints

  • Understanding regulation as a source of strength and challenge