Earlier this year during the press conference about Microsoft’s acquisition of Nokia’s smartphone division, the CEO of Nokia concluded his speech the following way “We didn’t do anything wrong, but somehow, we lost”.
Many analysts wrote articles about the reasons behind the fall of Nokia, that once sold over half of the mobile phones in the world. But instead of focusing on the past, let’s focus on the present.
There is a saying about smart people learning from their own mistakes and wise or smarter people learning from those of others. We can apply the learned from the Nokia case to a different industry: Insurance, and pinpoint ways to avoid the same destiny.
So here are some lessons learned:
1. “Keep on doing what we’ve always done” doesn’t work
I think the first important question when reading the above statement is: “You didn’t do anything wrong according to what or whom?”. And I think the implied answer is: “According to the <we’ve-always-done-things-this-way> rulebook”. So, here is the first lesson. It’s time companies start questioning the old, familiar “way of doing things”, because it simply does not work in this new, wonderful, fast-paced, full of tremendous opportunities and thus ever changing world.
In the case of the insurance industry, here is something worth rethinking. The old recipe of spending months and years in planning a strategy and then tens or hundreds of millions in trying to implement it doesn’t correspond with the reality of 21st century. Things move and change in minutes, the strategy or product created today will not be relevant in 12 months. Insurers need to have the tools that provide them the flexibility to adapt and change in the same pace the world around them does.
2. Not undertaking something new can be a mistake on its own
It’s not enough to not do anything wrong. In order to survive in the ever changing environment, companies should not try to avoid failures by avoiding action all together. New ventures are needed, because as we discussed in the first paragraph the world is moving so quickly that the already known actions are often not applicable or not enough. Change needs to be met with a changed behavior and new proactive attitude.
Digitalization and offering a 100% online insurance process are things insurers need to undertake and do right now. Companies that decide to wait and see might simply miss the time window.
3. It’s not about loss anymore, it’s about survival
Doing everything how it has always been done and avoiding risk by not trying out new things might have lead to financial losses for big companies in the past. Now it can be a direct road to an overall disappearance. It’s not about avoiding losses anymore, it’s about survival. Insurers need to embrace change and take off the fear glasses, because they simply obscure the view of all the wonderful opportunities the world offers.