Insurance Related Experience
An international life insurer: Large scale restructuring of their organisation for higher efficiency and improved agility
A top 20 European life insurer sought to restructure its large and unstructured Group centre for higher efficiency and agility. Our challenge was to create real and lasting change which meant ensuring commitment from all stakeholders and setting ambitious, yet sustainable, targets.
Our approach centred on our 'survival and strategic minima' framework which divided roles into true corporate centre activities and other functions. In conjunction with the client, we assessed the absolute "survival" minimum organisation required for legal and governance purposes. The roles required to pursue and implement the strategy were then identified and added. This resulted in the 'strategic minima' for the organisation's size.
After 6 weeks, new guiding principles had been approved, target roles for each unit were defined and their 'survival and strategic minimum' size had been quantified. Within 12 weeks, our client had approved targets and measures for reorganisation and cost reduction providing 20-40% savings. Implementation of the action plan started within 24 weeks.
A large global insurance company: Developed new market strategy, a blueprint for organizational design, training for the sales force and a framework for risk governance
A large, global insurance company identified an opportunity to enter a new market, and set an ambitious new business target and go-live date. However, they realized that there were several roadblocks in the way. Knowledge of the market and product was scarce, the entry proposition lacked definition, and the competition for resources with other high-profile internal projects was delaying progress.
The first step was to help the client up the learning curve, increasing their understanding of this new market and the key drivers of successful entry. Armed with information and insight, it was then possible to help the client shape the product to match customer demand. Our client entered this new market one month ahead of schedule, and in addition, we helped lay the foundation for continuing success, by providing a blue-print for the organizational design, training for the sales force and a framework for risk governance.
A global life insurer: Created risk exposure boundaries across the business for robust strategic planning
We developed and implemented a risk appetite framework across the business lines for a global life insurer. Our challenge was to develop the overall risk appetite statement (including definition and quantification), to create a process for allocating risk exposure boundaries and to calculate actual risk exposure ‘triggers’ by risk and business unit.
Using a combination of mathematical analysis and management judgment, we set risk exposure boundaries. Following the specification of the risk framework, we created a reporting process which ensured that relevant risk exposure information was available for the Group’s strategic planning dialogues. This client has since gone through two rounds of reporting risk exposure information at both the Group and sub-Group level and examined the risk implications of various strategic alternatives relative to the Group’s risk appetite.
An insurance company: Developed and launched international strategy
This international insurance company had a strong domestic presence with a scattered international portfolio focused primarily on Europe. They engaged us to develop their international strategy and map out implementation possibilities and the implications for the organization.
First, their core competences and points of competitive advantage were identified. In parallel, we analyzed and reviewed the client’s existing portfolio, and then based on our findings, developed strategic options of business models and markets. A quantitative business case was created for each option, including the risk diversification impact on the Group.
The Board approved our strategic recommendations which set into motion an overall implementation roadmap with deliverables for the next couple of years. In the immediate term, implementation actions have been launched along all suggested strategic directions, and recent acquisitions have been made in line with our analysis and recommendations.
A financial conglomerate: Created new value measurement framework which resulted in a market uplift of 1 billion Euros
After a series of mergers, a financial conglomerate found its life insurance business in a deep crisis with the value of that business misunderstood by investors. They chose Oliver Wyman to develop and implement a new value measurement framework, and to use the output to illustrate the success of the management’s strategy to the investor community.
Along with the new value measurement framework, we also advised on the
disclosure strategy, focusing on the progress achieved to date rather than purely focusing on the improved measurement capabilities of the measurement model.
Most analysts from major investment banks favorably revised the valuation of the life insurance operations after the disclosure event which fed through to the share price of the whole Group. The uplift in market capitalization was estimated to be approximately 1 billion Euros, or 4% of market value.
A European insurer: Revived profitability and covered transformation costs with cost savings
After several years of declining productivity, a European insurer’s sales force was no longer profitable. Oliver Wyman came on board to help them address a number of problems including: poor sales incentives, a selling/service ratio that was out of sync and an inflated management structure.
Our team designed a new sales force model, including roles and responsibilities, incentives, performance management framework, and a new sales management organization. We focused on centralizing and automating servicing and administration, improving productivity with new laptops and point of sale applications, and supporting the negotiation with unions and communication to staff.
Within six months of implementation, the client had returned to profitability, and the implementation costs for the transformation were covered by cost savings within just 18 months. The business is growing again, recruiting additional sales agents after contracting for many years.
The bancassurance arm of a leading European insurance group: Developed a blueprint for an innovative business model
Our client saw an opportunity to be an innovator and seized it. They identified that most companies are still at the starting point of developing their response strategies to serve a growing and more demanding customer group that is 50+. Their ambition was to leapfrog ahead of the competition by introducing an innovative and unique business model.
We challenged their existing conceptual ideas and built upon them to develop key success parameters for the business model on a more granular level, a business case and an implementation plan.
After only six weeks, the client was in a position to confirm the conceptual and financial soundness of the business model. With a detailed implementation blueprint, the client prioritized potential partners and mapped out key milestones. Operations are slated to start within one year.
A global multi-line player: Developed their large corporate insurance strategy
Under new leadership and with renewed ambition, a large corporate insurer wanted to define a vision for their large corporate business with all options, including an exit strategy, on the table. In order to assess the strategic opportunities in this space, we used detailed proprietary market sizing and a competitive analysis to establish the competitive landscape by line of business and geography. This engagement included: reviewing our client's capabilities and identifying the gaps to the best practices across the value chain and by line/industry; developing and prioritizing strategic options considering market opportunity, strategy fit and key risks; and building a detailed operational plan around chosen options including distribution, capacity management, line/segment/attachment focus and the underwriting approach.
A global bancassurance player: Used consumer insights to create breakthrough innovation
A global bancassurance company wanted to enter the direct to consumer P&C market. They asked Oliver Wyman to help them develop a strategy, including identifying target customer segments and the appropriate product and service propositions, brand and launch strategies, and quantifying the business case which needed to clear their hurdle rate once established.
We approached the challenge in four ways:
1. Customer value proposition. This work included high-level quantitative market analyses, as well as qualitative consumer research on buying preferences and customer perceptions.
2. Operational considerations. Our team outlined mission critical enablers and investments and also carried out a high level costing of them.
3. Channel management. From best practices and case studies to dealing with channel conflict, we reviewed the levers to pull in developing channel management strategy such as communications, service, and incentives.
4. Brand positioning. We outlined brand options for current master brand and sub brands.
