The Challenge of Change and Disruption: Themes at Insurance Insider Pre-Monte Carlo Briefing 2016

Fifth Step attended a pre-Monte Carlo Rendez-Vous briefing during which a number of topics and themes were raised that touch on areas of interest to our clients. The first speaker at the conference, for example, outlined the challenge of change and the importance of managing disruption in the 21st Century as being a critical business asset.

Tourism has become a major industry for many countries and now contributes $2 trillion to global GDP and provides salaries for 100 million people but the downside to increased connectivity is higher volatility, said Vicky Carter Vice Chairman of International Operation, Guy Carpenter at The Insurance Insider's Pre-Monte Carlo Executive Briefing.

The Guy Carpenter executive who was talking in the Willis Auditorium on the 7th September 2016 said, however, that this is a massive opportunity for the insurance sector.

Business Model Disruption

The capability of achieving deep analytical insights into emerging trends and industries also present an opportunity for massive business model disruption. By the year 2050 there will be more than 50 billion devices connected to the internet and that is roughly 6 devices for every person. Carter said: “The IoT is happening everywhere at a blistering rate. We are in an era of connected thermostats that link to an intelligent energy grid.”

The links formed by technology have marched on uninterrupted at increased speed ushering a new phase for globalisation with the potential for disruption. Today they are disrupting established patterns in every sector of the world economy which means our world is changing rapidly and can play havoc with forecast and platforms that rely simply on extrapolating recent experience into the near and distant future.

Embracing Change with Flexibility

It is clear that constant change is here to stay. And with increased disruption to business models, burdensome regulatory requirements and a greater focus on M&As, the speed and complexity of this change is growing. The good news for our clients is that Fifth Step has the experience, scale and flexibility to work with them to embrace and manage every aspect of the changes they are going through.

According to Carter: “Many assumptions and habits that seemed so reliable have suddenly lost their resonance. We have never had more data at our fingertips yet we are in a world where forecasters are routinely caught unaware. This era is unsettling but presents opportunities but the real story of disruptive forces is not one of disruption but actually the opposite. In every industry changed by disruption the net effect has been total market growth.”

The traditional insurance and reinsurance business model is challenged even though it remains a significant source of revenue for many companies represented in this room, argued Carter. She said: “Many core products are now seen as undifferentiated commodities. New entrants are coming into the picture from across industry lines. Technology will make some aspects of insurance obsolete. But it will also breathe life into us.”

Technology on its own is Nothing

Carter concluded her speech with a final quote from Steve Jobs. “Technology on its own is nothing, what is important is that you have faith in people, that they are good and smart and that if you give them the right tools they will do wonderful things.”

People are of course the key to change. At Fifth Step, we usually work within our clients’ existing project framework. In addition, our change delivery function includes a Project Management Office capability, ensuring tight controls and enhanced levels of service delivery to the people we work with.

At Fifth Step we’re passionate about your business, getting to know your people, listening to and understanding the needs of the business as it changes in today’s fast moving financial services environment.