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Article

Why Wait Until Now?

By Larry Wood
Senior Consultant

For the past several months, the popular and professional media have been inundated with articles discussing extraordinary changes being initiated in response to the current economic situation. While some of these changes are innovative, and some both startling and disturbing, many fall into the category of conventional, sound business practices. As I read these articles, I have to ask myself, “Why did we wait until now to do this?”

In the property and casualty insurance industry, there are several examples of this.

Why wait until now to make sure that staffing levels are appropriate and that productivity is measurable and meeting expectations?

Why wait until now to make sure that pricing makes sense from a profitability point of view?

Why wait until now to carefully consider technology decisions based on cost/benefit analysis and return on investment?

The answer, in many cases, is that companies have not waited. The soon-to-be-released Nolan Property and Casualty Survey Report includes the analysis of information collected last year that included asking executives to identify their top priorities. Key responses included:

Exercising close management of expenses to ensure appropriate allocation of resources

Improving customer-centric service, focusing on differentiation in the marketplace

Driving organic growth

Investing in talent management; upgrading staff skills and productivity

Leveraging existing technology and making only selected, well-justified purchase decisions

Clearly, these priorities are important regardless of how the economy or the financial markets are behaving. As in the past, the formula for achieving the above objectives is a combination of continuous-improvement activities and the regular review of business practices, processes, and technology.

The continuous-improvement effort is critical in applying constant pressure in order to make ongoing incremental improvements in the areas of operating expenses and customer service.

In addition to this, however, it is critical that a periodic end-to-end review of business processes and technology be conducted. This in-depth review ensures that new developments in processing, technology, and management techniques are examined and incorporated into business practices, where they are deemed beneficial and cost effective.

The need to maintain and improve process and technology performance does not change based on the prevailing economic climate. Indeed, during difficult times it is even more important to have well-thought-out and efficient business processes and supporting technology. It should be a part of standard operating practices.

The true answer to the question, “Why did we wait until now?” is that companies in the property and casualty insurance industry have not waited and will not suspend or delay these critical activities, because they will help assure our success during these difficult times and into the future.