Editor's note: This is the second part in a three-part series on purpose-driven digital transformation in insurance.
Why it matters: purpose can provide an edge
In considering a purpose, insurance companies must take into account the potential business case, based on tangible benefits. Research shows that purpose-driven businesses have a greater ability to deliver revenue growth. Plus, they excel at executing change, according to our research. In a survey of executives sponsored by EY and Harvard Business Review Analytic Services, titled “The business case for purpose”:
• 89% said a strong sense of purpose drives employee satisfaction.
• 84% said it impacts the ability of a company to transform.
• 80% said it helps increase customer loyalty.
Other research has shown that purpose-led brands are more successful at acquiring and retaining customers. Customers seem to expect companies to have a broader purpose: only 6% believe a company’s only purpose should be to deliver shareholder profits. Purpose matters to employees as well. One study found that, beyond having more satisfied and productive workers, purpose-led companies are three times more likely to retain employees — a key consideration for any industry facing a talent war or widespread retirements.
Despite the power of purpose, few companies currently run in a purpose-driven way. According to EY research, only 46% of executives said their company has a strong sense of purpose, while another 44% said their company is trying to develop one.
Insurers seeking purpose: understanding the opportunities
For insurers, purpose can take many forms. A purpose can be defined in terms of demographic segments or currently underserved groups. In all cases, the purpose should address fundamental human needs, as well as provide a road map for transformative change.
A range of megatrends offers insurers opportunities to find purpose:
• Managing health care costs and increasing access to health care as populations age in some regions of the world and grow dramatically in others
• Increasing the financial well-being of citizens in emerging economies and generating retirement income for huge numbers of middle-class citizens in mature economies
The insurance industry is central to helping make the planet a healthier, wealthier and safer place, provided it uses its unique societal position to take a leadership role. Such leadership will be abetted by a clearly articulated purpose. Further, all of these issues could have a major business impact. Whether it is primarily positive or mostly negative depends largely on the action of industry leaders in the relatively near term.
Naturally, some insurance companies will not be willing or able to take on some of these trends. More targeted purposes can be just as meaningful. Becoming easier to do business with and offering more efficient, effective and satisfying experiences can serve as appropriate early or interim purposes.
Whatever a company’s stated purpose, well-designed end-to-end experiences are essential to bringing it to life operationally. These experiences are especially important to the most critical customers and distribution partners. For example, recent carrier investments in agent portals that provide “everything agents need to be successful” demonstrate a purpose that embraces the agents rather than merely focusing on an (important but tactical) outcome such as “increasing quotes.” At the same time, the overall experience “operationalizes” the company’s purpose.
Unique business require unique purposes
Business purposes are by necessity various and diverse. They are unique because they should reflect a company’s individual culture, industry and products and services. Some examples include:
• New York Life: “To be here when our customers need us.”
• Southwest Airlines: “ To connect People to what’s important in their lives through friendly, reliable, and low-cost air travel.”
• Kellogg’s: “Nourishing families so they can flourish and thrive.”
• Ben & Jerrys: “To make, distribute and sell the finest quality all natural ice cream and euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment.”
Melanie Henderson and Jeff Scheerhorn are executive directors, and Carolin Axelsson is a senior manager, for EY.
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