Global Insurer

The Challenge

The client was a very successful UK and international commercial lines insurance provider. Changes in the UK market, driven by the company’s success and new technology, had encouraged competition to provide online services at aggressively reduced prices. The organisation was aware that its superior margins came from good customer service; that it was not, but could be, the lowest cost provider; and they were threatened with losing market share. Rather than descend into a price war, the client sought a better solution.

Our Approach

We started by considering the real business the client was in. The client defined their business as insurance, but research showed us that customers wanted to reduce perceived business risk and purchased products accordingly. So then we identified segments in the business risk business. Surprisingly, we found that insurance products accounted for only 11% of business risk reduction therefore leaving vast areas of untapped potential. Based on the organisation’s strengths, appetites and through a series of workshops with the board, we developed a 5 year strategy that would increase profit margins and market share.

The Outcome

This project required a large amount of in-depth research over a long period of time. We involved the board in analysis and decision making throughout so that they owned the strategy rather than have one imposed by external consultants. At the final presentation, the CEO rejected the strategy and instead the organisation developed a low-cost online offering. After 20 months, with falling margins and high costs the company was taken over by a competitor

What We Learned

Despite close involvement of all the directors in developing a radical customer-driven strategy, the CEO had remained distant due to demands on his time from investors. This meant that the CEO listened more to his conservative, industry-bound investors than to his customer driven board. In the event, our inability to directly engage the CEO proved the undoing of the project and ultimately the organisation itself.