business development and profitability - Driving sustained business development and profitability for insurance industry

Sustained business growth is essential for the insurance industry along with profitability, as such, it is crucial to understand how businesses need to move ahead in the right direction. To begin with, the much-hyped theory in this regard is the “alignment principle”. Now, what do we mean when we stress upon mission-driven management is pretty much clear, that is, management of a business in a way that supports its end-goals or mission.

In the insurance industry, it is absolutely vital to fulfill the business goals for smooth operations and business goals need to be attained apart from the overall mission of the insurance organization. It is here that achieving this success requires the alignment principle or alignment of procedures and executive operations to the mission, vision and values of the organization.

Very often, insurance organizations will suggest that they are well aligned in this regard, but on closer inspection of their processes and executions, it is often observed that they are far from it. When things are not aligned, they do not support the mission and goals of the organization. In fact, they start working against the business bringing it to a depreciation level

It is also important to note just about how much of an alignment or misalignment can affect the business and its bottom line. To understand this, an applicaton of the lean six-Sigma theory is required according to which approximately 50% of all activity is dissipate and only one-third of the entire activity is actually value-added. The remainder of which is termed as “necessary work”. In the insurance industry, precisely this could mean those tasks required due to E&O protections, compliances and so on.

A good majority of the dissipate work is created when strategy remains unaligned to business conduct leading to inefficient processes and workflows, inappropriate time and resource allocation and prioritization as well as lack of standardization.

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