Gorillas that we missed: introduction
More than ever the insurance sector is under increasing pressure from competitors and customers to transform how it operates.
But with transformation comes cost. There are the known costs of planned projects or the implementation of new industry standards such as IFRS 17, and then there are the hidden costs. These are the costs that surface even with meticulously planned projects.
As a consultancy in the insurance industry, MBE has witnessed and harnessed the power of automation and process simplification to reduce waste, improve accuracy and unlock value in multiple actuarial transformation projects.
But what about the hidden costs of projects perceived to be completed successfully?
At MBE, we have found that there are often unforeseen (and unwanted) consequences of process improvement measures, which could significantly reduce the ongoing benefits of the project.
This is not, however, a reason to dismiss the benefits of these measures. With some awareness, most pitfalls can be spotted and avoided completely or addressed at an early stage.
When it comes to actuarial transformation projects we have identified that the hidden costs of process improvement mostly emerge in four ways:
- Inhibition of Flexibility
- Human Resource Mismanagement
- Locking in Waste
- Mismanagement of Exceptions
Over the next few weeks, I’ll be providing insights into each of these fundamental areas, explaining how we see these pitfalls manifest in practice and how they can be successfully addressed.
Why Gorillas that we missed?
“The Invisible Gorilla” was an experiment conducted by Christopher Chabris and Daniel Simons.
Participants were asked to count the number of passes in a video showing some actors passing a basketball to each other. At some point during the video, someone in a gorilla suit comes into the frame, thumps his chest and leaves.
The study participants were so focused on their task that half of them failed to notice the gorilla.
This shows that even the most diligent workers, with the best intentions, sometimes lock inefficiencies into their processes because they are unable to take a holistic view.
Find out more about The Invisible Gorilla at http://theinvisiblegorilla.com/.
Contact us to find out how we can help you successfully deliver your actuarial transformation project.