Negative capital market conditions, changing customer behavior, digitization, disruptive competition, the multifaceted demographic change, and persistent low interest rates are all converging.
1 However, for an industry that previously existed in very stable conditions favored by high growth and profitability for a long time, it is particularly difficult to change its previously successful behavior.2 Insurance companies are now responding with new strategies, but "clinging is human nature" (Katharina Ley) and "change means pain" (David Rock). Especially since the thesis is pursued here that changes are particularly difficult for people in the insurance industry. There is a pronounced conservative, risk-averse, and hierarchical thinking deeply rooted in the corporate culture and work practices.3 Since corporate culture encompasses almost all norms, values, and attitudes of the organization, it shapes all actions, decisions, and behaviors of all its members.4 The business models of insurers, aimed at banishing uncertainties and risks, lead to organizational cultures and employees who resist change. 5
Examining the impact of particular uncertainty on the management of companies whose business is to provide security was therefore an important starting point for this study. Rebecca Bent, an employee of an insurance company, interviewed executives of various hierarchical levels from different insurance companies.
Her expert survey agreed with other studies that the best strategies fail when they conflict with the corporate culture. Emotional resistance of employees was characterized as crucial and often the main obstacle to change.
1 See Zimmermann, G. (2015), p. 9ff.
2 See bcgperspectives (2016), n.p.
3 See Rahlfs, C. (2007), p. 128ff.
4 See Doppler, K., Lauterberg, C. (2014), p. 472ff.
5 See Rahlfs, C. (2007), p. 128ff.
Therefore, it is essential to involve all levels of employees as early and comprehensively as possible. An interviewee stated: "Companies are made up of people. People must implement the company's change in their daily work. A good corporate culture, which particularly considers employees, their ideas, and opinions, will be more successful in strategically repositioning itself."6
When asked about the most important criteria for a successful change process that takes the individual corporate culture into account, transparency and honesty were also mentioned. Perceived negative change is difficult, but uncertainty is considered even more harmful. For change communication, insurance managers and employees say: "better an end with horror than a horror without end."
The greatest danger for change projects also arises from lack of credibility and lack of role modeling by top management. Several respondents identified noticeable deficits in this area. This also included the need for leadership. In some companies, the management is too far removed from the employees and lacks a viable strategy.
Although Change Management is considered important, it is not given priority or implemented systematically enough in practice. Managers and employees in all the insurance companies represented in the sample are aware that the industry faces major challenges, especially with the prolonged low-interest phase significantly altering business models. However, all experts unanimously stated that none of the insurance companies knew exactly what the upheavals meant for them, where the need for change lay, and what solutions there were.
However, this was just a snapshot and a small segment of the market. There are positive examples where the crisis situation encourages courage to try new things. Some of these will now be examined.
Recently, the board of an insurance company based in Cologne unorthodoxly invited primarily those employees who were critical of the new strategy and upcoming changes to develop innovations in workshops. The best suggestions were provided with a decision-making fast pass and sufficient budget to implement them.
What was astonishing was that the best ideas came from employees who were considered particularly conservative and critical.
6 Interview Department Head, Insurance (2016), Line 27.
Following this initial small example, the change management of Axa Insurance AG will be presented as a case study, whose relevant change process began in 2007 with the integration of DBV-Winterthur. At that time, Axa initiated a multi-year process of strategic realignment, aiming to position itself as a "solution insurer" at the end. It was believed that for the customer, where they purchase their insurance product is secondary, with the priority being a quick solution to their problem.
The new Axa strategy was characterized by five key points. Four of the new focus points placed the customer at the center of all company actions, but Axa also recognized that employees must play a central role in any strategic realignment. Axa believed that only through internalizing this core idea could comprehensive solutions for customers be created. For this, the cooperation of all "team members" was necessary.
In the first step, Axa focused on firmly anchoring the new customer-centric philosophy in the corporate culture. The change communication concept was aligned accordingly. Within the change project, each employee was supposed to receive individual access paths to the new strategy to embrace the desired cultural change by the company. The Change project at Axa therefore began in 2009 with a series of workshops where executives presented the new strategy to all employees.
New and quite unusual for the industry was that employees were asked to evaluate the strategy in terms of its practicality and identify three key elements on how they could integrate the innovations into their daily work. Subsequently, employees were to document the implementation of the new work approach with a "passport" which was then visibly displayed in the office corridors for everyone to see.
A year later, Axa launched another company-wide workshop series to collectively review the achievement of the previously set goals. However, the review was not conducted top-down by executives but through a sparring system. That is, two teams from different areas, but with common interfaces, evaluated the collaboration and new work processes of each other's teams.
Since change takes time, and neither work processes nor cultural change can be sustainably implemented overnight, Axa consistently drove the cultural change forward. All employees were required to participate in one of the culture change projects each year. These included web-based training, job shadowing opportunities within the group, as well as impulse and best practice presentations by external experts.
The new strategy was also accompanied by smaller measures. Postcards with motifs that matched the three key points of the strategy were provided to employees, as well as discussion cards depicting a variety of everyday work situations in which there was a contradiction to customer-oriented behavior. These were meant to be discussed among colleagues to develop solutions. Periodically, there were "Did you know?" messages informing employees of strategically relevant information upon starting their PCs. Regular employee surveys were also conducted, and the results were directly handed over to the relevant business units. The subsequent task was to discuss and analyze the results, develop change management measures based on the results, and implement them in the project.
Although measuring cultural change is not easy, at Axa, the focused and participatory change management approach, which was innovative for the insurance sector, led to a significant improvement in strategic core indicators of accessibility and attention at the end of the project.7
Not every change can be implemented at the same speed in every company. Standard concepts alone should not be relied upon. Existing structures and the company's history must be taken into account. This also includes recognizing the continuity and consistency, which are still considered strengths of insurance companies.
At the same time, it is important to accept change as the norm. Due to the ever-increasing dynamics of the business environment, adaptability – and not size, market share, or brand recognition – is essential for organizations. While change seemed to be characterized mainly by singular results for a longer period, it is now a permanent task.8 Therefore, change should not (anymore) be seen as a crisis but as an exciting ongoing task and a core competency to be aimed for.9
Of course, not everyone is suited for constant change, probably even the fewest. And some may be at risk of being emotionally overwhelmed. This is why innovation in change management itself is needed. John P. Kotter suggests making companies agile by establishing a second "operating system" alongside the existing organization. Those who are progressive and open to change form an "army of volunteers" that drives product, process, and management innovation in advance.10 There is room for testing concepts like corporate democracy, Holacracy, Agile Management, or Scrum – away from power struggles and harmful internal politics.11 Kotter proposes that the dual operating system does not replace the existing organization but significantly enhances its ability to change. The volunteers in the "turbocharger system," according to Kotter, should make up about 10% of the workforce and be characterized by a mentality of "I want" rather than "I must." This mindset should then shine through the entire organization and fundamentally change the overall culture. Kotter's approach is psychologically well-founded, as only when employees can actively shape the change will it be adopted and the ability for change management be firmly embedded in the organizational culture.12
7 See Schwarz, S. (2015), p. 155ff.
8 See Ridder, H.G. (1999), p. 239. Steinle, C., Eggers, B. (2008), p. 18ff.
9 See Iskan, S
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