RESEARCH REPORT
Getting past the transformation euphemism
How insurance outperformers tackle change and deliver sustainable results
5-MINUTE READ
June 25, 2025
In brief
- The term "transformation" has become a catch-all for insurers, but not all change programs are created equal and lack of clarity is taking a human and financial toll.
- Outperformers, those who get change right, improved premium revenues by an average of 8.1 percentage points and reduced expense ratios by 2.6 percentage points.
- In relation to their peers, those outperformers over-index on automation and workflow management, digitization and operating model streamlining.
What outperformers stand to gain
The key to success in change programs lies in precision and targeted actions. Our analysis shows that the group of Insurance Outperformers that we have identified through financial analysis stand to gain improved premium revenues of 8.1 percentage points and reduced expense ratios of 2.6 percentage points more than their peers.
What’s driving transformation?
Technological advances and innovation requirements are the top two drivers of transformation programs in insurance. New technologies like AI and generative AI are crucial for driving widespread improvements in operations and customer interactions.
Question: What are/were the primary drivers of your transformation program? (Ranked Top 3)
Avoiding the transformation euphemism trap
While the label “transformation,” is attributed to most change efforts in insurance today, the reality is much more nuanced. These programs typically start with a clearly defined purpose: to execute a specific portfolio of initiatives to deliver value. But over the course of the program, the term "transformation" could become diluted, dissolving into a catch-all used to bundle separate activities, secure alignment internally or simply to tie-down budget. This takes a human toll on the organization in the form of:
- Transformation fatigue: Employees living in a state of perpetual change experience frustration, disengagement and burnout.
- Erosion of confidence: Frequent announcements of new transformation programs signal that something is fundamentally broken, fueling skepticism and internal resistance.
- Lack of clear ownership: As “transformation” titles proliferate across departments and business units, clarity around who owns the transformation agenda can be lost.
- The “fad diet” fear: Only 15% of insurance executives believe the cost savings realized from their transformation programs are largely sustainable.
Transformation program framing
Question: How was your program perceived and executed in your organization?
What outperformers do differently
Outperformers define their transformation programs with specific, measurable goals, ensuring that everyone in the organization understands the purpose and expected outcomes. By setting clear expectations, they avoid transformation fatigue and maintain employee confidence and engagement. Furthermore, they focus on building long-term capabilities, such as tech literacy and data analytics, to drive channel optimization, product innovation, and competitive pricing strategies. Most of the efforts we analysed were actually platform modernizations. The top three areas where Outperformers over-index in relation to their peers are:
01
Automation & workflow management
82%
of outperformers leverage automation and workflow management to streamline operations, compared to 72% of their peers.
INSURER PERSPECTIVE: “Our objective was efficiency and productivity to increase the bottom line and facilitate growth. Legacy systems needed to be removed so we could rely instead on data analytics and cutting-edge tools. We needed to move from paper to STP [straight-through processing], digitizing processes, and implementing the infrastructure to be able to use machine learning and AI.”
02
Digitization
79%
of outperformers invest in digitization to enhance customer interactions, compared to 65% of their peers.
Case Study: One insurer, for example, has implemented a new SAP sales steering system and, in the IT security area, has implemented new identification and access management systems and decommissioned legacy systems. Claims are now digitized for customers. Investing in new systems has helped sales partners do their jobs more effectively and smoothly.
03
Operating model streamlining
55%
of outperformers focus on streamlining and consolidating their operating models, compared to 44% of their peers.
INSURER PERSPECTIVE: “Cost cutting and operational efficiency have almost become business as usual. What’s needed now is building capabilities. Tech literacy is the key: data analytics, a bit of Python code, RPAs. Also, [our] people need to understand financial services and how these can be integrated with insurance products.”
Impactful change without illusion
What this demonstrates is that small gaps in clarity and execution can lead to large performance gaps. Mastering the discipline of precise transformation is essential to become an insurance outperformer.