Transformation meets Columbus

Christopher Columbus's 1492 journey and the transformation of the insurance industry may seem vastly different on the surface, but intriguing parallels emerge. Historical explorations and modern entrepreneurial endeavours have long been compared to illustrate principles, challenges, and opportunities. It also offers valuable insights for both startup entrepreneurs and incumbent managers seeking internal transformation and innovation.

Here are my thoughts:

It starts with a vision based on an idea

Columbus embarked on his journey with the vision of finding a new trade route to Asia. He was driven by a desire for exploration and discovery, and by the belief that such a route would be shorter and more profitable for trade. His vision was ground-breaking and aimed at challenging the existing knowledge of the world's geography. Similarly, insurance transformation should begin with a visionary goal like disrupting traditional industry value chains, introducing innovative products, exploring new ecosystems, or enhancing accessibility for retail clients.

The team is crucial

Columbus assembled a diverse team of sailors, navigators, and other experts. The success of the expedition depended highly on the skills and collaboration of this team and, of course, his own capabilities in leadership. Likewise, for any transformation, building a capable and diverse team is essential. This team should include leaders with complementary skills, experts in insurance and technology, and individuals passionate about the vision.

The pitch for funding

Columbus pitched his idea to potential sponsors and convinced them to fund his expedition. His pitch included the promise of new trade routes, potential riches, and the spread of Christianity. This pitch fell on fertile ground. Columbus secured funding from Queen Isabella and King Ferdinand of Spain. They provided him with the necessary resources, including ships, and supplies.

The modern sales presentation (pitch deck) aims at attracting investors or to convince the board. Typically, these decks outline the problem, its solution, the market opportunity, the underlined business model, and the team's capabilities. The goal is to secure funding for the outlined venture. Business plan and economics are important, however, recognition and prestige, influence and impact for those who support the venture are not to be neglected.

By the way, does anyone happen to have the pitch deck from Columbus?

Managing risks and uncertainty

Columbus faced significant risks and uncertainties during his journey. The voyage was highly risky, and the crew faced the unknown challenges of uncharted waters. Insurance transformation is no less dynamic. It happens in a very competitive environment and must encounter many uncertainties related to market acceptance, regulatory changes, and technological advancements.

The following measures will reduce the risk of the endeavour and increase the likelihood of any success:

(1) Well planned is almost half done

Columbus meticulously planned the voyage, considering factors such as navigation, supplies, and potential challenges. The success of the journey hinged on detailed planning. For an insurer strategic planning is key, too. The project requires market research, competitor analysis, and a roadmap for product development and market penetration. These are the classical things. However, it requires also a clear and unconditional commitment of the entire organization, clear decisions, and communication. Unfortunately, this is often missing, which leads to resistance to change, ineffective implementation, uncertainty, wasted resources, and much more.

(2) Handle your resources with care

Columbus had to manage limited resources on his expedition, including food, water, and the endurance of his crew. Efficient resource management was crucial for the success of his journey.

Insurers must carefully manage their resources, too. This includes not only financial capital but also human resources and management time. Efficient allocation and management of resources are vital for the sustainability of the transformation initiative. Cooperation and optimization of e.g., product development process, allow for more products and projects in the same time, thus increasing the output and the likelihood of having successful projects.

(3) Stay flexible – not indecisive

Columbus had to adapt to unexpected challenges, such as changing weather conditions and the discovery of the Americas instead of a direct route to Asia. He needed to learn and adjust his plans accordingly. This requires for allowing learning and changing existing plans without questioning always and constantly the entire endeavour and the vision.

Insurance business transformation also needs adjustments from time to time as the environment is dynamic, e.g., inflation, risks, interest rates, and regulation. A strict and rigid 5-year-plan is counterproductive. The lack of flexibility will not handle unforeseen circumstances properly. It will also not enable the use of opportunities coming along. Transformation is an iterative process that benefits from continuous learning and improvement. A rigid plan may not encourage ongoing feedback and adjustments based on lessons learned during the implementation.

(4) Do it!

Columbus and his team executed the plan, navigating the Atlantic Ocean and eventually reaching the Americas. The implementation required adaptability and resilience in the face of unforeseen challenges. In the ever-evolving landscape of the insurance industry, innovative strides are being taken. Among these, seamless integration into diverse ecosystems and venturing into the area of embedded insurance stand out as noteworthy initiatives that demand a place on insurers' strategic agendas. The linchpin for initiating a pilot project (proof of concept), lies in the expeditious exploration of opportunities, probing both their breadth and depth. Swift implementation not only yields rapid insights but also ensures cost-effectiveness, making it a pivotal element in the transformative journey of insurers.

Impact & Legacy

Columbus's journey, while not reaching India, had a profound impact on world history. Similarly, insurance transformation can bring positive changes, disrupt traditional practices, and leave a legacy by providing individuals with more tailored, efficient, and transparent insurance products and services. By drawing inspiration from Columbus's journey, the insurance industry can navigate its own uncharted waters, embracing challenges and opportunities for a transformative future.