Sustaining the life insurance industry in the Fourth Industrial Revolution

Abstract

As the Fourth Industrial Revolution (4IR) continues to change the ways of doing business across industries, organisations around the world are grappling with the unprecedented challenges imposed by radical and widespread technological change. In the face of this dilemma, the South African life insurance industry has remained remarkably resilient, exhibiting very little adaptation in terms of structural, cultural, or business model innovation. However, the stable environmental conditions that once enabled this position for incumbent organisations are weakening.  Transformational change, like that in the adjacent financial services industry, is imminent and adaptation on the part of incumbent insurers will be vital to sustaining relevance. This research examines the organisational beliefs and capabilities of South African insurance companies regarding the 4IR in order to gauge the current challenges within the broader industry. Semi-structured interviews were conducted with 12 senior leaders and decisionmakers from across the industry. A qualitative inductive analysis shows the inhibitors and enablers of digital innovation within the organisations. The pervasive lack of trust, agility, and urgency within the sector are cited as inhibitors of digital innovation. Enablers include a continuous learning mindset within the organisation, partnerships within the broader ecosystem, and the role of senior leaders for shaping cultural attitudes and structures. Overall, these findings show a disparity between what insurers know they must do to proactively lead change, enact digital innovation, and remain relevant, and what they are actually executing. Recommendations are provided for addressing this gap.

Keywords: Fourth Industrial Revolution; life insurance; strategy; leadership; agility