Project management in the insurance industry has matured a lot in the last few years and has already shown success: fewer project failures and performance improvements.
Streamline your Insurance Processes with Project Management
Linh Tran, Tuesday 25 October 2016 | Reading time: unknownBut that doesn’t mean that insurers should rest on their laurels, because everything can be improved as seen by the still high number of costly project failures in the industry. Which is why it’s important to stay focused on continually improving your project management processes. Here are the top 5 project management mistakes insurers make and tips on how to avoid them.
1. Formal PM structures and processes are missing
Project management can’t be done half-heartedly. It takes commitment from everyone in the organization – with upper management at the forefront – and there have to be formal project management structures and processes. Informal processes or a lack of clear structures are a recipe for chaos and project failure, as nobody knows what they are supposed to do.
The bigger your organization and projects are, the greater the need for formal structures. It’s best to adopt traditional project management best practices and adapt them to your individual needs. Just like a product, every project runs through a life cycle.
2. Inefficient task silos
Scheduling and managing tasks is one of the key aspects of project management. One mistake insurers often make is to let team members fall into the trap of just focusing on tasks that are within their responsibilities. This inflexibility creates inefficient silos and neglected tasks.
The first step to effective task management, is to break your project down into manageable tasks. Be as specific as possible without going into too much unnecessary detail. For example, introducing a new insurance policy involves much more tasks than just the selling of the policy: Computer programs have to be configured, and you also have to forward the information to all stakeholders, including the state government. The next step is to allocate the tasks to the right resources and create a schedule. Effective scheduling is only possible if you take constraints, dependencies and assumptions into account.
3. Lack of communication
Insurers work with a multitude of stakeholders, from clients to underwriters to government officials. Which is why communication is key to manage the requirements and expectations of stakeholders. It is also important to communicate to all team members what their responsibilities are and what outcomes are expected of them.
Effective communication is only possible if you have the right communication channels and processes in place. Define how team members communicate with each other: email, telephone, or messengers such as Skype and more. Having clear communication processes in place ensures that everyone is in the loop and gets all the necessary information. E.g. if you want to introduce a new policy into your product folder, you need to make sure that all agents and underwriters have all the information to effectively introduce the policy to their clients.
4. Insufficient risk and change management
Risk management is an essential part of insurance management and insurers are very good at evaluating the risk of policy holders. What they often neglect is to evaluate the risks of project management, particularly the costs of project failure.
With the right risk and change management processes in place, insurers can increase their return on investment, productivity and competitive edge. You always need to have contingency plans to be ready for any change or unforeseen events, such as changing client demand or demographic change. You can’t sell the same policy to baby boomers and millennials after all.
5. Not using the right tools
Software tools can help organizations increase efficiency and effectiveness, but only if they use the right tools. One of the biggest mistakes that organizations make is that they have a plethora of different tools for different tasks. Or maybe different departments use different tools, which might not even be compatible with each other.
It’s best to have one centralized project tool with which they can plan and schedule project, but also one that allows team members to collaborate and communicate with each other. The right project management tool can enable insurers to work smarter and more efficiently. It can also reduce the risk of project failure as you won’t lose sight of your project status. You can track resource capacities and allocate tasks based on free capacity and skills of your employees and underwriters.