Editor's Note: This case study was written by Ernst & Young LLP and in no way does its publication here constitute an endorsement on the part of PC360 or its parent company of EY or its business services. However the story it examines, of Westfield Insurance's occupational change management saga, takes on nearly universal themes from the business world and is something that every insurance professional, especially those in leadership positions, needs to read. 

The effect that large-scale change could have on morale and engagement of employees is a major concern and potential risk for operational leaders. A decrease in morale and engagement may impact customer service, which is also a significant risk. Additionally, a workforce that is not highly engaged will resist change — taking longer for expected benefits to be achieved.

Managing these risks is a priority for insurance leaders today as the industry drives through an era of extensive change. Many insurers are undertaking major change initiatives to transform their operational capabilities, modernize technology and adjust to new market realities. New target operating models enabled by new system implementations have been especially prevalent in the industry, as outdated legacy systems prevent many carriers from delivering the flexible and personalized service today's consumers demand. Not managing organizational change management (OCM) properly as a part of an operations transformation program can impede the realization of anticipated benefits, with the cause frequently tied to organizational or people-related factors. Specifically, lack of employee engagement results in people and teams across the organization resisting strategic change and refusing to adopt new tools and processes. The impact on performance can be significant, as customer service is disrupted and the expected value from very large investments never materializes.