An Introduction To Strategy for Insurance Executives

Every insurance company (companies operating within the insurance ecosystem, so this can include carriers, brokers, TPAs, MGAs, insurtechs etc.) I have come across believes that they have a strategy and are executing a strategy.

And almost every single time, I beg to differ with the presenters, and that is very hard to communicate. It’s like telling someone they stink, are not attractive, and have something in their nose or teeth.

What we mostly see is activity. Activity is not a strategy.

Want to know what else ain’t a strategy? A plan. But a plan is just a formalized activity. It’s just of list of things that needs to get done. It’s part of a strategy – but is not a strategy!

So what, then, is a strategy?

There are countless books, courses, university degrees, and nicely paid consultants who will tell you what a strategy is. I am going to boil it down for you. I think that Roger Martin, an academic, author, and consultant, has the simplest definition of strategy. Paraphrasing – strategy is a cohesive set of decisions that defines the playing field and execution activities where you have the highest probability of success.

But, but, but, you can drive a truck through that definition.

This is true. It seems vague or not specific enough, but if you isolate the elements of the definition and think about satisfying those elements, you will see that it is quite comprehensive. It is also flexible, which it needs to be because we are dealing with forecasting the future, which is fraught with failure.

The best way to see this and to work on a strategy is to work backwards.

What Does Success Mean to Your Company?

This is the critical piece to the strategy recipe. Honesty here will dictate the essential decisions that need to be made to achieve that success. Here are a few questions that I think are helpful in guiding your thinking about answering how you define success:

  • Who are your stakeholders?
  • Who do you report to?
  • What is their definition of success? Is that achievable? Can you quantify and qualify the risks associated?
  • What resources do you have? Your competitors?
  • What does the market desire? What is it that they may desire? Can your company deliver those things?
  • What are the various opportunity costs?
  • Will your stakeholders appreciate AND reward your success? Will your success turn off your customers (oh hell yeah that happens)? Will your success invite unwelcomed regulatory scrutiny?

The answer to these questions creates the compass, or general direction, for your company. It will tell you to play on playing field one and not playing field two because playing field two is dominated by legacy incumbents with massive resources who you just can’t compete against. These answers will guide you toward those activities that offer a higher degree of achieving success. If your stakeholders are going to require a 25% ROI, then you know to ditch any strategy that cant deliver on that.

I know anyone who just read that last paragraph will think that this is clearly obvious, 20/20 reasoning. And yet, I rarely, if ever, have seen it in my 30 years of business experience. That 3-day offsite where you planned for 2024, while called a strategy session, was really a planning session where you took the 2023 results and extrapolated them to 2024. It’s got elements of strategy, but this is NOT Strategy. It is planning.

What Playing Field Should You Be On?

Once you have fleshed out success, you can now determine which playing field you should be on. Here are some questions to guide you:

  • Who are your competitors? What resources do they have? Yes, this is a repeat question. You should have a 24/7/365 radar lock on your competitors. This can set the benchmarks. This will provide insight on underserved markets. You have another set of data points about what is working…and what is not working. It is shocking how many companies decide they will have nearly the same product and experience as the market leader. If we have learned anything from disruptive technologies, is that you never go toe-to-toe with a market leader…you outflank them. You pick away the bits of the market that are underserved and where they have the poorest margins. Of course, part of your reasoning must satisfy whether out-flanking your competitors is adequate enough to satisfy your stakeholders!!!
  • How are you different? How do you stand out? If you are not the market leader, then you must stand out. To stand out, you have to offer differentiation. It could be in your product, customer or buying experience, pricing (warning—being the low-cost provider is a tremendously difficult strategy to execute in the long term…but it can be a strategy), packaging, messaging, or nostalgic history. Even your sales process can differentiate you. We’ve worked with companies that have given up the traditional insurtech enterprise process of demoing their solution to a more consultative approach where demos are made available in bite-sized quantities to the prospect in the early stages of the sales process. This is different because most companies don’t want to show their product via video for fear of losing control or that it will land in the hands of their competitors. Valid concerns, but we have not seen the fears materialize, and this can actually create a much more engaging sales process and help your prospects make a more informed and relaxed decision.
  • Can you defend that playing field? Is the playing field you are on easily copied? One reason we recommend that our clients open-the-kimono around product demos and other facets of their solutions is that most firms are just flat out uncomfortable with transparency. Could your competitors copy it? Yes…but it will be emotionally difficult for them to rally around that. We will spend quite a bit of time on this topic and discuss defensible differentiation.

Finally…what are the activities that you need to do on that playing field to achieve success on the chosen playing field (market)? This sounds like planning. Well…it is. So think about all of those planning offsites you’ve had. You jumped into planning mode on day 1 based on executing some arbitrary and incremental progress against your prior year’s results. The planning can’t occur until you take an inventory of your resources, what you are trying to accomplish, and how you will compete. You need a strategy that will guide you on your actions. And each action must support the overall strategy. And the strategy must be designed so that it can leverage the available actions you have at your disposal. It is reflexive. Strategy dictates action and action executes the strategy and each is in flux based on the feedback loop of success or failure.


We tired in this article to underscore the critical importance of distinguishing between activity, planning, and genuine strategy within the insurance industry. A comprehensive and flexible approach to strategy that begins with a clear definition of success and involves continuous monitoring of competitors and market conditions. By focusing on differentiation and aligning actions with strategic goals, insurance companies can navigate the complexities of the market landscape more effectively. The emphasis on transparency and adaptability highlights the need for insurance firms to be both innovative and responsive to achieve long-term success.


About Nick Lamparelli

Nick Lamparelli is a 20+ year veteran of the insurance wars. He has a unique vantage point on the insurance industry. From selling home & auto insurance, helping companies with commercial insurance, to being an underwriter with an excess & surplus lines wholesaler to catastrophe modeling Nick has wide experience in the industry. Over past 10 years, Nick has been focused on the insurance analytics of natural catastrophes and big data. Nick serves as our Chief Evangelist.

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