Case Story – Elo Mutual Pension Insurance Company

Future of Digitization, Options and Choices

The advancement of the fourth industrial revolution increases the uncertainty of the future and also has a strong impact on the field of occupational pension insurances. The importance of data analytics and automation increases in improving efficiency and customer relationship management. Customers ask for personalized and flexible services that are available at different times and in different ways. Fintechs and international companies are striving to challenge financial corporations that operate as important distribution channels for occupational pension funds. In addition, blockchain technologies create new operating models for the industry. Many traditional companies are afraid of losing direct contact with customers when tech companies enter the customer interface. Which ecosystems will win and on what platforms will future services be built? In addition, robotization, servitization, service platforms and self-employment change the nature of employment relationships. How, where and by what means will the TyEL (Employment insurance for employees) and the YEL (Insurance for Self-Employed Persons) payments be paid in the future? Among other things, these issues were analyzed in a scenario-based strategy work focusing on how the employment pension company Elo can utilize the changes enabled by digitization.

Starting point

  • Digitization and technology developments have a strong impact on the earnings-related pension sector and on the financial companies operating as key distribution channels for pension insurance companies.
  • Digitization involves a great deal of uncertainty and disruptive discontinuities, which are difficult to analyze through future predictions.
  • Views on the pace of progression and the impact of digitization development vary. However, there are no right or wrong answers, hence, finding a way to deal with alternative futures and their impacts has to be found.

What was done?

  • Scenarios focusing on digitization in the occupational sector were established: five different scenarios in which the pace, intensity, content and impacts of digitization development on Elo Mutual Pension Insurance Company vary.
  • Contingency plans for five different scenarios were prepared. In addition, a list of the necessary measures to be taken as a basis for strategy work (which should be implemented regardless of the scenario in which the sector is starting to develop) was identified.
  • Elo's own strategic options regarding the ambition, operational models, organization and priorities of digitization were described. Strategic intentions, policies and key actions were then defined based on systematic evaluation of the different strategic options.

What was achieved?

  • The scenario-based strategy work encouraged an exchange of ideas in various discussions and enabled constructive processing of the uncertainties and disruptions produced by digitization within the company.
  • The project established the basis for the strategic direction of utilizing Elo’s digitization until 2020. The key conclusions and guidelines were crystallized into five strategic themes.
  • Based on the project, it was possible to define underlying assumptions for the development of Elo's operating environment. By monitoring the validity of these assumptions, Elo is now able to strengthen its responsiveness to industry changes.

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