Consider the possibility two or more insurers form an alliance to create a single, standard interactive platform that allows agents to receive quotes from them.

How would your company react? What IT strategies would you need to implement to remain a competitive player in this new environment?

Those questions and more are explored during a war game, in which companies develop strategies in response to a particular event and then challenge one another on how well those strategies would work in the real world.

"During a war game, you're building a series of different playbooks of what might happen 'if,'" explains Leonard Fuld, president of Fuld & Company, an international business intelligence consulting firm based in Cambridge, Mass. "Then, when the 'if' does occur, you're prepared with a strategy or counter-strategy you can execute."

In addition to conducting war games, Fuld focuses on competitive intelligence and research analysis as well as training, education, and building intelligence programs. Throughout its history, the company has worked with most of the major insurance companies, he says.

The common platform scenario was discussed during two war gaming workshops at the Society of Insurance Research (SIR) annual conference in Charleston, S.C., last October. Michael Sandman, senior vice president of Fuld & Company, conducted the workshops, which attracted close to 70 attendees.

Although war games typically are held over two days, the four-hour workshops at the conference provided an overview of the methodology and an abbreviated scenario around a common platform for quoting and binding. "If a group actually developed this platform, that could marginalize or lock out other companies," Sandman asserts. "This is an area where there could be future competition within the insurance industry around technology."

In a war game, participants are divided into teams, with each team representing a company in a particular industry or market sector. Fuld & Company provides teams with background material about all the companies depicted in the game so they can understand and begin to think like their competitors.

"A war game is a great way for senior managers to address a critical moment in their company's history, whether that be a merger, a regulatory change, or the entry of an overseas competitor," Fuld says. "All of these events can create a huge shift in a company's way of doing business, and a war game helps key decision-makers develop options so they don't get caught short."

With so much at stake in a war-game scenario, Fuld says it is critical for senior managers to participate in the actual event. "It's very important for the decision-makers to be in the room," he contends. "Otherwise, you have frustrated middle managers who think of great ideas but can't execute them."

As participants develop strategies to respond to a particular event depicted in a war game, they are asked to follow the Four Corners model, which focuses on their company's goals, current strategy, resources, and beliefs and assumptions about the marketplace. The model helps players hone in on possible strategies to pursue as well as uncover reactions to and implications of those strategies within the marketplace.

Technology plays an increasing role in companies' strategies to become more competitive as well as to reduce costs, improve efficiencies, and enhance business processes, Sandman says.

"There are so many places where technology can have an effect on a company's operations," he points out. "It's a topic that comes up at least peripherally in almost every war game we do. Technology touches everything."

Andre Burke, manager of business and competitive intelligence at Zurich Insurance, agrees. Burke participated in the war gaming workshop at the SIR conference.

"This workshop did a good job of bringing up the technology issues but also everything else that goes around those," Burke recalls. "Marketing, operations, public relations–all those areas have to be wrapped around a technology rollout in order for it to flourish."

According to Fuld, war games constantly show insurance companies that play them technology creates transparency in the industry. "Companies that embrace technology have the ability to move a little faster and gain market share a lot easier and at a lower expense than they might have in the past," he notes. "It's clear technology is a lever for these players." TD

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