Eyes on the Industry’s Future Through Scenario Planning

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Author

Lisa Stevens
Director of Executive Development
LIMRA and LOMA

June 2025

The insurance and financial services industry is contending with a wave of disruptors in 2025 — from high interest rates and market volatility to regulatory changes, demographic shifts, emerging technologies, evolving talent strategies and rising customer expectations. To navigate these disruptions effectively, companies must rethink how they lead and plan for the future.

Since the beginning of the year, MarketFacts has been exploring the critical roles that enterprise leadership and strategic thinking can play in organizational success. Both are key capabilities that enable industry executives to transform organizations by anticipating future trends and preparing for unknowns through optimized scenario planning.

Scenario Planning Roots

Scenario planning traces its roots to the 1940s and has an interesting history, as depicted by an article in PWC’s strategy+business. This includes early thinking created by futurist Herman Kahn, then a young defense analyst at the Rand Corporation, all the way to Pierre Wack, a French executive at Shell Oil. A favorite tribute to Wack’s view of scenario planning is as follows:

“I had the feeling of hunting in a pack of wolves, being the eyes of the pack, and sending signals back to the rest. Now if you see something serious, and the pack doesn’t notice it, you’d better find out — are you in front?”

Pierre Wack, Shell Oil

Scenario planning is about leading from the front — planning for future trends, monitoring uncertainties, and thoughtfully responding as the future manifests itself. Scenario planning is not about taking quick action but rather leveraging current insights and trends to make informed future decisions. It is about being prepared by predicting what is possible and the best ways to respond.

Scenario planning can be likened to organizing a dream vacation. While excursions are identified along the journey, many travelers plan for future unknowns — such as inclement weather and travel delays (what happens if . . . ) — as well as possible itinerary changes should the unexpected occur. Much of this planning is based on current airline, weather, local and global travel trends, and headwinds. On the journey, tools such as a compass, telephone and GPS can help travelers to navigate a successful trip when roadblocks arise. To have a competitive edge, organizations also need to plan for managing uncertainty.

As companies begin 2026-plus strategic planning, it’s a perfect time to begin or revisit existing scenario planning work. Strategic and scenario planning are closely linked, with both focused on an organization’s future, yet it is important to understand the difference.

Strategic planning focuses on a company’s future vision and how to get there (e.g., By 2030, . . . ).
Scenario planning examines current industry/market trends and potential future organizational impacts (e.g., what happens if . . . ).

Moreover, scenario planning can help organizations shape their overall strategy and vision. Companies that have leveraged scenario planning recognize the necessary investment of time and effort. The process can be simple or involved, depending on the depth an organization would like to explore. For companies implementing scenario planning for the first time, the steps can seem challenging. Below are five general steps to get started.

Steps		Getting Started - Key Considerations
1	Define Key Objectives	How can scenario planning help us strategically plan for the future?
2	Identify "Unknowns"	What external industry forces of change are impacting the industry? What do internal trends tell us?
		What information about industry trends currently exists? What data is needed and where is the source?
		What unknowns should be planned for and why? How far out should we plan?
3	Engage Others	Which stakeholders should be engaged? What dependencies exist?
3	Engage Others	Which tools will drive collaboration and an enterprise-first mindset?
4	Identify/Build Scenarios	Based on key objectives, which 3-5 scenarios should we plan for?
5	Continually Evaluate	What adjustments are needed to ensure that informed decisions can be made about the future?

Tips and Tools

The class of 2024 graduates of LIMRA and LOMA’s Strategic Leadership Executive program has identified the following tips for successful scenario planning:

Do your homework:
Invest time in understanding external industry forces of change, impacts, headwinds and market trends, as well as internal trends.
Start small:
Build three to five scenarios; test and learn before going bigger.
Plan scenarios for six to 12 months into the future.
Bring others along:
Leverage tools to engage and drive purposeful conversations about the future.
Communicate frequently across the organization to align and inspire others with the future.
Continually monitor plans:
Review plans every six months to make adjustments, aligned with the company’s strategic planning process.
Remember that scenario planning is an iterative process and not a one-time event.

As organizations demonstrate preparedness to respond to potential future scenarios, several traditional tools can help identify external and internal unknowns, including:

Assessing Industry and Market Trends, and Competitive Landscape:
Strengths, weaknesses, opportunities and threats (SWOT) and Analysis
Porters Five Forces
Examining Internal Data:
Enterprise resource planning tool: assess day-to-day internal business activities.
Human resource information system: identify employee trends.
Financial planning and analysis reporting: assess budget results and forecasting.
Customer resource management reporting: identify client data.

The most popular tool for developing scenarios is the 2x2 matrix, which compares two key unknowns against each other with future possibilities. Whether continued advances in generative artificial intelligence (GenAI) will replace scenario planning is a big question. While some believe it will, others argue that AI will significantly enhance scenario planning.

While scenario planning requires an investment of time and resources, it enables organizations to demonstrate greater resilience and adaptability by focusing on what’s possible — and therefore making more informed business decisions. When executed thoughtfully, scenario planning also drives an enterprise-first mindset and inspires collaboration and innovation across functional areas. Through enterprise collaboration, there is also an element of powerful storytelling across functional areas that helps to bring clarity and alignment to the broader organization. It is through collaborative storytelling that leaders can share the narratives of various functional areas to help shape a shared organizational future.

Watch Points

The energy generated from scenario planning can be contagious and inspire enterprise leaders to rush to shape multiple scenarios in which to position organizations for the future. Moving too quickly can cause two critical pitfalls if not monitored:

Lack of sufficient time to develop purposeful scenario plans and the inability to be resilient when plans need to change
The inability to regularly review multiple scenarios to ensure relevancy over time

Scenario planning should not be leveraged to make quick organizational decisions about the future. Quick decisions can cause plans to run off track, causing increased frustration and gaps in the execution of organizational strategy. Often, the lack of thorough upfront assessment to inform scenario building becomes a barrier to success.

LIMRA and LOMA have been committed to advancing the industry by providing the education and resources necessary to support next-generation executives in navigating the ever-changing landscape.