Åke Freij

Throughout history, regulations have been of central concern to business managers, and they remain at the centre of attention in many industries today. Regulatory changes are seen as difficult to handle, and firms often seek to avoid or minimize their impact. Examples of such practices exist today in the automobile, health care and financial services industries. However, a more positive approach views regulations and regulatory change as opportunities and not only as obligations, since the changes associated with them influence the structure of industries and relationships between actors. This study, based on an intensive study of six Swedish life insurance companies, investigates what firms do to manage the impact of new requirements from regulatory change, which actions they take to implement new requirements and what separates firms that succeed in the market after a regulatory change from others. The historical case study covers the 17 years following Sweden’s enactment in 1990 of a law authorizing fund-based life insurance policies—a regulatory change that revolutionized the industry. The actions of six major firms during this time period are comprehensively presented and analysed, based on interviews with the companies’ top-level executives and a thorough review of published research and company and industry documents. Drawing from insights in prior theoretical research, the case studies focus in particular on the firms’ integration of existing and new products, processes and technology and their use of internal or external providers. The analysis reveals that the two firms that were most successful in managing the regulatory change were highly proactive in using external providers as well as integrating new and existing products, processes and technology after the regulatory change. These firms displayed strong capability to manage interfaces both within the organization and with external entities. Based on the findings, the study makes recommendations for business managers on how best to manage regulatory change, as well as for regulators.