The Current State of Digital Insurance – The Perfect Storm
by Vikas Sachdeva, on Oct 1, 2019 11:41:55 AM
Digital transformation is ultimately a business transformation. It takes advantage of digital technologies to upend business processes, culture, and customer experiences to meet changing business and market requirements.
Like most, the insurance industry has been blindsided by the speed at which customers’ expectations have evolved. Insurers have relied on legacy technologies for decades, but we’ve reached a breaking point. To keep up with the new reality, insurers ought to tap into digital technologies to radically change how they do business and offer a more personalized, seamless customer experience.
Any digital transformation effort that promises to usher in radical and piercing change should consist of an overhaul of end-to-end business processes, and a cultural shift to an innovative and customer-focused organization. Accelare has the know-how and tools to help organizations plan for and execute such a multi-faceted business transformation using cross-functional, process-based models that illuminate run, improve and transformative initiatives.
Breaking down barriers
Clearly, the hurdles for a fruitful digital transformation are abundant, but they’re not impossible to clear. The journey should start with building a consensus around an overarching digital mission and vision of creating simple, transparent and unique experiences that are rooted in the principles of proactive risk management.
Once this customer-centric mindset is instilled throughout the organization, change agents should work toward securing seamless engagements across the customer journey, enabled by the power of data and analytics. Insurers looking for direction in their digital transformation journey should keep these insights top of mind:
- Equip agent with digital tools —Agents, who are the closest link to the end customer, value service speed and quality the most. If they’re not getting said qualities from their current insurer’s systems, they’ll seek out a different one with a smoother experience.
- Data is Indispensable — Data is insurers’ most valuable asset. By pulling actionable insights from data, insurers can better understand the needs of agents and customers. Having that insight allows the business to invest in the areas that matter most to its stakeholders and provide more personalized experiences based on readily available data.
- Favor a Nimble Digital Architecture — Insurers must adopt a dual-speed digital architecture with a transactional core running alongside a fast-moving, nimble customer-centric frontend. The core backend system should be built for stability and high-quality data management, while the frontend should be flexible enough to accommodate frequent changes to keep up with fast-evolving customer preferences.
- Simplify product legacies and complexities — Rigid legacy systems hinder digitization of processes and implementation of new IT systems. Customers want simple and fast digital interactions. Often overlooked intricate coverage details that include many specific exceptions can create barriers.
- Build partnerships — From licensing expertise to managed cloud service to consulting services, bringing in outside skills and perspectives can do wonders for the transition to highly digital processes. It may be best for Insurers to partner with InsureTechs to reduce time to market.
- Embrace the usage-based business model —Customers only want to pay for how they use the insured items, and the duration for which they use same items. The ability to compile data and insights will help organizations offer up personalized insurance packages that are supported by faster transaction processes. This usage-based approach allows insurers to pass on cost-savings to their customers.
Articulating a digital transformation strategy is the cornerstone of Accelare’s Strategy to Execution (S2E) process. If you are interested in hearing more about how S2E can help your organization make the most out of your digital transformation efforts please feel free to contact us.
Vikas Sachdeva and Mikyas Aklu