In less than four years the insurance industry has undergone significant digital transformation, with almost a 55% increase in the number of carriers identifying themselves as digital, according to SMA research. With an increasing number of insurers leveraging digital tools, new technologies, and data analytics to bolster various aspects of their businesses, we want to highlight the factors that need to be considered to ensure a seamless digital transformation process.
The key to successful digitalization involves an organization-wide mindset change, identifying an insurers’ value proposition and the tools and technologies that complement it. It also involves answering questions such as:
- Who will be most impacted by the digital transformation?
- Are all the parties to be impacted by the digital transformation aware of the upcoming changes?
- Can the changes be handled all at once without being too disruptive to workflow?
Since digitalization touches all aspects of a business, from sales and services to operations, it is essential to ensure employees are open to embracing change and all affected parties are well-equipped to understand the parameters of the changes and its impact. Addressing mindset change and organizational alignment prepares companies to build a robust digital foundation to grow continuously.
But not all companies are equipped to support digital businesses, which is why it is best to take an incremental approach when it comes to integrating new digital capabilities. Using an iterative testing and learning approach will save time and create opportunities to learn and adapt based on feedback. This is a key reason why cloud adoption is rising because only cloud can truly maximize the ROI for these initiatives – easing the burden on up-front infrastructure demands and costs to unlock the agility of an insurance company.
This incremental approach also extends to the customer side. Often, it’s the customers who demand simple, time-efficient products and services. But these services are usually never ‘complete’ at launch. When introducing new portals or tools, it requires feedback from the users to reach its potential. Insurers must be comfortable with first offering a minimum viable product and leveraging insights from usage to adapt it to shifting needs.
While on the one hand, successful digitalization involves understanding how to deliver upgrades and changes without being disruptive to the workflow, on the other it requires coming up with innovative solutions using the technologies and tools at hand to make the processes such as quoting, policy binding, and billing easier for customers. An example of a company successfully doing this is Liberty Mutual – the insurance carrier has employed personalized interactive videos to enhance communications and drive engagement with injured workers.
It comes down to finding the best ways to integrate new technologies and tools to streamline both internal and client-facing workflows. Today, insurers have everything from customer insights to data which can be translated to real-time decision-making analytics at their fingertips. What sets apart a good insurer from a better one is truly adopting an agile mentality toward product growth and change for theirs and their customers’ advantage.
To learn more details about my principles of a digital mindset, I recently wrote about it in Insurance Thought Leadership.