Insurers are bracing for serious change as customer journeys continue to transform. IDC FutureScape predicts that by 2024, 50 percent of all policies of non-life and life insurers will be sold through a fully automated personalized insurance engine and client-guided customer journeys, creating stronger brand loyalty.
A progressively more complex regulatory environment, evolving consumer expectations, and increased competition are driving accelerated digital transformation for the insurance industry.
But the drive for digital transformation might be something slightly different for each insurer. For example, Caser Seguros needed to attract and retain customers amid a price war and an economic downturn while iCare wanted to improve customer satisfaction by delivering a more efficient claims settlement experience. Caser Seguros and iCare approached digital transformation with different goals but at the very core (much like with any other digital transformation initiative), lies a need to easily ingest, process and make decisions on ever-larger volumes of data at ever-higher speeds.
Executives face increasing pressure to deliver on these digital transformation initiatives. Moreover, limited resources and tight schedules make it difficult for them to deliver measurable results.
How do these challenges manifest?
Making sure that digital transformation makes a meaningful impact on the business is challenging. Expensive initiatives usually fail to deliver on key performance indicators (KPIs) fast enough because transitioning existing processes turn into a laborious exercise with developers who have to spend months and sometimes years re-coding existing core processes to keep the business running. In the midst of all this, new processes are developed to take advantage of the new technologies.
Also, new technologies from different vendors are often not mature enough to work well together leading to poor integration, manual work, inability to accurately measure benefits and lost opportunities to retain or better serve clients.
According to Paul Ridge, Head of Insurance for SAS UK & Ireland, digital offers have leapfrogged five years of organic progress in insurance. That means that for those insurers that are at the beginning of their digital transformation journeys, there is immense pressure to deliver results under very tight deadlines with little margin for error.
To use the digital transformation initiative's new tools effectively, high-level programming and data science skills are needed. It’s getting increasingly difficult to fill these technical positions.
Power in partners
To solve those challenges, insurers must leverage partners with the right platforms and pedigree to deliver on their promises and take a somewhat counterintuitive crawl-walk-run approach.
For example, to deliver measurable results, insurers should seek out solutions that simultaneously have a high degree of backward compatibility, a large set of mature connectors, and a robust library of application program interfaces (APIs) that reduce the need for custom integration work with other installed technologies. In this way, most of the time is spent on building new cutting-edge processes that take full advantage of the digital transformation capabilities, while backward compatibility helps keep the business going by porting existing processes to new technologies.
Moreover, these technologies should give the insurer the ability to seamlessly integrate and supercharge existing installations. Enhancing interoperability for different technologies in this way allows executives to get the most out of their investments. The improved visibility also lets them accurately measure the impact of their strategic decisions.
Power in flexibility
To deliver results at a faster pace with little margin for error, insurers should seek out partners that have experience with complex implementations across insurance and other highly regulated industries. These types of partners have often dealt with issues that might be common across the industry, but not necessarily within a specific organization.
Vendors that offer easy-to-set-up solutions and rely on the latest technological developments, such as cloud-native deployments, are also crucial to the equation. This way, the insurer can guard against technological obsolescence.
Vendors that offer these types of solutions allow teams to get more done with less while opening the door for resources with different skill sets to work together more efficiently with little or no need for re-training.
These solutions should offer visual or low/no-code tools for most of the tasks that the tool addresses. This reduces the need for difficult-to-obtain technical skills. Additionally, for folks that are technically savvy, these solutions should offer flexibility in how a user chooses to complete a task.
Power in planning ahead
In addition to successfully navigating digital transformation challenges, anticipating other factors is equally important. Caser, for example, measured the impact of regulatory changes, such as the recent ban on gender-specific pricing.
Also, a big help to know is when customers are considering jumping ship for another vendor.
Advanced analytics can help the insurance businesses lay a foundation to successfully tackle all these challenges while managing risk, ensuring business continuity and realizing a faster time to value.