Below are the best information about Insurance digital transformation public topics compiled and compiled by our team
To win in today’s crowded and hyper-competitive insurance market requires speed, efficiency, and ease of use. That means going digital — and though this is not a simple process, by employing a smart strategy, every step will move you closer to reaping the benefits of digital transformation.
The trick is not to get overwhelmed — you don’t have to make the transition all in one fell swoop. Consider digital transformation a journey, rather than just a destination, and collect the benefits along the way. Here is our guide to insurance digital transformation and how you can deliver these new capabilities to your customers.
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What is Insurance Digital Transformation?
Historically, the insurance industry has been notoriously sluggish in its adoption of new technologies. The ideas of optimizing workflows, moving to an online interface, or even processing claims same-day once seemed impossible. That is, until the worldwide digital transformation of all industries, and now the digital transformation of insurance.
For insurers, digital transformation is “the process of using digital technologies to create new — or modify existing — processes, cultures, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.”
Today, it is commonplace for property and casualty insurers to handle a majority of their business online or via digital applications. Today’s consumers simply demand speed — they want instant gratification, and in the case of insurance, that means immediate policy quotes, bill payments, and communication.
Where digital transformation of the insurance industry will go in the future is largely unknown. But experts believe the biggest impacts will be felt across claims processing and underwriting, powered by new developments in artificial intelligence (AI) and the Internet of Things (IoT). These tools, and more, are part of the process of today’s insurance digital transformation.
Digital Transformation of the Insurance Value Chain
As we have mentioned before, customer expectations are largely driving innovation and the digital transformation of insurance. And when we refer to the customer-facing or customer-impacting functions of insurance, we are referring to what is known as the insurance value chain. Today, digitizing and upgrading the insurance value chain is more important than ever.
But what is the insurance value chain? The insurance value chain includes all the components of insurance that companies generate value from. Think of it as all the touchpoints across which carriers and customers interact. Those interactions also encompass customer self-service functions, which are of the utmost importance to today’s consumer. When we speak about the insurance value chain, we are referring to:
- Product management
- Sales and distribution
- New business underwriting
- Customer Service
The Process of Insurance Digital Transformation
The tools and applications that comprise digital insurance — AI, IoT, machine learning, predictive analytics, big data, and cloud-based services — are what have sparked insurance digital transformation. And while these tools are vital, the process of digital transformation involves much more than simply installing new software.
For carriers that have a complex mix of legacy IT systems, the idea of tackling all of these digital updates and implementing new systems can seem daunting, expensive, and risky. But have no fear — a cloud-based infrastructure allows you to take an agile, multi-phased approach to your digital transformation at your own pace. For example, start by picking one line of business to work on, and look for solutions that enable you to effectively gather and unify all of your data together in one place.
No matter where you start, one critically important feature to consider throughout your digital transformation is your technology’s ability to continuously update and remain current. With solutions that are evergreen, you can experience unlimited innovation powered by modern, deployable technology that’s always current and always up to the task. This is the central benefit of digital technology in insurance — it empowers you to find new strategic solutions for your customers before they even know they need them.
While digital tranformation can take time, or even if you’re looking to make a digital transformation all at once, there are a few tried-and-true steps you should take to make this process as smooth as possible.
Stage 1: Automate Current Processes The first stage on the journey to insurance digital transformation is the automation of current processes. Consumers today expect high levels of speed and personalized attention, which would be nearly impossible without automated functions. There are real gains to be made here, and many operations in the insurance industry can be made more efficient and effective with digital technologies and techniques such as:
- Automating underwriting rules and driving referrals through more efficient workflow processes
- Automatically opening claims coverage and setting reserves based on pre-defined rule sets
- Implementing live chat functions and automatically answering customer questions and concerns in real time
- Automating billing and communications
Stage 2: Optimize for Strategic Focus The second stage of an insurer’s digital maturity is that of optimizing for strategic focus. A step beyond automation of tasks, this stage focuses on identifying critical elements that differentiate carriers in the marketplace and leveraging digital technologies and strategies to optimize processes that support those market goals. For example:
- Product excellence – some insurers are optimizing around product innovation, aiming to configure and create new products to serve the needs of specific markets such as commercial specialty
- Speed to market – others are optimizing around the ability to change rates, rules, and product offerings faster than their competitors
- Customer/agent experience and service – still others are optimizing around being easiest to do business with, typically through a preferred channel
Like the automation stage, the strategic focus stage has inherent value by itself, and is not necessarily just a stepping stone to another stage in a carrier’s journey. Indeed, market differentiation alone can make or break a business.
Stage 3: True Digital Transformation
The third, and most developed, stage of digital maturity is the complete, end-to-end transformation of a business to an open, connected “platform” model.
Sometimes referred to as “ecosystems,” platform companies, like Amazon and eBay, are organized to meet evolving market needs by orchestrating connections between buyers, sellers, products, data, and service providers — all in an open, informed, iterative, and dynamic cycle of supply and demand.
While this level of development clearly requires extensive digital underpinnings in order to operate, the model requires more than technology alone. It requires a new way of thinking and operating, and represents the complete transformation of an insurer’s organization and go-to-market strategy. True digital transformation:
- Puts customer needs and expectations at the center of every decision and process
- Shifts an organization from discrete internal and external business units — each with its own sets of data and processes — to ongoing, real-time communication and data sharing
- Facilitates dynamic connections among shifting market participants
- Radically changes relationships between partners, competitors, suppliers, etc.
Delivering Insurance Digital Transformation to Your Customers
The gap between insurers that are digitally enabled and those that are not is accelerating. It’s no longer a question of whether to replace legacy core systems; it’s about how. Many insurers — especially small-to-medium carriers and those with smaller pools of tech talent to draw from — are effectively leapfrogging the competition by transitioning to a software as a service (SaaS) model for their core systems.
Digital transformation is now baked into customers’ expectations. In “The 2016 State of Digital Transformation,” Altimeter surveyed 528 digital transformation leaders and strategists across industries and asked them to rank the priorities driving their digital transformation projects. The results will look surprisingly familiar to insurers:
- Evolving customer behaviors and preferences (55 percent)
- Growth opportunities in new markets (53 percent)
- Increased competitive pressure (49 percent)
- New standards in regulatory and compliance (42 percent)
The implication is that digital transformation is being driven by concerns around revenue, retention, and customer experience more than by technology. The digital transformation of insurance — at its best — lowers barriers to entry. It’s easy for end users to adopt and adapt via configuration, not code. And through the cloud, IT is now available as an operational expense rather than capital expense.
Due to pre-integrations and the ever-ready and continuously updated state of SaaS platforms, insurers are able to immediately use and benefit from more functionality for digital communications, data-driven decision making, and predictive analytics.
SaaS also relieves your IT personnel of repetitive and non-value-added responsibilities, like maintenance and upgrades, so they can concentrate on other business challenges, such as optimizing customer experiences and preparing to use new data sources, including those obtained from telematics and third-party providers.
When carriers proceed with insurance digital transformation, underpinned by a completely scalable, SaaS-based platform, the benefits they can expect to reap are endless. For most insurers, the first signs of positive change from digital transformation include:
- Standardized processes
- Cost reduction
- Sales productivity
- Speed to market
- Omni-channel integration