The insurance industry is at an inflection point: clients’ sales and service experience expectations are rapidly rising, while new technologies—if leveraged properly—enable new levels of service quality, operational efficiency, and consumer/agent/employee experience. In addition, the industry is being challenged by digitally native InsurTechs that have entered both B2C and B2B markets and compete with compelling products. The trust equation is increasingly driven by digital rather than by face-to-face interactions. The world is fundamentally changing around the insurance industry in a rapid and radical manner, creating a tremendous opportunity for innovative companies to emerge and improve the way insurance is produced, bought, and experienced. Underlying forces – transparency, customer-centricity, connectivity, and artificial intelligence – are leading the drive towards strategies and solutions that are driven by digital, data and cloud in global insurance markets.
Consumer expectations of institutional knowledge (of products, customer data, and more) and consistently high service levels that have been set by market leaders in other industries (e.g., Amazon, Apple, SoFi, etc.) have long spilled over into the insurance marketplace. Disrupters such as Lemonade, Hippo, Ethos, and Ladder Life have emerged and are setting the innovation agenda across the insurance value chain. A “digital, cloud- and data-driven insurer” mindset has the potential to deliver step change operating performance improvements through better risk selection, pricing, effective claims management, and experience. The “Inventive Insurer” mindset can serve as a “North Star” for a transformation journey from a traditional insurer to a digital insurer (the “Digerati”). It has a strong emphasis on improving business and operational performance by using technology as an enabler and catalyst for change.
Based on “Leading Digital” (a joint study conducted by Capgemini Invent and MIT Sloan), the “Digirati” have the right balance of digital mindset, skillset, toolset, and dataset to deliver superior operational performance and results. The following graphic shows how emerging technology is starting to empower the digital experience across the ecosystem:
Figure 5. Emerging technology
The digital journey is not just about IT or operations. It is a collective voyage, with aspects of both technology and operations. As businesses look to transform into a “blue ocean” or “greenfield” model, IT partners should consider an architecture such as the Open Digital Insurance Platform, which is an API layer that allows insurers to quickly add new capabilities from insurtechs, big tech, and other third-party or internal systems. While no solution is truly plug and play, with open APIs integration is faster, cheaper, and easier. This ease of integration is critical for new distribution channels, data sources, modernized systems, and much more. This architecture enables insurers with two critical advantages: agility and an interconnected ecosystem. By creating an open, digital insurance platform, insurers can move much faster, leveraging interconnected systems to bring new products to market and change existing products. They can respond to customer needs faster than ever before by putting information at the CSR’s fingertips, or better still, the customer’s fingertips. Also, through an interconnected ecosystem, insurers can enable faster digital adoption while also giving new life to legacy systems without necessarily requiring a full transformation or replacement.
Life insurers are beginning to adopt new, adaptive technologies, especially with regards to distribution. Through extensive use of data, carriers can increase the volume of automation via straight-through processing, enabling the business to underwrite and price better. Through data enrichment, carriers can understand vital data and gather additional information to help customers enhance their digital experience, capturing or even prefilling data as it relates to lifestyle, general health, wellness, critical illnesses, auto, or other personal risks, helping the insurer assist the customer to create a more personalized experience and better-matched product despite less human interaction.
As insurers look at their overall strategy for a digital transformation, they will need to look at key components of the buying process, such as content, experience, and platforms. Customers and agents have a broad spectrum of expectations; the content and products will provide insight into the portfolio of the insurer and its values with regards to being customer centric. The platforms enable an insurer to provide a more seamless experience across the customer lifecycle, including areas such as:
- Policy, billing, and claims Information
- Insight into data across the customers’ value chain
- Product information with necessary updates.
The brand experience is vital to providing a customer journey that is differentiated and is uplifting for the brand despite potentially being 100% digital. It is essential to manage the journeys for each distribution channel strategically in order to define the journey and processes that are required for each unique channel. Distinguishing how and when customers should be engaging – and how they are engaging – is essential to ensuring that the process is driving customers from education through quoting and illustration through sales and issuance while minimizing not-taken policies, not-in-good-order (NIGO) policies, etc.
Finally, deciding whether to re-platform onto new digital solutions, companies will need to select a packaged solution (home grown solutions rarely make sense with many packages now available in the market) and determine the level of configuration required to get the solution to provide essential functions aligned to business objectives (i.e., a minimum viable product, or MVP). Selecting the right solution will be vital to achieving the digital roadmap and enhancing your company’s digital strategy for the next several decades.