The Digital Insurer: A Practical Roadmap for Enterprise-Wide Digital Transformation of Insurance Companies

By Nitin Verma, SVP- Client Relationship, Kellton Tech Solutions

The insurance sector is considered a fairly mature industry whose underlying principles and operating model have stood the test of time. The workflow and responsibilities are well-defined and distributed among the three stakeholders — insurers, agents, and customers. However, this sector is also known for meticulous physical paperwork and slow processing and turnaround time.This status-quo is set to change.

The Internet may be less than 30 years old but disruptive web technologies and smartphones have thrown a wrench into the centuries-old insurance machinery. Disruption is imminent and inevitable. The smart insurers are embracing the change with an internal-transformation that complements the external change.

Customer Engagement in the Connected World

Today, the customers of the digital-age preferan engagement over the digital channels. Insurance companies are working on ways to extend their products, services, and support across digital platforms. The online customers are known to seek service flexibility, product customizations, and digital modes of payments.

The first wave of digitization in the sector—transition of physical forms to online portals and CRMs opened up many opportunities for insurers. Since then, there have been significant strides in interpreting the historical data and data-in-motion to deliver higher quality customer service. The next set of steps sought to address the manual and repetitive tasks.

Interactions and manual processing are being replaced by Bots and automation. Machine Learning (ML) algorithms are deriving actionable insights from complex and distributed data. These technological advances are helping insurers increase revenue and cut down operational cost. The return on investment can be realized in many forms.

Digital transformation—A Practical Roadmap

A transformation of this scope and importance needs serious thought, time, and investments in infrastructure and processes. The insurer’s dependence on partners, aggregators, and vendors makes it essential to include them in this transformation as well.

A digitally-enabled enterprise must encompass the below-mentioned components. These components (infrastructure upgrade) represent specific capabilities.

Digital transformation is not an overnight IT upgrade; but an incremental adoption of infrastructure and processes. Collaboration between various teams and departments is necessary to phase-out the legacy systems and replace it with digital-first infrastructure.

Glimpse of the Future

Digitally transformed insurance companies will reflect the following principles and practices:

• Digitally Enhanced Customer Experiences: Insurers need to understand customers’ digital behaviors and priorities to craft right products and services. The leaders are re-engineering moments of truth such as lodging a claim to integrate digital components.

• Omni-channel Sales and Distribution Model: Coherent online and mobile channels (with similar UX) with technology integrated seamlessly into activities such as contact center conversations.

• Optimized Operations using Digital Technologies: Digital technologies can optimize operations by identifying redundant processes, automating manual effort, reducing turnaround time and errors.

• Advanced Analytics Applied throughout the Business: Big Data holds the potential to revolutionize customer management, risk assessment, fraud detection etc. But it takes time to develop an advanced analytics capability with the right people and then focus on the highest-priority issues.

• Promote Innovation: Becoming a digital innovator requires embracing newer ideas and ways of doing things.

The Secret Sauce

The successful implementation of Digital Transformation projects depend a lot on two more factors:

• Organizational culture: An environment that fosters multiple ideas, collaboration, and teamwork across all departments

• Strategic consultant/implementation partner: It is always a good idea to partner with an external entity that specializes in digital transformation. Such a partner can reduce rework, share best practices, and steer the project away from known mistakes.

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