The Digital Age is profoundly disrupting virtually every sector of our economy, our culture and our lives. The insurance industry is no exception. Today’s customers have come to expect that their insurers will deliver all the conveniences and efficiencies that these new technologies provide –and the message has been heard loud and clear: the industry is mobilizing.
In a recent survey, fully 90 percent of insurers stated that they are actively engaged in some stage of digital transformation. Some carriers have already entirely organized themselves around these tech-focused innovations while others are only just beginning the process. Some insurers, borne of the digital age, were purpose-built to live on the web from their inception, while other long-established players are rapidly digitizing themselves to compete in this disrupted space. Regardless of where in this process your organization currently finds itself, there are three central elements that a successful digital transformation requires:
- Building or acquiring new technological capabilities.
- Building or acquiring new human capabilities.
- Revamping the organization’s processes, governance and culture.
1 - Building or Acquiring New Tech Capabilities
The very foundation upon which a company’s digital transformation sits is its digital architecture. To compete in today’s marketplace, a sound digital architecture—and one with an API-first integration strategy—enables an insurer to build out the five essential categories of digital transformation:
Modernize Your Apps: Today, insurers are looking at how to deliver real-time customer service, how to use data to make better decisions, how to automate workflow, and how to do all of that quickly and at scale.
Look to the Cloud: The public cloud offers tremendous flexibility and scalability in infrastructure which dramatically shortens the time to introduce new applications.
Deal with Data: Analytics have become a top priority for carriers. It’s no surprise. In the digital era, data is king, and AI extends the reach of what is possible by enabling the automation of judgment-oriented tasks that previously required human intervention.
Focus on CyberSecurity: Cybersecurity cannot be “purchased” in a box or resolved by a one-time action. It can only be assured by a change in culture, organization, processes and the proper application of the right technology.
Learn and Plan for Emerging Tech: Staying on top of emerging technology is now a core requirement, not an option.
2. Building or Acquiring New Human Capabilities
To effect a lasting digital transformation with true sustainability takes more than just new tech. It takes people, and it takes culture.
Acquiring and Maintaining Staff: So who’s going to run all this stuff? The talent needed to deliver the leading digital capabilities is increasingly hard to find, recruit, and retain so insurers will need to invest more in employee training to build new skill sets and transform capabilities among their existing talent.
Beyond the right people, it takes the right culture. Corporate culture is driven by the stories we tell, the events we celebrate, the words we use, and the successes we reward. Without a fundamental change to the culture, a lasting digital transformation will never take root in our corporate DNA.
3. Revamping Your Processes and Governance
Lastly, to create true digital transformation, your corporate processes and governance need to reflect the changes you’ve made to your technology, people and culture. Incorporating new roles, cross-functional collaboration and revamped decision-making authority for digital strategies and policies is central to any digital transformation.
Technology, People & Governance. It Takes all 3.
No matter how well-intentioned, Digital Transformation isn’t something that can be bought from a box or realized during a two-day offsite. It’s an ongoing journey. As such, it requires the full measure of a company – and a foundational shift in its technology, its people, and its governance. And even if you don’t currently have the appetite or the resources for wholesale transformation, there are steps that thoughtful insurers can take today to prepare for digital transformation tomorrow.
Read the full Celent report, Preparing for Digital, to get more in depth details on the capabilities needed for digital transformation.