Becoming ‘digital’ is the latest mantra. Unfortunately, this makes it easy to dismiss ‘the digital insurer’ as the next fad.
However, pressures on the industry are going to force tough decisions about product, service, and distribution. A number of industry analysts are indicating that successful adoption of digital strategies will be a hallmark of successful insurance organizations for the future.
On this basis, our bet is that the emergence of the digital insurance organization is when, not if. We’d like you thoughts.
The insurance industry is under pressures from a variety of sources. These include heightened competition from traditional and non-traditional sources, claims inflation, and consumer/regulatory pressures. To respond, insurers and brokers are increasingly looking to technology to support efficiencies, effectiveness, and customer loyalty.
Anecdotally, we can’t remember an industry conference or seminar where a featured speaker hasn’t referenced digital companies – Uber, Google, Amazon, etc. – as attractive business models when compared with our current environment.
In short, we need to change, and we are recognizing others who have done so successfully.
What does digital mean?
A recent report from SMA -Strategy Meets Action, The Digital Insurer, provides a framework to help insurers “establish a vision and create a roadmap for success in the digital world”. Monique Hesseling, who co-authored the report with fellow SMA Partner, Mark Breading, said “Many insurers we work with are engaging in digital insurer strategies, and are seeking guidance on how to integrate the many different business and technology strategies that are required to win in the digital era”
The SMA framework describes 8 layers:
- Core Business Capabilities
- Digital Content
- Data Management/Analytics
- Unified Digital Functions (Marketing, Social, Mobile, Collaboration, CRM, etc.)
- Customer Experience
The key to success, according to the report, is to work towards a holistic solution: “Ultimately, insurers must break down legacy and historical organizational and technology silos to succeed in today’s digital world.”
This is a big job, but…
For organizations which have just completed multi-year, multi-million dollar projects, the SMA construct might appear to command resource commitment that is an order of magnitude greater than any they might have available for some time to come. Two things to consider:
- What is the alternative? If we honestly believe that the customer is looking for a different experience, it will require a concerted, cohesive approach. Not more of the same with different background colours.
- This does not mean a wholesale replacement of everything. In its recommendations, the authors suggest using the framework to compare against existing functionality and develop a roadmap which identifies opportunities.
We’d like your opinions on this. Are you seeing pressure from customers and other partners that fall under the digital umbrella? When you look at your functionality, does the SMA roadmap make sense? If you are traveling the digital road now, what’s the traffic like? Let us know in the comment section below.
Also, The Insurance-Canada.ca Technology Conference (#ICTC2015) is focusing on The Digital Customer Experience. Over two full days, March 9-10, 2015, you will have the opportunity to interact with experienced practitioners, suppliers, analysts, and consultants. Monique and Mark from SMA will be joining us.
Looking forward to your thoughts and to seeing you in person at #ICTC2015!