Recently there have been lots of discussions in the insurance industry about becoming digital. The terms digital insurer or digital strategies are being bandied about by many in the industry. SMA is engaging with insurers in this activity as well, leveraging our Digital Insurer Framework. But a skeptic might ask, “Haven’t we been going digital for decades? Why are we introducing these “new” digital strategies now?” And, like kids on a long car trip, those on the journey to digital want to ask the obvious question: “Are we there yet?”
Assessing the Industry’s Digital Progress
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Some might argue that insurers have been going digital for a half century. The industry was, after all, a pioneer of the information age, embracing IT solutions early in the game. Some of those original custom-built systems from the 60s and 70s – automating policy processing, billing, and claims – are still running out there! Over time, insurers have extended automation to most parts of the business, improving efficiencies across the value chain. Many companies have gone beyond digital transactions and have been increasingly digitalizing many types of content to support both operational and strategic needs. In order to determine if we are “there yet” there are two things to consider. First, assess the amount of paper documents, policies, bills, and other internal and external communiques floating around an insurance company. For most companies, a quick look around at filing cabinets, desktops, and print/mailrooms confirms that there is still a great deal of information that is not yet in digital form. Second, determine if the information that has been captured or created digitally is fully leveraged via business intelligence and analytics tools. Great progress has been made in this area, but most insurers would admit that the industry is just scratching the surface when it comes to gaining new insights from all the digital data that is available.
Harnessing Digital for Business Advantage
Since there seems to be plenty of opportunity to capture, create, and analyze more digital information, the question becomes how to prioritize opportunities and coordinate all the activities in the digital space. The list of potential projects is endless – mobile enablement for policyholders, agents, and employees … rules engines to enhance underwriting … integrating images, voice, and video to improve claims … e-delivery to improve the customer experience … and many others. And the opportunities to unleash analytics and big data, especially in conjunction with location-based data and visualization technologies, provide even more powerful potential to create new business advantages.
Digital Strategies and Plans
Many insurers have a variety of digital oriented projects underway, driven by various sponsors and business drivers. However, few have an overarching framework or strategy for becoming a digital insurer. A strategy framework for the digital insurer should consider the capabilities needed for a series of inter-related areas:
- Improving the customer/agent experience and evolving to an omni-channel environment.
- Developing a unified set of business strategies to support digital, including strategies related to the brand marketing communications, mobile, web, customer relationship management, and more.
- Creating enterprise-wide strategies for data management, analytics, and security.
- Unifying strategies for the capture, creation, management, and delivery of digital content.
- Identifying the core business capabilities and infrastructure required to support a digital business.
Becoming a digital insurer is a long journey, one that requires foresight and planning. For insurers to compete and win in the digital world, they must increasingly become digital. As the journey progresses, insurers will have more flexibility and more options to create innovative products, sell more effectively through more channels, service customers in new and better ways, and develop new business models to raise the competitive bar. Are we there yet? No – not by a long shot. But, the industry is making great progress. And the opportunities in the digital realm are inspiring and exciting and should become a central element of insurer strategies.
