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February 25 2015 | Mark Breading

Many insurers are pursing digital strategies and embarking on a digital journey. But what does this really mean? Ask ten insurers and you would probably get ten different answers. Everything around us is going digital – entertainment, commerce, transportation, communications – you name it. The amount of digital information in the world is already mind-boggling and is increasing at fantastic rates. All of this has implications for insurers, which is why many are incorporating digital concepts and opportunities into their business strategies. And there is ample evidence that the strategies are being translated into investments and initiatives that affect people, process, and technology – and, of course, data. 

One way to begin or accelerate the journey to becoming a digital insurer is to create and execute plans in five key areas: strategy, acquisition, management, communications, and analysis. The options and opportunities for each of these areas could fill a book, but a high level view provides some context for the overall digital insurer planning process.  

  • Strategy: Developing a digital strategy requires that a wide range of business and technology strategies be considered and harmonized. Many elements should be considered, including the implications of digital for the customer experience, omni-channel operations, core systems, analytics, content, and the infrastructure. In addition, key business strategies for the brand, marketing communications, web, mobile, social media, Intranet, and other areas must be integrated into the overall digital strategy. Above all, this should not be a technology exercise. While digital is about leveraging technology, the opportunity for transformation and differentiation is about new business approaches. 
  • Acquisition: The manner in which digital content is captured, converted, and created is rarely unified across the enterprise. Great opportunities exist to take a holistic view to acquiring digital content. New sources of digital content are also widely available and continuing to expand, from both internal operations and external sources.
  • Management: Today, the digital content that is acquired consists of a wide variety of formats for a wide variety of uses. In addition to the traditional data from transactions or scanned documents, a whole universe of third party data is available on risks, customers, markets, and other areas relevant to insurers. Video, voice, text messages, e-mails, and social media data are everywhere and have much potential for insurers. The common denominator for all this data is that it must be managed in a disciplined manner for efficiency, access, and compliance purposes.
  • The amount of digital information in the world is already mind-boggling and is increasing at fantastic rates. All of this has implications for insurers.

    Communications: Acquiring and managing digital content is of no use unless it is leveraged in communications and mined for insight. Every interaction is an opportunity, not only to capture new content, but also to capitalize on digital content already created. Digital insurers must have modern platforms for managing communications across channels and delivering the right content for the right situation.
  • Analysis: One of the great opportunities of digitalizing more content is the potential to unleash analytics on the data for new insights. Many insurers are implementing enterprise-wide BI/analytics strategies and organizational structures to optimize the analysis of digital content for both strategic and operational purposes. Gaining these new insights, putting them into action, and using them in communications is the payoff for going digital.

It is important to understand that these five areas do not represent sequential steps, although one would hope that the strategy is sufficiently well formed before launching into new initiatives in the other areas. Beyond that, there are many dependencies and relationships between the activities in these areas.

The path to a true digital insurer is not for the fainthearted. It will require an enterprise-wide strategy, sponsorship from the C-suite, and a sustained effort over a period of years. But the alternative is ... well, there really is no alternative. Customers, agents, employees, and others interacting with an insurer all live in the increasingly digital world and expect that insurers will provide the same types of capabilities and opportunities that they experience everywhere else. Rapidly changing expectations, demographics, and the competitive environment mean that companies that don’t go digital will be left in the dust. And those that aggressively work to become a digital insurer will be the leaders in the digital era. 

For more information on SMA's Digital Insurer Framework, read SMA's new research report, The Digital Insurer: A Framework for Enterprise Capabilities for the Digital Age. Contact Mark Breading for further information at mbreading@strategymeetsaction.com.

 


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To learn more, please contact:
Mark Breading
Partner
Strategy Meets Action
614.562.8310