Successful digital insurers: What you need to know now
- Posted on September 7, 2018
- Estimated reading time 2 minutes
The following blog post was written by Avanade alum Steve Magennis.I wrote a blog in 2015 titled, The top five things successful digital insurers know. I highlighted several ideas that were driving industry conversations at the time. I thought it would be good to revisit them and see how well the ideas have held up and offer an update as we look forward to 2019.
The themes in my original blog post focused on an industry facing change. I talked about a shift to digital, dealing with the prospect of disruption and the emergence of new types of coverage. I think it is safe to say that since 2015, the industry has gone from recognizing change to being fully immersed in implementing it. Tremendous investment in time and resources have been, and continue to be, made by carriers to get smart about how current technologies can help achieve desired business outcomes.
The concept of what it means to be a ‘modern digital insurer’ has become much better understood. For some, it is about dramatic new ways of interacting with policyholders and distribution. For others, it is more about optimizing the experience that existing customers have come to expect from the brand. There is a consistent theme of closing the gap between how business used to be conducted and what people now expect in the age of mobility, multi-channel access and 24/7 connectivity. While details vary, we see this theme being applied to the benefit of all demographic segments, not just young digital natives. We have yet to see major disruption in the industry or broad swathes of new types of products in the market, at least from an external perspective. Behind the scenes though, we’ve seen a very real mind shift occur, with the creative machinery in full swing to transform products, experiences and in some cases even business models.
The transformation process has built up momentum but is far from being complete. The fundamental goals and concerns about digital, disruption and products haven’t changed much, but in this next stage the journey is about making change real.
Artificial Intelligence has come on like a freight train. It has enveloped cloud, big data and analytics and in its more expansive and accessible form is promising to unleash a torrent of efficiencies, improved interactions and operational consistency throughout every aspect of the business. With this new AI capability comes the tools to approach such a transformation with greater confidence and creativity.
Learnings from years of InsurTech experimentation, along with expansion of the Internet of Things, are beginning to yield sufficient positive indicators that carriers will be tasked with expanding pilots, hardening systems and moving innovations into production. Transitioning concurrent initiatives requires managing both technical and operational aspects. We only see the pace of transition increasing, giving rise to the need for an organization that is comfortable with the mindset of iterative progress over ‘big-bang’ solutions.
The insurance industry has a way to go but certainly has not been standing still. Venerable institutions of all stripes have been responding with surprisingly modern perspectives and tools. If one can use the term “exciting” and “insurance” in the same sentence, I think now is the time.