What it takes to prepare for digital in insurance
The nature of the insurance business is changing rapidly. No one knows what it will look like in 2025 or beyond. New business models are emerging as are new ways of applying technology to deliver those models. Customers have new demands and new abilities to judge you. Ecosystems are burgeoning along with the need for rapid integration and real time everything. So it is no surprise that digitization of the industry is a hot topic. Ninety percent of insurers participating in a recent survey on priorities stated that they are engaged in digital transformation in some form.
We see many stories in the media about insurers engaging in cool initiatives. Often these initiatives are small projects focused on the use of emerging technologies such as voice UI, IoT or computer vision .But the industry is pivoting from seeing ‘digital’ as a project to seeing ‘digital’ as a core value and a fundamental strategic lever to drive financial results.
In fact, technology has become as core to an insurers strategy as underwriting, finance or marketing. However, making the transition from “IT as a cost center” to “IT as a core strategic pillar” requires transformation of the IT organization. Before you can reliably introduce the ‘cool stuff’ at scale, there are a lot of less cool, but important areas to address.
Many carriers have made some real strides forwards in shifting the model to meet their digital ambitions, creating a more differentiated proposition with sharper tech-focused innovative capabilities, and improve their delivery capabilities.Others are just beginning and looking for a roadmap to help them prioritize.
If you want to do more than just keep your head above water (which results in falling behind digital natives and rapidly digitizing incumbents) there is a foundation that needs to be put in place. There are three facets to this new foundation:
- Building or acquiring new technological capabilities
- Building or acquiring new human capabilities
- Revamping the organization and its processes to mix, match, and deploy these capabilities at scale.
If you’re interested in more detail, stay tuned for my upcoming report – Preparing for Digital.
This blog entry has been reprinted with permission from Celent.