A perspective from Moorhouse Consulting:Insurers no longer ask whether they should digitally transform, they ask where to start and how to deliver the transformation.
Insurance companies recognise the need to be customer focused, innovative and agile, however they are trying to achieve these traits in a highly challenging environment.
Disruptive competition, regulatory reform and ever-changing customer expectations are pushing insurers out of their comfort zones. Layer on rising cost pressures and fierce competition for talent, and it’s not surprising that many are turning to digital transformation initiatives as the answer. The ability to offer personalised products and flex to customer needs shows how embracing digital can drive the insurance industry forward.
A recent EXL report shows that less than one third of insurers report digital transformation as a success, so why do so many insurers struggle to deliver effective digital transformation?
A promise of £1 billion to be invested into digital over the coming years won’t give you a market leading combined ratio, nor will a digital portal create best in class customer satisfaction. Digital transformation requires a clarity of purpose, a marrying of the solution to the problem and an environment in which it can flourish
Start with whyIf ships do not sail without a final destination, why would you launch a transformation without a clear end goal?
Insurers need to understand and articulate what they are trying to achieve from digital transformation. In a world where the opportunities to digitise appear endless, finding the right starting point requires knowledge of the final destination.
This should start by defining transformation goals in line with wider business strategy, clearly articulating the purpose of each aspect of a digital transformation. Starting with 'why’ allows organisations to identify the priority transformation activity and will ensure digital transformation helps deliver the vision of the future.
As we see more insurers launching programmes to offer the most streamlined claims journey or bring products to new customer demographics it is the firms that have built their transformation around 'why', not, budget allocation, that we have seen to be most successful. With AXA, Allianz, Aviva and many more publicly highlighting going digital as a strategic priority, the 'why' behind these statements will be crucial to gain value from the investment.
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