The Digital Age has fundamentally redefined the very way we live and do business. Across industries, customers have come to expect that providers deliver all the conveniences and efficiencies of today’s cutting-edge technologies, and the insurance industry is no exception. The need is clear: insurers looking to stay relevant in the digital era must adopt digital transformation strategies now.
Many insurers have heard this demand and have been stepping up to respond. In fact, 90% of insurers participating in a recent survey stated that they are already pursuing some form of digital transformation. In looking at carriers with digital transformation initiatives, the carriers who have made significant progress in reaching their digital ambitions are the ones who have built a strong foundation for digital transformation. This foundation rests on three pillars:
- 1. Building or acquiring new technological capabilities.
- 2. Building or acquiring new human capabilities.
- 3. Revamping the organization’s processes, governance and culture.
Building these three pillars into the foundation of your digital transformation strategy can help your organization prepare to compete and win in the digital era.
Setting the Foundation for Digital Transformation Success
1. Building or Acquiring New Tech Capabilities
The base upon which a company’s digital transformation sits is its digital architecture. In today’s marketplace, insurers must build out or acquire the following five digital capabilities:
- 1. Modernized Apps – Today, insurers are focusing on ways to deliver real-time customer service, enable better decision making via data, and automate workflows. Modernized apps make it quick and scalable to achieve all of that, and more.
- 2. Cloud – Offering tremendous flexibility and scalability in infrastructure, adopting cloud will allow insurers to dramatically accelerate the amount of time it takes to develop and introduce new applications.
- 3. Robust Data & Analytics – In the digital era, data is king. That’s why it’s no surprise that analytics have become a top priority for carriers. As AI continues to push the limits of what is possible, insurers too must advance their efforts to maximize the value of their data to drive greater business value.
Cybersecurity – As more and more systems and data are being migrated to the cloud, insurers must ensure that there are adequate safeguards and policies in place to protect sensitive data and other digital assets. It’s important to note that cybersecurity cannot be “purchased” in a box or resolved by a one-time action –thus, true digital transformation success may require profound changes in the organization’s culture and processes, as well as measures to ensure the proper application of the right technology.
- 4. Ability to Learn and Plan for Emerging Tech – Today’s customers reward the companies that deliver and delight with cutting-edge capabilities and seamless experiences. For that reason, staying on top of emerging technology is now a core requirement for staying relevant and competitive in the digital era.
2. Building or Acquiring New Human Capabilities
A lasting and sustainable digital transformation takes more than just new tech; it takes people, and it takes culture.
The right kind of talent is necessary to deliver new digital capabilities, but it has become increasingly hard to find, recruit, and retain employees with such competencies. Thus, insurers preparing for a digital transformation will need to invest more in employee training to build new skill sets and transform capabilities among their existing talent.
Beyond the right people, it also takes the right culture. Corporate culture is driven by the stories that are told, the events that are celebrated, the words that are used, and the successes that are rewarded. If lasting digital transformation is the goal, leaders must ensure that fundamental change is made up, down, and across the organization. Doing so will help shift the entire organization towards embracing and advancing digital transformation.
3. Revamping Processes and Governance
Lastly, to achieve true digital transformation, corporate processes and governance must be adjusted to reflect the changes that have been made to the organization’s technology, people and culture. New roles, cross-functional collaboration, and revamped decision-making authority for digital strategies and policies are central to any digital transformation.
Technology, People & Governance. It Takes All 3.
Digital transformation isn’t something that can be bought from a box or realized during a two-day offsite; it’s an ongoing journey. As such, it requires the full effort of the organization– as well as a foundational shift in the organization’s technology, people, and governance. By thoughtfully adopting the digital transformation strategies outlined above, insurers can arm themselves with the tools and capabilities they need to compete and succeed in the digital era.
Interested in getting started? Get a more in-depth look at the capabilities insurers need for a successful and sustainable digital transformation in the full Celent report: Preparing for Digital Transformation.