Digital Insurance

The Digital Future of Insurance

The digital revolution is far from over; if anything, the tidal wave of change is just beginning. Across all industries, digital technology, devices, and the data they generate are creating disruptions that fundamentally redefine the roles of both consumers and providers of value. For any insurer looking to make it in the technological age, survival will hinge upon preparation for not just the digital storm, but any unexpected shocks in the aftermath. Societies and systems are in a constant state of flux, and the status-quo can shift in the blink of an eye. Given these colossal changes, what can we expect digital transformation for carriers to look like?

Digital is not one part of the world; Digital is the world

Consumers have put digital at the center of their daily lives. From Uber to telehealth, e-commerce to smart speakers, today’s customers expect exceptional experiences that blend seamlessly and conveniently with the day-to-day.

Those best equipped to become the orchestrators of digital value delivery—”tech giants”—will reign supreme, but even this definition is changing. In the digital world, “tech giants” aren’t just the reigning tech companies, but the digital leaders standing at the top of their respective industries. Insurance, of course, is no exception, and digital transformation in insurance is not just paramount, but inevitable.

Value is determined by integration into the digital daily

The value consumers seek can no longer be met by a single product. Rather, it can only be delivered by integrating multiple products and services from various industries.

Perhaps the most pertinent example is retail, where almost a quarter of US malls are predicted to close by 2022. In response, shopping malls are embracing customer-centric, data-driven integrated experiences (e.g.leisure, wellness, community bonding, convenience) to deliver value. By utilizing technology such as magic mirrors, mobile apps, smart changing rooms, and sensors, shopping malls are reinventing themselves to meet the dynamic demands of today’s digital natives.

Another example is agriculture, an industry that is leveraging not just hard tech (e.g. tractors) from one company, but also products and services from other partners to create a complete farming solution that includes weather monitoring, grain monitoring, and predictive maintenance.

Across the board, digital is challenging every industry, forcing incumbent companies to reinvent themselves to stay relevant in a hypercompetitive, hyperconnected world. Now, as the separation between products and services is blurring and deregulation allows for greater integration, digital nomads are flocking to the companies that best deliver the ultra-convenient and simple solutions they expect.

In insurance, we are seeing a world where networks of interdependent suppliers create bundles of products-services to meet the needs of customers. Think USAA + TrueCar. Think Liberty Mutual + Nest, or MunichRe + Next. Collaboration, in other words, is setting the stage for digital transformation in insurance. And as digital further entrenches itself at the center of consumers’ daily lives, one thing is clear: traditional end-to-end business models are not built to survive the turbulence of the digital world.

So what is? Becoming an ecosystem orchestrator or citizen is perhaps the most strategic move firms can make as part of their digital transformation. Equally important is building a digital platform that can scale for the future, and investing in key capabilities such as APIs and AI-enabled automation.


Not sure what digital transformation for insurers looks like? Check out ValueMomentum’s Digital and Cloud Services to see how we can help you stay competitive in the technological age.