Technology is by far the biggest enabler of the 21st century. It has allowed organizations to explore new frontiers and innovating in order to stay competitive. Most organizations even today rely on legacy systems and processes. These systems are deeply embedded into the organization that any major attempt to transform digitally will result in a substantial loss of business. However, with technology evolving quite rapidly, and market dynamics changing quickly, most organizations are trying to keep up with the digital age.
The era of insurance technology is driven by a changing relationship with the customer. In today’s world, the customer expects a lot from businesses. Being spoiled for choice, they know that changing insurance carriers is quite easy with transparency being a key factor here. The main agents of change here are people, market boundaries, and technology. These three key macro market forces are creating new innovations, customer expectations, and fierce new competition.
2021 will see the greatest acceleration and implementation of digital technologies on all fronts.
The Ten-Step Handbook to A Successful Insurance 2.0 Transformation
To successfully transform your organization to stay competitive and ahead, following a systematic approach will structure the transformation so that you don’t lose sight of the big picture regardless of changes in the company.
Stage 1: Inventory and Assessment
To begin the process, you will need to create a stockpile of information by scouring the internet and tracking industry thought leaders and companies to observe the direction the industry is heading in. By building a knowledge bank, you will be able to lay a solid foundation, making it easier to convince the leadership and stakeholders.
Stage 2: Analyze Market Scenarios
The industry is always in motion. By developing a few scenarios of which direction, the industry is heading, based on your preliminary research, you will allow your company the flexibility and adaptability to pivot during sudden industry changes.
Stage 3: Closely Analyze Your Competitors
Assess and gauge your organization’s level of preparedness in all possible scenarios mentioned above. Highlight key strong areas of competitive and strategic value. Based on the level of preparedness, create impact scenarios on valuation, profit, employee retention, and growth.
Stage 4: Consult Insurance Technology Solutions Experts
The general consensus is that the best way to go about a digital transformation is by teaming up with insurtech professionals who know the ins and outs of the industry, and therefore saving you lots of time and money and focusing your efforts in the right direction.
Stage 5: Get Your Leadership to Stand Behind the Transformation
With all the information you have gathered, your next task will be to convince a senior executive to lead talks among other key decision-makers and to secure resources and funding for the transformation.
Stage 6: Convince Business Units in a Phased Manner
Now that you have the leadership convinced, the next hard part is to convince all the business units in your organizations by showcasing the various impact studies and benefits to their BU’s. Take their feedback and suggestions in order to streamline the process and allow for the smooth adoption of technology.
Stage 7: Roll-Out No Frills Initiatives
To ease in the digital transformation, start by introducing small and measurable initiatives. These initiatives should be undertaken in an agile manner and executed in a cost-effective and low-risk manner. This is an essential step in building the trust for the bigger transition.
Stage 8: Scout for Team Heroes
Every team in your organization will have an individual who is capable of convincing the rest of the team. By delegating these torchbearers, their vital role in ensuring their teams get on board really dictates the belief in the systems that will inevitably help them succeed. By standing behind the transformation, your team can gain momentum and build support for the change.
Stage 9: Building Next-Generation Digital Architecture
Completely revamping your organization’s business structure, processes and models is an enormous task. By creating a cloud-centric architecture, and focusing on building digital ecosystems, your organization will be able to save time and money while remaining competitive in the market.
Stage 10: Bring Insurance 2.0 to Life
In view of the speed of digital adoption inside and outside the industry, insurers must find time and cost-efficient ways to quickly cope with the competitive challenges and the opportunities of the new markets and to align their digital transformation to the 2.0 requirements. Speed to value is a critical component of a digital transformation. By scaling up your initiatives and having some form of ROI to convince the leadership as well as a thorough learning and testing process, you will have truly begun your Digital 2.0 Transformation.
The opportunities and challenges that this year holds will define how value is created and distributed. Successful digital transformations are outlined with an unshakeable vision, strategy, and prioritization of various initiatives. To deliver growth across the entire value chain, it is essential to build momentum and ensure that all stakeholders are on board. It is essential that the leadership understands that a digital transformation is a continuous process, and not a done-and-dusted deal. As digital analyst Brian Solis puts it, disruptive technologies that pivot the market leads to digital Darwinism, where the risk-takers and technology-adopters will thrive and those stuck in a traditional orbit will slowly lose the grip that they once had, on the market. Many insurance companies are undergoing a digital transformation, but by not following a plan of action, often see themselves stuck in a ditch. By following the guide, creating a framework, and getting the leadership and business units on the same page, the chances of a successful digital transformation are more likely.