Digital transformation has dominated the insurance landscape for the last decade and, as time has gone on, that conversation has only become more intense. Covid-19 undeniably accelerated some transformation projects and changed others, but little has happened to derail them.
The pandemic has shone a light on what it means to be truly transformational when it comes to digital strategy. And it’s becoming clear that digital transformation means very different things to different people.
For many carriers, the focus has been on a cleaner user experience. Perhaps this means fewer fields to complete during the quoting process, texting photos of damage during the first notification of loss (FNOL) or getting claims status updates via text.
These are all useful improvements in the ‘front end’, but do they mark out true end-to-end digital transformation? The answer must be no.
For the customer experience to be fully seamless, every element in the ‘back end’ must also be part of that digital transformation. It’s all very well to offer texted photos as a quick way to begin a claim. However, if that picture still lands in a human-owned inbox, the subsequent claims process is still going to take time and involve more back and forth than perhaps an AI-driven unstructured data processing technology. Equally, a slick ‘front end’ might mask a system that lacks information at critical points or involves multiple redundant stages. In every case, the management of that claim will remain high-touch, annoying for both employee and customer, and payment of claim still a distant prospect.
What real transformation looks like
How we would define true digital transformation is inextricably linked to data transformation. Insurers need to find better ways of acquiring, managing and using their client data to provide that seamless customer experience in a way that is also meaningful to the business.
And what does meaningful look like? Digital transformation is meaningful to insurers when it makes customers’ lives easier but also works behind the scenes to introduce new, more effective streams of data. It is more meaningful when it can feed that data into AI-powered systems that are able to make decisions on low-impact cases rapidly and decisively. Digital transformation is more meaningful when it touches on every part of the organisation, making it easier for humans to do their jobs, for customers to understand and get the most out of their coverage and for the business to operate at its most efficient level possible.
Not every insurer can reach this ideal state immediately. But there are elements of digital transformation that they can cherry-pick to make that bridge between customer expectations and carrier capabilities. In fact, this is often why what so many carriers call digital transformation projects are simply digital customer enablement projects. They are a step in the right direction, but there is no way they could be called full digital transformation – yet.
How do we get there?
Despite digital transformation having been part of the conversation for so long, there is still no universal playbook for digital transformation, nor do we expect there will ever be. Because every project is unique, every insurer has its own set of challenges and opportunities. That said, there are some clear principles that should guide each and every organisation on its own particular transformation path.
First of all, digital transformation is a whole company culture change programme. It will change how people interact with systems and with each other. This is a challenge. People have their own agendas and can be resistant to change.
Why are people resistant to change? Quite simply, because many have seen it tried before and it’s not gone well. Projects have sometimes been handed back too soon from vendors or consultants, or sometimes worse, too late; perhaps projects were not nurtured post-install. Add to this the feeling of constantly having to reinvent the wheel and refresh, and people lose confidence in transformation.
How do we stop this from happening?
For digital transformation success, insurers can’t rely on an ad hoc approach. Even if the transformation is only currently taking place in one small area of the organisation, its purpose needs to be understood and integrated into the wider community. We see four critical pillars for successful digital transformation at any level
Ownership – However involved the project, it must have someone driving it who understands the ethos and is able to articulate it to other stakeholders.
Coaching – Don’t expect people to just understand. The people in your business need to be coached about why transformation is happening and how to make it happen. Then, they need to be checked in on to make sure they are happy with the process. It’s not helicopter management; it’s making sure the business doesn’t end up rudderless.
Communication – Always keep channels open. Pre-Covid, we were separated by oceans and offices; now we’re separated by masks, lockdowns and sanitiser. Remote working brings benefits, but collaborative communication isn’t one of them. We have to work hard to overcome these barriers and make sure they don’t remain post-pandemic.
Purpose – The motivation to get behind a change project comes from purpose. The purpose isn’t necessarily some lofty ideal; it is simply making sure that everyone is working towards the same, shared goal. This makes a huge contribution to overall motivation. The previous three steps all feed into these goals, and it needs everyone on board to make it work. It’s a collective effort
Digital transformation on any scale is not a finite effort. Everything goes out of date – data, technology, even enthusiasm. If teams are not nurtured, data stays uncleansed, and technology fails to adapt. Eventually, obsolescence creeps in, and you find yourself back where you started. The enemy of transformation is the idea that it’s ever ‘one and done’.