How digital are you?
With an increasingly complex regulatory environment and the fastest-changing consumer, the need for insurers to reassess digital capabilities and agility has never been greater. Though insurance companies seem to understand the importance of digital transformation, few are capitalising on the opportunity in a meaningful way.
When it comes to the “why”, the message has definitely landed with CXOs, but the debate is quickly moving to the “what” and the “how”. Clearly, opportunities are being developed based on the internal and external benefits: primary areas are those that impact top line or brand value, ranging from improving customer experience to introducing new product offerings. But digitisation is not just about customer acquisition (where historically much of the focus has been); it is also about transforming internal processes and leveraging the power of data, which are ultimately the engines that drive organisational performance. In the future, the most successful insurance companies will be those that:
• Are fast-learning and technology-savvy, and adopt a customer-centric strategy
• Can foster a culture of change
• Leverage digital tools to improve speed, agility and insights
Mobile in insurance
Mobile offers multiple opportunities for insurers: it allows them to interact with and service existing and new customers through an additional channel, design new product offerings, and manage internal operations more efficiently. Many insurers have started tapping the possibilities offered by this channel. For instance, 1st Guard Corp., a truck insurance firm, leveraged the mobile channel to reach its ever-mobile trucker customers. It launched an app, called Trucker1, which enabled independent truckers to sign up for products while on the road, reducing cycle time by 10%-20%. An Indian insurance firm ICICI Lombard has used the mobile channel to increase productivity of its surveyors by 30-40%. The firm’s surveyors have been given iPads which allow them to pull up case details, take pictures, tag these to various categories, and complete the process remotely, enabling the firm to manage claims more efficiently.
Even though most insurance companies have taken up multiple mobile initiatives primarily through apps, our analysis of user ratings on app stores suggests that none are really seen by the market as “killer” apps. Most of these apps tend to have limited features, are not well integrated into the insurer’s operations and product lines and do not offer a seamless multichannel experience to the customer.
Insurance firms are now ready to move to the next level of maturity in the mobile channel. However, they need to ensure that their efforts match customers’ expectations. In a recent cross-industry survey conducted in the US, only 39% of insurance customers said that their providers cater to them in the digital channels (SMS, email and mobile apps) the way they prefer - putting the insurance industry behind the banking, mobile and cable industries. We believe that insurance firms now need to consider seven key areas which will differentiate the winners from the losers in the mobile space:
• Define clear objectives for the mobile channel upfront, which will help in planning activity and assessing results
• Define a sustainable app platform strategy which is adaptable to the fast-evolving mobile technologies
• Integrate mobile within the product and multi-channel environment in order to maximise benefits
• Integrate mobile functionalities with operational and back-end processes to drive operational efficiencies
• Invest in app promotion, through various mediums, to increase usage and visibility
• Adapt the organisational structure and governance model of the mobility unit (central, local or local and central) to manage scalability and channel needs effectively
So, what next?
Rapid expansion of digitisation and ever-changing consumer behaviour are forcing companies to reassess and adjust business models. The truth is that future success - or, indeed, survival - of insurance companies will ultimately depend on how well they are able to serve their customers. Gone are the days where insurers enjoyed a “push model” where a policy-centric and acquisition-focused culture was sufficient to drive sales and performance. Insurance companies will have to undergo major transformations in the next few years. It is vital to make the right choices, and to develop the enterprise capability to adapt and change on demand - a true customer-focused operating model that requires a series of new operating models.
It goes without saying that to operate a customer-focused model successfully, robust customer insights and analytics capabilities are critical. The most successful insurers will be those that are able to capture, analyse and act on insights with speed and precision. Insurers will need to compete and differentiate through a rich customer experience across the entire value chain, from research through to renewal. Tools such as social media and other analytics and predictive tools can help companies serve customers and foster innovation. The new customer-focused operating model will also require insurers to streamline legacy systems to provide a single view of customers.
It is widely accepted that digitisation plays a key part in transforming businesses today, but few insurers have been able to move beyond implementing simple tools such as social media or mobile applications. With a rapidly-changing regulatory, economic and consumer environment, the most successful insurance companies will not only leverage digital tools to enhance processes, but also actively adopt a customer-centric strategy and foster a culture of learning and change.
Capgemini is at the forefront of defining the digital mandate for our insurance clients and helping to transform business models for the exciting journey ahead.
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