The digital revolution

April 10, 2015 SSP Limited

Earlier this year, SSP hosted an event for insurers at the Rosebank Crowne Plaza, Johannesburg, South Africa to discuss the revolution of digitalisation globally. Led by SSP’s Head of African Operations, Rhys Collins, the event provided great insight and discussion. Keynote speakers included Martin Vipond, Partner in Management Consultant (Insurance) at KPMG and Craig Beattie, Senior Insurance Analyst at Celent. Together they urged every business to become truly digitalised for their own, and indeed the industry’s future survival and success.

Embedding digital in strategy

Embedding digital as a fundamental within an insurance strategy and not seeing it as separate, was the main topic of the day from Martin, “a sound integrated strategy has a digital component that runs through a number of different areas and if you’re packaging digital separately, you’re doing it wrong.” He went on to share insight KPMG have gleaned from research on assessing what gets the successful players to where they are.

Unsurprisingly customer-orientation was at the heart of these businesses. Hinged on four key attributes; customer knowledge, relevant propositions at the right time, relevant distribution for customer segments and finally optimal servicing for these, with a clear digital theme through each. From enriched data capability through to distribution flexibility and choice for the customer in what they buy, how and where, there’s no doubt that without digital capability, any organisation will not remain competitive and will struggle to remain competitive.

Martin went on to discuss the role of digital in products and across markets. Encouraging the audience to think about using technology wisely to support things like predictive analytics to get a clear understanding of valuable customers; then building simple and easy-to-understand products on multiple devices, be it mobile, tablet or desktop.

An app that uses a smartphone’s accelerometer and GPS to provide a driver with detailed driving information, brought to life by gamification, uses data like harsh braking and speeding and was presented as Discovery Insurance’s way to engage and educate its customers on understanding risk, and also to engage with their brand. 

Creating value by giving customers what they want

The theme moved on to talk about digital in distribution and operations, focusing on value, and concentrating on the 80% of relationships that provide the most. Getting the right level of engagement with customers is not to be undermined. A consistent customer experience across channels is becoming increasingly important making digital integration across channels even more paramount. KPMG research shows that the majority of people want to research offers online and purchase offline, particularly with complex products like life insurance. Presenting products and services clearly, simply and consistently to suit customer requirements increases chances of success. Emerging and growing channels like social media offer alternative lower cost ways to do this and also provide a way to empower brokers.

Martin closed by urging insurers not to see investment as a blockage or a formidable cost. Taking it project by project and building a portfolio of digital capability is a way to break the cost into bite-size chunks and make an incremental difference. Even simple things like giving brokers digital tools such as tablets or social media support can make a big difference.

Staying ahead of the game

Pace of change in technology was the second focus of the day, presented by Craig Beattie of Celent. Taking on board the point made earlier by Martin about digitalisation being fundamental to the insurance strategy, Craig went on to ask the audience to consider what this meant in terms of reviewing and developing a strategy over time. With such rapid advancement of technology, its essential insurers refresh their view on a regular basis to make sure they’re capturing new and emerging technologies and capabilities and how consumers are responding and behaving. What might have been relevant 12 months ago may not be now.

Craig’s defined digital as “Digital is the continuing adoption of technology by mankind”. It’s about changing the way we do things, continuously making them quicker, cheaper and easier. He went on to explain that the digital continuum moves through key stages from not digital, to adopting digital, to basic digital and then on to advanced digital, and eventually extreme digital. All the time progressing processes and capability ultimately to low or no-touch and zero paper approaches, across the entire business operation.

A global playing field

The global comparisons of where the industry is at through these stages was interesting. Craig suggested South Africa was for the most part at the advanced digital stage, with some key players like Discovery Insurance, disrupting the market. However the UK and the USA have cajoled for place as front runners illustrated by how they adopted desktop and mobile technologies. In 2000, UK insurers were quick to adopt desktop-based internet. By the time mobile came along six years later the UK had already set the precedent in desktop digital, so the US market simply went straight to mobile.

Making it relevant

The event couldn’t pass by without the topic of telematics being discussed and used as a great example of how data is driving yet further evolution of digital capability, to transform the way the industry operates. Craig highlighted how telematics progressed from simple vehicle tracking at the start, to eventually highly sophisticated recording and analysis of more complex enriched data from different sources. Giving better insight and more useful information for insurers to make decisions and change behaviour. With the advent of smart homes and smart buildings, the use of real-time enriched data is exploding into the next wave of digitalised capability underpinning consumer behaviour. Insurers need to have foresight and be ready to respond. However his final lament was a cautionary tale, that more digital is not always better. Making products too complex could have an adverse effect, so keep it simple and relevant.

By the end of the day there was no escaping the fact that embracing digital strategy offers a vast opportunity to gain sustainable advantage. Applying the right philosophies and technologies will enable insurers to become connected, analytic and agile.

About the Author

SSP Limited

As the leading global supplier of technology systems and software for the insurance industry, our role is to help insurers and brokers operate more efficient businesses. So whether you’re a global insurer or an MGA, a high street broker or a start-up with a smart new idea, we can be trusted to support you on your journey, whatever the destination.

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