If Digital Is Urgent, How Do We Play It?

1 September 9, 2016 at 11:43 am by

InsurTech (Insurance Technology) is a hot topic in the insurance commimg_0553unity these days. But how significant is the digital trend and how urgently do we have to respond? The recent Insurance-Canada.ca Executive Forum (ICEF2016)  provided insight.

What do we do and, when do we do it?

Writing in PropertyCasualty360, PwC analysts, Jamie Yoder and Javier Baixas note that the 3 biggest drivers of change to insurance are:

  • Customer Expectations
  • Pace of innovation
  • InsurTech Startups

Together these elements create a leveled playing field where data acquisition and analytics provide the ability for new players to compete with established insurance organizations. The net result is greater leverage for the consumer.

Yoder and Baixas advise the incumbent entities to shift their focus to InsurTech:

In a time when societal changes, technological developments and empowered customers are changing the nature of the insurance business, established insurers need to determine — with all possible haste — how InsurTech fits in their strategies.

If done intelligently, the authors suggest that “the growing presence of InsurTech companies is not a threat, but rather a game-changing opportunity for insurers.”

So it’s urgent. But execution might be easier said than done. A recent research report from SMA Strategy Meets Action – Customer Engagement at the Digital Edge in Insurance – found that:

  • 79% of insurers are actively engaged in redesigning the customer experience.
  • 65%, however, have limited awareness of evolving digital ecosystems and the impact they will have on customer acquisition and engagement.

At the ICEF2016, practitioners, anaytsts, consultants, and suppliers provided guidance to help insurers and brokers balance the deep complexities of the insurance product and the consumers’ expectations with the urgent necessity to understand and employ digital technologies. Here are some examples.

It is just business …

In his keynote presentation and during a subsequent panel discussion, Global Technology Executive, Joseph Cooper, made the point that digital transformation must begin with the a customer experience strategy that is owned by the business. In addition, as much as we seek digital solutions for customers, we must be mindful of the employees’ expereince and have a program for continuous improvement of back-end core systems.

The cultural shift

Ben Isotta-Riches, CIO, Aviva Canada focused on the need for a significant cultural shift within the organization in order to complete with ‘born digital’ companies. Key cultural changes include:

  • Moving the centricity from Product/Underwriting to Customer Experience
  • Increasing responsiveness to meet customer expectations
  • Shift technology focus from a drive for efficiency to leading the evolution of the business model.

As with Joe, Ben focused on talent acquisition and support. This includes hiring and managing true talent, putting talent to work in small teams, and increasing creativity by promoting cognitive diversity.

Ben’s final exhortation was the need for leaders to model the behaviour you want to see because “You are the culture.”

Disrupt or be disrupted

Economical Insurance introduced Sonnet insurance, a direct to consumer organization earlier this year. Two senior vice-presidents – Alice Keung, CIO and Michael Shostak, CMO – operated as co-leaders, brought the program from concept to fruition, and shared their experiences.

With over 140 years of successfully serving their clients, the Economical determined that new customer segments would not be well served and came to the conclusion that it had to ‘disrupt or be disrupted.’  Keung and Shostak described the three critical components at the heart of the disruption:

  • Unmet customer needs
  • Enabling technology
  • New business models

The result is a fully digital experience based on self service. The critical element is to utilize third party data and analytics to dramatically reduce the time required by the client to produce a quote, bind a policy, and effect service requests.

But there are times you have to talk….

There were a number of other sessions which included new technologies, business models, and case studies. There were active panel and Q&A sessions. And a lively discussion at the reception following.

So the last lesson learned is a bit ironic:  In spite of all of our investment to develop and deliver digital services,  sometimes we need to talk in the old analogue way.

And just one last thing ….

If you are interested in disruption, this will be the focus of the 2017 Insurance-Canada.ca Technology Conference, 28 February 2017.

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1 Comment » for If Digital Is Urgent, How Do We Play It?
  1. Jeff Roy says:

    I respect economical decision to launch sonnet. I think they have done a great job of the website and the experience. The issue is the money and resources they spent on sonnet would have helped in developing and implementing their guidewire technology faster. I respect their decision to diversify as they are loosing business to brokers who sell to certain entities. It’s too bad they could not have used some of this money and resources to speed up their implementation of guidewire. This would allow brokers do to real time changes without going into the portal saving them thousands of dollars in labour and improving the experience. (Ux)More importantly they can then allow brokers to offer self service to their clients through mobile applications or web self service portals. This is one of the things the Sonnet experience offers. Also they can allow brokers to offer quote and bind with their products which again is something sonnet offers. Those digital brokers that have a brand and our ready to do this can offer an experience like sonnet. The market economical says their serving that do not want to deal with brokers, the brokers could also serve if economical and all the other companies improved their self service systems. It is ironic they can build a new system faster than they can adopt to their current system. Companies need to adopt their mainframes and legacy system in one to two years not five. If your a company that is taking more than one year to put guidewire in you need to look in the mirror and look at your strategy. Being a fast follower anymore is not good enough. The digital brokers who get it are demanding more and faster, better user experience with their companies and self service options. If your an insurance company are you really doing a good job and moving fast enough at the present time. Every year now is like dog years (7) So adopting a new system in three years is like taking 21 years to do in the old world. Our industry needs to kick it up so we do not allow the disruptors in. I think everyone can do more and move faster and work better together but call me a dreamer.

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