As I’ve argued, our digital insurer research shows that the drive to become digital is fundamentally a drive to become more customer-centric. And given that no business is worth anything without its customers, and that tomorrow’s customers are becoming digital, it’s clear that successful digital transformation will be the hallmark of future success in the insurance industry, including substantially improved profitability.
As the research also makes clear, though, insurers face significant challenges—and they do not begin their journeys from the same place. Moving from a channel or product focus to a customer-solution focus will require a total rethink of business models. For most carriers, this process will require continuous leadership and change management.
Our ongoing work on what it takes to be a digital insurer has led us to conclude that insurers should be focused on building four key capabilities:
- Cross-channel excellence.
- Customer-centricity, with the ability to personalize interactions.
- Operational simplicity.
- Superior execution combined with agility.
Any digital transformation projects, therefore, should be geared towards one of these four areas and clearly articulate the value driven by the combined digital initiatives, for the company itself as well as for its distributors and clients.
In addition, we have developed a model to help insurers understand where they currently stand and the road map they should follow. It’s far from being a prescriptive model, and can easily be adapted to specific circumstances and strategies—but it does provide a proven framework from which to begin and how best to leverage value-creation opportunities.
Digital transformation is a race all insurers must run—have you begun?
Get more detail about the four capabilities needed to become a digital insurer and the accompanying model.
In my next blog series, I will look in more detail at the role chief marketing officers can and should take in the race for digital transformation.