To compete effectively in the switching economy—an economy worth up to $470 billion in 2014—insurers need to be more assertive and more innovative. Simply striving to make the most of current business and operating models, and strengthening the numbers of insurance customers who are strongly loyal to their providers (currently just 22 percent) is no longer enough.
The key is to develop a digital business strategy that spans the enterprise, transforms the value chain and enables a transition to authentic customer-centricity. Digital can go a long way to improving insurers’ existing processes, products and services, and to bolstering short-term performance. But to ensure sustained success, insurers need digital to create new sources of value for the customer, the organization and its business partners.
To understand the extent of their commitment to digital transformation, insurers need to ask themselves three questions:
- In transitioning away from being a product-centric insurer, how far—and how fast—should we proceed toward customer-centricity? Industry leaders will go as far and as fast as their customers demand… and market conditions require.
- What does it take to be a Digital Transformer? It takes a holistic approach to transformation that includes looking beyond insurance and outside of the enterprise.
- What role can we play in a larger service ecosystem? Focus on maximizing value for the customer—to guide decisions about your role and your partners.
By answering these questions and forming a plan to move forward, insurers can improve their customers’ trust, stem the flow of customers switching to other providers and reap the rewards of long-term growth and profitability.
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