There are four typical digital models or archetypes that should inform strategy.
In my last blog, I offered four guiding principles that insurers should follow in order to become high-performance digital insurers. The second of those principles was to Define a clear strategy and business model. There are of course many dimensions to this principle, but I find useful to use four simple digital models or archetypes to help insurers define the strategy they want to follow. I thought it would be useful to go into each archetype in greater depth over the next few blogs.
Which model is chosen depends on the company’s strategic orientation along two axes: how focused is it on growth and to what type of customer relationship does it aspire to? The following diagram illustrates this.
Let’s start in the top right-hand quadrant and look at the Channel-Enabler model. Its focus is on using digital technologies to enhance the performance of existing physical sales channels (agents, mobile salesforces, brokers and the like), and also to provide customers with an improved, multi-channel experience, something they increasingly demand.
This model suits those insurers aiming for growth via increased sales and better retention of existing clients. It very often implies moving from a B2B2C relationship model to a triangular one, in which the client, the intermediary and the company all communicate directly with each other. Moving to this model opens up a whole array of value-generation opportunities for all parties.
Enhancing existing channels via digital technologies may be seen as a low-risk strategy because it works with what already exists, but it does mean that new channels and business opportunities tend to be sidelined.
One example of a company adopting this model is AXA France, which has provided its mobile salesforce with new tablets by means of which they can leverage cloud-based sales tools. Using their new devices, sales agents have a much more fluid dialog with their clients, and can immediately underwrite new business using digital signatures, greatly increasing sales and process effectiveness.
Similarly, an increasing number of companies are investing to provide tied agents with analytics, social media and qualified digital leads, while also extending their customer portals, client self-service options and launching simpler “e-products”. Other insurers are focusing on converting digital leads and extending their capabilities to use outbound call center effectively.
Next week, we’ll look at the Tailor-Made model.
For more information, download our recent paper, Double the profits: How insurers can create business value from digital transformation. For more on the case for digital transformation, read the Accenture 2013 Consumer-Driven Innovation Survey. You might also find Four capabilities insurers need on the journey to digital mastery and high performance useful background reading.