Each insurer’s journey will be unique, based on where it starts from and its overall strategy. But understanding the impact of each digital lever will help craft the right itinerary.
No company will have the resources or the capabilities to do everything at once. We believe that understanding the impact of each lever will help insurers in the next important step, which is to chart a course towards digital transformation. As the 2013 Accenture Digital Insurance Survey: Europe, Latin America and Africa showed, while insurers are investing in digital technologies, most lack a holistic strategy that covers their entire value chain.
It’s very important that insurers see their digital strategies within the context of the broader company strategy. Each company will have its own strategy, and its digital journey will reflect that, as well as its initial starting point. However, we do have four guiding principles to offer:
- Get the basics right. Digital technologies have already changed the insurance market, and so to be a credible competitor, every insurance company has to have certain capabilities. These include multi-channel excellence, client orientation and personalization, operational simplicity, and agility and superior execution.
- Define a clear strategy and business model. While working at the basics, the insurer needs to understand where it wants to go, particularly taking into account the disruptions in the market. Our experience shows that there are four basic digital archetypes or models that should form the basis of the company’s intent. Each of these models is associated with certain of the value levers. (I will cover these digital archetypes in subsequent blogs.)
- Develop and nurture a customer-first digital culture. Digital transformation isn’t just about technology or business models. The people have to change, adopt a “digital mindset.” Driving that change is no easy task, and must be carefully planned.
- Test and learn continuously to fine tune the road map to high performance. In a very fluid and fast-moving business environment, nobody should expect to create a road map and then stolidly set about following it over several years. The process must be much smarter than that, with quick wins and prototypes allowing for quick execution, continuous learning and the ability to fail fast—read my colleague Thomi Meyer’s blog Are you designing for resilience? for some insight into this concept.
Digital transformation is vital if insurers are going to compete successfully in tomorrow’s markets for tomorrow’s customers. Next time, I will begin a focus on each of the digital models or archetypes between which companies wishing to digitalize will have to choose.
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.