In the first six installments of this eight-part Insurance 2020 series, I’ve suggested a number of ways insurers can improve their current and future capabilities, enhancing their potential to become a high performer. It all starts with understanding the customer, and providing products and services that meet their needs and expectations. A powerful multi-channel distribution strategy is key to growth, but at the same time as implementing this, carriers need to reduce their structural costs.
None of this is possible without the right technology.
Agility and flexibility
These have become the Holy Grail of firms seeking profitable growth. But they will be an elusive goal as long as IT departments are hobbled by multiple aging, inefficient processing systems. Consolidation and modernization are the first steps to high performance.
With a modern platform, so much becomes possible. Consistent customer data is easier to gather and make sense of. Products can be quickly developed and configured. Digital innovations can be exploited to strengthen distribution and provide a richer, differentiating customer experience. Operations all along the value chain can be streamlined, increasing automation and precision.
Much of this can be done at a lower cost than insurers, stuck in the old paradigm, are paying. Digitalization, agile technologies, cloud, collaboration tools … all of these enable carriers to do more for less. Proven approaches such as outsourcing and service as a solution allow firms not only to raise performance while lowering costs, but also to shift from a fixed to a variable costing model. Modern platforms are more efficient in every sense.
Granted, platform modernization requires a significant investment. But if it’s an inevitable step, then there is a case to be made for benefiting sooner rather than later, and setting the pace rather than playing catch-up.
In my final post in this series, covering the findings and recommendations of Accenture’s Insurance 2020 studies, I’ll discuss an issue of growing importance for all carriers: governance and risk management. To read the earlier posts, click here.