Other parts of this series:
The relentless pace of technological progress is contributing to a constant reshaping of customer expectations in the insurance industry. Customers now expect levels of personalization and on-demand accessibility that match the leaders in customer experience. The race for insurers to deliver what digital, on-demand customers want has sped up dramatically.
In January of 2016, the World Economic Forum, in collaboration with Accenture, released a report on the insights discovered in the Digital Transformation of Industries (DTI) initiative, with a set of accompanying recommendations. The report identified how enterprises can formulate and implement strategies to succeed in the battle to attract and retain digital customers.
Three new battlegrounds where insurers will need to compete to win over the “digital customer”
Products and services to experiences. A number of companies are using digital technologies to offer customers unique and unforgettable experiences, as insurers are seeing the customer experience as an increasingly important differentiator.
Hyper-personalization. Customers increasingly expect personalized and highly relevant interactions, catering to their individual contexts. Digital technology is enabling insurance companies to meet these expectations by delivering personalization to large numbers of customers at low cost.
Ownership to access. Customers are attracted by the convenience of on-demand access, the prospect of financial savings and its potential to improve their quality of life. Insurance companies that traditionally engaged in ownership models are evaluating opportunities to cater to new expectations of access.
Key areas require particular attention for insurers to stay relevant during digital transformation.
Although disintermediation and disruption are happening, it is not too late for analog incumbents (successful insurers that predate the digital revolution) to compete with digitally native start-ups.
Digital business models. Insurers need to fundamentally change the way they identify, develop and launch new business ventures.
Digital operating models. Digital leaders should follow a lean approach to both core and support functions.
Digital talent and skills. Insurers need to attract, retain and develop the right digital talent. It is imperative for organizations to encourage millennials to join their workforce and adapt to different ways of working, whether it’s integrating robots or on-demand workers.
Digital traction metrics. It is important to monitor digital traction metrics and react to them in real time. Furthermore, digital transformation is starting to have profound societal implications. Insurers need to focus on two key areas to stay competitive in the digital age:
Employment. Overall, there is huge uncertainty about the impact of digital transformation on jobs, with concerns also about its impact on wages and working conditions. But digital has significant potential to create employment. A huge premium rests on the near-term ability of insurers to upskill employees and shape the next generation of talent for the machine age.
Trust. Social media, RFID tags and user-generated websites have all been instrumental in increasing the transparency of insurers and overcoming information asymmetries. However, according to the Edelman Trust Barometer, trust in all technology-based sectors declined in 2015, with concerns over data privacy and security a key factor.
Going forward, establishing new norms of ethical behavior with digital technology, and establishing higher levels of trust with stakeholders, will be critical elements of successful digital transformation for leaders in insurance.
Learn more by reading the full report: