Why we need to pay attention to Digital Transformers
Over the past weeks, I have been discussing the key findings of our Insurance Digital Innovation Survey. This week, I’d like to look into more detail at the anatomy of the small group of insurers that are embarking on digital transformation, the “Digital Transformers.”
Why should we be watching them? Our Digital Innovation survey shows that approximately one out of four insurers are taking the lead in digital transformation, and this elite group is already setting high goals for success. These are the companies to watch because if their plans succeed, their competitors will be scrambling to catch up.
Digital Transformers tend to be larger, with the human and monetary capital necessary to invest big in digital initiatives. They have earmarked larger-than-average digital investments over the next three years: $56 million compared to $43 million projected by other insurers.
However, what is more striking about Digital Transformers is that they have a much better defined and communicated digital strategy: 73 percent have a holistic digital strategy in place and, as a result, Digital Transformers have a much better defined view of digital value creation.
What does the typical Digital Transformer look like? Our survey pinpoints several key characteristics that other insurers should clearly consider priorities:
- They have or are working on a single view of the customer and are eager to reinforce the link with their customers.
- They are using digital technologies to provide personalized products and services, delighting customers and differentiating themselves from their competitors.
- They have a clear focus on innovation, positioning themselves to become disruptors, and have often created dedicated organization units to help foster and disseminate innovation.
- They have bought or plan to buy innovative companies or start-ups to acquire new digital capabilities, thus positioning themselves favorably in the digital world.
- They are ready to test new approaches and reinvent business and operating models.
- They believe establishing new partnerships is key to differentiation. In fact, they are actively positioning themselves to orchestrate or at least play a part in a wider ecosystem, both as initiator and participant.
- They are three times more likely to engage with their target audiences on social media.
All of these traits directly correlate to higher expectations for success. Combining all the value levers, Digital Transformers are aiming high, not only in growth and profitability, but also in improved production costs, employee productivity, reduced customer churn, and other operational functions, as detailed below.
However, and this is in some way good news, even the Digital Transformers are not shooting as high as we think possible in terms of value creation. This is what we will investigate further in my next blog leveraging a recent study, Double the profits: How high-performance insurers can create business value from digital transformation.
For more information download the report and explore the data using our data visualization tool: Accenture Digital Innovation Survey 2014: Seizing the opportunities of digital transformation
Other papers of the topic that you might find useful:
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