Insights

Helping insurers remain competitive in a digital world

Published on
19 July 2022
Category
Blog
Helping insurers remain competitive in a digital world
Escient’s Mandeep Wasu shares his thoughts on the need for Digital Transformation in Australian Insurers. Drawing on his extensive experience working in this industry he outlines the key focus areas required to remain competitive and why the rewards are worth the risk and investment.

In today’s digital world, Insurers are aiming to create differentiation through their products, services, and user experience to retain customers and gain market share. With the new innovative and nimble Insurers and Insuretechs such as Digit, Hippo, Lemonade, Covergenius, and Blue Zebra entering the market, there is pressure on established insurers to introduce new products and accelerate time to market, whilst driving operational efficiency to manage cost and margin. Insurers have no choice but to embrace digital transformation to stay competitive and an insurer of choice for their existing and new customers. Though established insurers have acknowledged the inevitability of digital transformation most of them are still at the initial stages of this journey.

Most leading insurers have a broad mix of complex policies, processes and legacy systems which limit the pace of change. Decoupling existing systems and information is an essential transformative step for existing insurers. We are living in an information economy and organisations are shifting towards a product driven framework supported by product delivered IT (Information Technology). The establishment of Application Program Interface (API) platforms allow for information to be decoupled from legacy systems and shared with new digital platforms. Innovative new insurers are technology and data driven companies who are striving to protect the future of their customers with simple yet personalized products and with frictionless customer experience – thus, posing stiff competition to established insurers. Incumbent insurers need to transform to meet their nimbler competitors.

How can established Insurers remain competitive?

These are the 3 focus areas in which established insurers should invest:

Platforms: Cloud migration and API enablement – The shift from legacy systems built on Mainframes to cloud enabled platforms offering scale and flexibility. Decoupling information into microservices and API platforms delivers efficiencies and agility to maintain competitiveness and drive faster product to market.

Customer Experience: Enhanced customer service capability – It is important for insurers to enhance their operational efficiency by making their systems more intuitive using human centred design providing the right information to both customers online and employees. Customer service representatives need to be able to increase first call resolution. Through access to customer information from a single screen which in turn is served through APIs (Application Program Interface) from multiple source systems this can be easily achieved.

Intelligent Offers: Enhancing customer experience using Artificial Intelligence (AI) and Analytics – insurers data flows through various channels and leveraging this data for any business can increase sales, reduce operational expenses, and help customer service representatives make faster and more informed decisions. The right set of AI and Analytics solutions can help propose and recommend a narrower range of choices to customers which have a higher propensity of conversion success.

Are the rewards worth the risks and investment?

Executing and implementing such transformational changes is not easy and has its portion of risks such as:

Stakeholder Management: Alignment of the various stakeholders on the digital transformation strategy is key

Financial: Securing funding approval in time for the digital transformation program when the business case is still ambiguous

Regulatory: Depth of understanding on the regulatory requirements related to cloud migration is important to ensure compliance with such requirements

Target State: Resolving ambiguity and uncertainty which is there in the mind of various stakeholders about the future state of the systems

Change Management: Structured organisational change management is essential for the acceptance of new systems and processes

Addressing these risks is important to secure future competitiveness amid the digital disruption. Having an experienced team that can assist you thrive in uncertainty and become more human is important. Our Escient team brings a wealth of experience in executing digital transformation for insurers from business strategy, design, and execution.

We believe Digital Transformation is best approached via multi-faceted phases – Strategy, Design, and Implementation. The Escient team is supported by its Business Analysis, Design Thinking, Change Management, and Project & Program Management capabilities to minimise risks, enhance efficiencies and ensure the success of your Digital Transformation programs.

But mostly, we just want you to have a better experience with better results so you can deliver on your purpose.

To know more about Escient capabilities in insurance space, please contact us through our website pages.

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