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Insurance companies’ untapped digital opportunities
In many industries, digital transformation creates new opportunities and challenges. Becoming digital also means finding the best way to serve customers based upon available data, intelligence, and insights. The insurance domain can benefit tremendously when digital excellence is their core performance indicator. McKinsay-analists Tanguy Catlin, Pradip Patiath and Ido Segev dive into what digital excellence for insurers means.
From the article:
“For consumers accustomed to easy shopping on Amazon or eBay, choosing a health insurance plan online was an exercise in frustration.
But how important it is for insurers to master digital? While insurance companies all understand that digital is having an impact on their business, few appreciate how fast and how fundamentally the business is changing.
But it is not easy for many insurers struggling with legacy technology and outmoded organizational structures.
A shift to digital would improve performance across three areas:
- The ability to mine the digital data consumers leave behind to better target customers, price and underwrite policies more accurately, and manage claims more effectively.
- The simple digitization of existing insurance processes could yield strong improvement to operating profit margins.
- Increased digital marketing could improve opportunity to connect with existing customers.
What does digital excellence mean in the insurance domain?
- A digital strategy that’s well-defined along the lines of marketing, sales and services.
- Placing bets on specific digital capabilities for the future, e.g. mobile.
- Implemented operating models and governance suited to the organization’s digital maturity, size and capability levels.
- Good talent of which 80 percent has digital experience.
- Commitment to a test-and-learn culture.
From an outside-in perspective, any effort to become a great digital insurance carrier must begin with a deep understanding of consumers and their shopping journeys.
The digital carrier takes advantage of customer insights to inform which battlegrounds are most critical for success, which processes to digitize for a better customer experience, and how to use digital data to inform business decisions, such as whom to target and how to price a policy more accurately.”
Source: “Insurance Companies’ Untapped Digital Opportunity” (Tanguy Catlin, Pradip Patiath and Ido Segev, Harvard Business Review 2014)
About the author
Peter Bogaards (a.k.a. @BogieZero) is the editor-in-chief of our blog BiRDS. Peter also works as a curator and coach at Informaat experience design. He has been an online content curator avant-la-lettre in various UX-related fields for almost three decades, choosing what he thinks is interesting, relevant or remarkable to share.
Digital strategy (21), Innovation (6), Insurance (2)