An Interview About Driving Digital Transformation in the Insurance Space
The decision to undergo a digital transformation can lead to long-term profitability while simultaneously reducing risk. While digitization is rapidly becoming a critical strategic growth component, and evolving consumer preferences have accelerated these initiatives, there are challenges involved with the process that companies across all industries must navigate.
To offer up some insight specific to the insurance industry, we connected with Robert Fletcher, Head of Global Solution Partnerships for Duck Creek Technologies, to discuss the obstacles and considerations insurance providers may face as they lay out plans for their digital transformation.
Duck Creek recently conducted a survey that found nearly 75% of insurance companies said it would take them three years or more to perform a full greenfield digital transformation. From your perspective, what are the two biggest obstacles standing in their way — and what makes them so common?
Robert Fletcher: Siloed processes and multiple data sources are two significant obstacles that stand in the way of success for insurance companies. Many of these companies have a variety of systems and locations for their data, and it is a challenging task to enact a transformation that upgrades processes and consolidates systems.
Additionally, the need to run the business while transforming can be problematic for insurance companies. The goal is to transform while you also perform. It can be a big feat to move off core systems, which are the heart and lungs of the company, while continuing to drive business.
For those organizations stuck in neutral, what would you suggest as a smart starting point for them to build positive momentum in their effort to drive digital transformation?
RF: When companies want to undergo a transformation, it is usually to achieve an increase in revenue by introducing more products and more regions, to improve productivity with more efficient processes and less IT overhead, to reduce risk by improving IT security — or a combination of the three.
In all cases, companies should understand the value that will be achieved due to the transformation. It is also key to set and achieve short-term wins along the way to maintain momentum.
Across most verticals, the pandemic has accelerated digital transformation initiatives for many organizations. From where you stand, what influence has it had on insurance companies and their approach to meet the on-demand needs of their members?
RF: The pandemic has certainly accelerated digital transformation. Carriers are realizing the power of the cloud and SaaS-based platforms, and the need to innovate with speed. Customers also demanded more from carriers and brought with them to insurance the ubiquitous or omnichannel expectations that were driven by retail, banking, or food services.
For example, customization and personalization took center stage and customers want to manage claims at the time and in the place most convenient for them. Thirty-two percent (32%) of our survey respondents never heard from their insurance provider on an annual basis when there was no claim against a policy and 95% would like to hear more about the status of a claim.
What is a common error or mistake companies can make as they push forward to meet their members’ pandemic-influenced preferences? And what can/should they do to avoid it?
RF: Companies should come to realize that they don’t have to go at it alone. Insurance carriers need to make sure they have the right digital infrastructure in place and the right partners to set them up for both near- and long-term success. Investing in technology solutions that are evergreen — modern, scalable and extensible — is necessary for companies to thrive.
Trying to move with speed on cumbersome, heavy, legacy architecture is another area where pushing forward would be faster achieved by utilizing innovative technology and partnering with the pros. There are a number of out-of-the-box solutions that can be leveraged without major overhauls, and once you move to the cloud, you can scale at the speed that the business needs and that the customers demand.
In an effort to drive transformation of critical insurance communications in an on-demand world, priority tends to favor a digital-first mentality. Can you share your take on the role critical print communications will/must play in how insurance companies communicate with their members, particularly as they embark on a digital transformation?
RF: Even at its simplest level, insurance is a very complex industry. While some policies can be underwritten, priced, and bound quickly, many others cannot. In these instances, as our industry digitally evolves, customers demonstrate that they favor the “digital-analog” experiences. These are occasions where consumers prefer to engage with a web browser or app, want customer service available via chat or phone, but also want the seamless download of policies and related information via PDF. Consumers’ engagement levels vary and it’s important to work with partners that keep the same high level of customer experience from first engagement to last.
As we learned from our consumer survey, customers want to hear from carriers more frequently throughout the year and not just when a claim has been processed or when it’s time for renewal. As products become more agile, so must both physical and digital communications. The right balance of print communication has the potential to close a number of these customer engagement gaps and open the door to new relationship-building opportunities for carriers.
Duck Creek Technologies is an enterprise P&C insurance software company. RRD Business Communication Solutions is a Duck Creek Solutions Partner. To learn more about this partnership, please visit: www.duckcreek.com/partner/rrd-business-communication-solutions