The insurance journey of tomorrow
By Ben Burger, Managing Executive at SilverBridge Holdings
Disruption taking place through isolated digital innovations are a thing of the past. Instead, a complete digital policyholder journey is becoming the expectation within insurance. This can be attributed to how innovation has become commonplace for a business to stay ahead of the curve.
In the past, the challenge has been to convince stakeholders of the merits of digital transformation initiatives. However, the COVID-19 pandemic and resultant lockdown have contributed to an awareness that modernisation and digitalisation strategies can no longer be ignored. These are now an imperative if the insurer hopes to meet changing customer expectations accentuated by the pandemic.
In more mature markets, the policyholder wants an online experience that is quick and user-friendly. This consists of a range of customisable options with immediate (automated) decisioning from the insurer. In developing markets, there is a need for mobile straight-through processing with cover options that require minimal explanation. Of course, this might sound straightforward from the outside, but herein lies a host of challenges for the incumbent insurer. This is more so the case if they are sitting with legacy software incapable of transforming the fulfilment process to cater for the needs of the modern policyholder.
The question now centres on the technology and process roadmap required to service this digital client. How quickly one can either ‘rip and replace’ legacy technology with more agile technology, or integrate the old with the new?
To answer this, an insurer must examine the way their legacy systems are set up:
- Does the architecture allow for easy integration with agile technology to re-use what you have?
- Does your current service provider (or system) allow for the digital onboarding and contract fulfilment of the policyholder?
- Are you having conversations about intelligent process automation to take the next step in creating a seamless policyholder journey?
- What about true straight-through processing from digital marketing to onboarding, and underwriting through to claim payments? Is it seamless, or does the digital process stop for the policyholder when onerous manual tasks need to be performed in the backend?
To generate business and keep existing customers, the experience of the policyholder is paramount. Whether it is a direct channel (ie, policyholder self-service) or through a broker network, this is what generates business. Get that right, and the rest becomes optimisations to improve existing margins.
A clear and aggressive modernisation roadmap should be considered before trying to digitalise processes. If an insurer tries to digitalise with outdated legacy technology, it is akin to running a marathon barefoot. While it is possible to do so, there is little justification for going through such a painful process.
Combining the vision of the digital customer journey while still managing costs in these uncertain times must be a priority. But with changing customer expectations, insurers can ill afford not to examine ways to continue delivering more value. This might extend to evaluating the effectiveness of digital channels and leveraging agents in more dynamic ways. Data integration and analysis become vital tools in this regard. Not only will this help pave the way for using the likes of AI and robotic process automation, but it will also empower agents with better insights on who customers are as well as their immediate requirements.
Technology for its own sake has little value if not used to modernise systems in ways that make business sense. This is where a people and customer-centric mindset should take priority to pave the way for the technology change to come. One of the myths that still perpetuates the market is that modernisation is simply replacing the core platform with a best-in-class option.
The level of complexity required to fully embrace digitalisation efforts requires a more nuanced approach that sees the issuing of new policies from the digital environment, while maintaining existing ones on the legacy platform. This enables the insurer to migrate on its own terms instead of trying to rip and replace invaluable data built up over many decades of doing business.
Digital brings with it several business benefits that range from introducing a layer of resilience to changing market forces to deliver on the shift in customer behaviour. Modernising the insurance business can greatly assist it in responding in a more agile way to external market forces.
The onus is on insurers to start building internal confidence in modernisation projects. There must be a willingness to change and to affect that change in ways that can be measured. Putting in place a business case for any digital initiative becomes imperative to helping ensure its success. Those insurers who embrace digitalisation and modernisation will be the ones building a business for the future capable of meeting evolving customer requirements.