As you know, here at Riskheads, we’re big fans of technology being used to improve insurance offerings. We’re firm advocates of using technology to lower costs and improve customer service. One thing we’ve realized is that while we’ve often signposted technological benefits – we’ve never taken the time to examine what makes for a “digital performer” in insurance compared to those that are lagging on the field.
With that in mind today we’d like to take a look at five key factors in driving digital performance in insurance:
1. A Well Defined Strategy
A recent survey by PWC showed that many CEOs of insurance companies are actually worried by technology. We think that would disappear if insurers had a well-developed strategy to take advantage of technology. Technology shouldn’t be scary; it should scream “opportunity”. We’ve seen that both Google and Amazon are considering entering the insurance market and that means that technology is looking at insurance and thinking “opportunity”. Insurers need to take the time to decide how they’re going to approach technology rather than bury their heads in the sand.
There are plenty of new technologies emerging in the insurance field from telematics to mobile applications. Once a digital performer has their strategy in place – they’re investing in that strategy. That means putting their money where their mouth is and ensuring that the technology is given the best chance to succeed within the business environment. Under-investment and over-cautious approaches to new technologies often means that the opportunity will pass you by.
3. Maturity of the Digital Model
When you first develop a digital strategy it’s likely to be held close to the center. You’ll be looking to develop a model that works well before you roll it out across the wider-organization. That’s a sensible move and digital performers tend to find that as they become better at delivering expected results that they decentralize their model and integrate digital strategy within each individual business unit.
4. Digital Talent
You need the right people in place to deliver digital performance. Management needs a background in relevant technologies and ideally they should have spent some time within the technology industry or in academia at a high-level working on research projects in related fields. You also need to make certain that everyone else in the business can get on board with digital projects – that’s the responsibility of in-house development teams. Training programs can ensure that your people are pulling together in the right way to deliver the results you need.
5. Digital Learning
This may be the most important point of all. Digital performance is removed from blame culture. Technology strategies grow and change. You need to learn to implement new technologies, measure the success or failure of those technologies and then learn and adapt. There should be rewards in place for calculated risk-taking and failures attributed to “lessons learned” rather than being seen as an excuse for a “witch hunt”. Most importantly; insurers that perform well in the digital field make sure that they can measure their return on investment for their digital strategy and seek to grow that return at every opportunity.
An effective digital approach should help the light-bulb go on in the board room and help insurance CEOs embrace rather than fear the benefits of technology.