Principles for a Digital-First Mindset

Customers are demanding faster time-to-quote, expedited policy binding and more flexible billing options.

Digitalization has become the new standard for business success and is fundamentally changing how insurers run their organizations. Just four years ago, less than 40% of insurers identified as a digital insurer; today, more than 90% see themselves as one, according to SMA research. While some are only in the nascent stages of digital transformation, others like Chubb are paving the way by functioning as a fully integrated digital enterprise. No line of business is exempt from digital transformation, but workers’ compensation has the largest initial impact, with concerted efforts from many carriers to improve their underwriting through predictive analytics and redefine the claims experiences for injured workers. Leading insurers are increasingly using digital tools, emerging technologies as well as external and internal data, to enhance sales and service experience for agencies and policyholders while minimizing losses and improving ease-of-use. Liberty Mutual, for example, has employed personalized, interactive videos to enhance communications and drive engagement with injured workers. Similarly, insurers such as QBE are leveraging AI and machine learning to improve patient care, reduce litigation potential and manage fraud. However, becoming truly digital is not just about overhauling agency portals or using technology to improve operations. It’s changing the entire mindset of an organization and can touch every aspect of the business including the people, processes and technology. Here are some of the guiding principles to establishing a successful digital mindset. A Comprehensive Digital Strategy An ideal digital strategy blends emerging and existing technologies to redefine a company’s value proposition to create and support all means of engagement and automation across the company. It’s about finding the right balance between effectiveness and efficiency. There are several stages of building a successful digital strategy. The first is a baseline capability of taking a paper asset and making it digitally available. The second is the ability to apply new methods to enhance digital experiences across the board, whether through automation of internal processes or through customer-facing portals. Finally, it involves smooth transition for handling fundamental changes in an insurers’ business model, which includes looping in all parties who will be affected by the change, deploying changes in phases and using the process of changes and upgrades as learning opportunities. See also: 5 Digital Predictions for Agents in 2019   Speed-to-Market Principles As insurers continue to integrate technology into their organizations, competition is escalating, and getting a product to market as quickly as possible is essential to the success or failure of a project. The value that digital tools and platforms provide to an insurers’ stakeholders is of prime importance, but it’s vital that these changes and updates are introduced in a timely manner. Given that, on an infrastructure level, most companies aren’t built to support digital businesses, the best approach is to integrate the new digital capabilities across the organization in increments. Insurers should begin by introducing a minimum viable product (MVP) to the marketplace and then adapt as needed. Using an iterative testing and learning approach will save time and help make the products better-suited to user needs. Simplified Customer Experience The way customers perceive their interactions with insurers defines the customer relationship. Today, people want insurance providers that offer simple, time-saving products and services and have many options beyond incumbent insurers, with new entrants vying for their business. Most insurers begin digital transformation by overhauling their internal processes to support automation, but true digital transformation should also extend to the customer touchpoint. Insurance buyers have a long list of “asks” in the modern economy. They expect broad coverage, state-of-the-art technology and apps to make the processes simpler. They also demand bespoke risk management solutions and faster claims management. What makes catering to this ever-growing demand a challenge is the number of players competing for the same piece of business. On one hand, we have insurtechs and traditional insurance companies looking to offer efficient digital platforms, and on the other, pay-as-you-go insurance models and producers looking to own buyer relationships with innovative customer solutions and product offerings. As a result, insurers should create ways for customers to reap significant rewards by improving time-to-quote, expedite policy binding and create more flexible billing options. An example of how to achieve these goals is to offer seamless customer services using application programming interfaces (APIs), email, telephone and customer portals. Currently, more than 40% of the applications are submitted via agent portals on average, which share policy documents and commission information. Insurers have a complex and deep sales funnel that can be streamlined if internal systems work together to reduce operational friction. Data and Customer Insights Drive Decision Making Insurance companies have access to a wealth of data, whether from customers or third-party data acquired from IoT, sensors and drones. Over the years, insurers have proven themselves adept at collecting data but struggle to analyze, process and organize the information in a way that helps with real-time decision making. The idea is to leverage data-driven insights to model products and solutions while making updates and enhancements to them. An example of a company successfully doing this is Pie Insurance, which uses predictive analytics to expedite and improve the direct-to-consumer quote experience. Routing data across an insurer’s systems is incredibly challenging, which is why more are moving away from disparate core systems and migrating to a unified platform that supports data flow across the entire organization. Evolve With the Market While Inspiring Change Adoption Across the Board Any cultural or organizational change requires educating the affected parties about the value that technology will bring to their day-to-day workflow. Employing new tools to better the business means nothing if it won’t be used appropriately by stakeholders that interact with the solution every day. This promotes actual mindset change and organizational alignment that prepares companies to continue to build on their digital foundation. For example, an insurer might have stringent underwriting guidelines for how a team should use a predictive model to make policy decisions, but, if the underwriters themselves do not understand the tool or how it benefits them, they risk breaking protocol or providing misguided feedback that makes the model less effective. See also: 3 Ways to an Easier Digital Transformation   True digital transformation not only requires an understanding of what’s needed to replace legacy systems, but also depends on a detailed strategy and plan to see the organization through transformation. Building on top of existing technology is just as important for the future and, without organizational alignment, insurers won’t receive critical feedback and suggestions that can help optimize the technology.

Michele Shepard

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Michele Shepard

Michele Shepard is chief commercial officer of Paya.

She focuses on developing and executing forward-thinking customer engagement strategies across sales, marketing and customer success. Shepard's previous experience includes leading high-growth sales and business development teams as well as implementing successful go-to-market strategies at high-growth vertical software companies Insurity and Vertafore. Shepard also served as a senior sales leader at Gartner, focusing on tailoring sales to targeted vertical end markets.


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