January 25, 2021
Myth or Reality? Digitization Is Stalled
The reality is that almost all insurers believe that digital transformation is essential. This belief has only been reinforced by the pandemic.
To assess whether digital transformation is stalled because of the pandemic, we really need to think about transformation from past investments, the current state in the context of the pandemic and the strategies planned for 2021.
Well, 2020 was quite a year! I want to make two key points that we’ve learned during the pandemic. One: The insurance industry is financially strong. It is weathering the pandemic, just like we’ve weathered other natural and manmade disasters over the years. And we should all realize how blessed we are to work in such an amazing industry! The second: The pandemic has brought real clarity to digital engagement and digital enablement across personal and business life. It has highlighted where insurers have made great investments in the past and where our gaps are. The gaps came into sharp focus the minute we went into lockdown and everyone started to work virtually. We saw all the paper: the paper checks, the correspondence and the forms still coming into the organization – along with a lot of paper and paper checks going out of the organization. We also saw a lot of manual workflows, mainframes requiring people in the data centers and our lack of providing digital experiences for our policyholders, agents, brokers, claimants and employees.
And so, as we look forward into 2021 and consider the statement “digital transformation has stalled due to the pandemic,” we can see that it is a myth. The reality is that almost all insurers believe that digital transformation is essential. It is critical to all business strategies and plans. And this belief has only been reinforced by the pandemic. In fact, our experience in 2020 has actually accelerated plans and strategies for digital transformation. The difference is that the strategies and plans are being reshaped and reprioritized as a result of the revealed gaps. Most insurers now have a new list of projects: digital payments, improved self-service capabilities and updating the overall portals for starters. If anything, the list of projects has increased. Another thing that affects our digital strategies is the new clarity around operational efficiency and the customer experience. And so, as we look into 2021, digital transformation strategies are really going to be more about growth in operational excellence, optimizing operations and improving the customer experience, and less about innovation and transformation. So, it hasn’t stalled. We are going full steam ahead into 2021.
See also: The Rules of Digital Transformation
Call to Action:
The call to action for digital transformation is to ensure that your digital strategies are reshaped in response to your gaps and needs, and that they are all-encompassing in terms of optimizing operations and customer experience. Digital transformation needs to be part of your overall business strategy and should be integrated with culture change, customer experience and operational excellence. And priorities should be set using multi-pronged approaches, with both outside-in and inside-out perspectives.
For more information, watch our 30-minute on-demand webinar, Myth or Reality: Strategies for Insurers in 2021.