June 2, 2015
Ready for a New Consumer Channel?
Digital windows create new channels to customers but are opening faster than we can gather the information that is flooding in.
How long is it until my smart bowl tells my Apple Watch how many grams of Fruity Oat Puffs I consumed this morning? The watch could then contact my life or health insurer, which may notify me or my healthcare provider, sending a text to my smartphone reminding me that I’m on target to reach my life and wellness goals…if I can avoid eating a second bowl. The circuit will then be complete. Digitized automated processes flowing real-time through a channel into the insurance and healthcare value chain, beginning with behaviors and ending in better life and health outcomes. I’m all in!
This is reality today! Just look at John Hancock’s recent introduction of a health activities rewards program utilizing mobile apps and wearables to improve mortality and lower life insurance premiums for participants.
We are rapidly moving into a new age of digital delivery for every area of insurance, not just healthcare. The digital windows are opening faster than we can gather the information that is flooding in. The proliferation of sensors and the Internet of Things will forever change our business models and our system architectures. The Apple Watch, like my smartphone, is another window into my habits and preferences, and it will be a valued source of feedback for any insurer that becomes digitally ready to capitalize on it. The key to digital readiness, however, is to tackle preparations in the proper order.
Focusing on an individual channel and technologies should take a backseat to foundational tasks such as preparing the core data environment. In many cases, an organization needs to do a much larger enterprise-wide assessment to make sure certain digital initiatives are built upon a solid backbone of system and server readiness. These are not steps backward. They are surefooted steps forward to create new systems and rewrite processes in a manner that will serve the entire organization.
It’s important to remember that great benefits (cost savings, efficiencies) can be found when looking at technology threads across the value chain, whether you are looking at data storage or mobile integration. Who, inside and outside the organization, will benefit from digital transformation? Mobile technology is an excellent example because it touches a broad set of services — from telematics to “gamification,” customer service to agent service, billing to claims, marketing message delivery to weather and property alerts. Digital preparedness, from the bottom up, will include strategies that reach into every corner of carrier operations. With all of the digital possibilities, starting at the core becomes a clear necessity.
There is evidence that many organizations are laying the proper groundwork. For example, in a 2014 Celent survey of North American P&C CIOs, the top three digital priorities were:
- Industrializing business processes,
- Streamlining communications with customers in an online portal, and
- Being able to sell insurance products online.
At first, these don’t seem to fit with 2015 smart watch and drone use headlines, but they do fit with a wise approach to establishing digital readiness. Any enterprise digital strategy aimed toward personal device technologies needs established online capabilities, mature automated business processes and modern data warehousing. Insurers can begin by consolidating siloed systems. This makes “one customer view” across systems and products possible. Transforming online quoting, underwriting and selling technologies is a logical next step, if it is still needed.
These base capabilities speak directly to insurance business objectives regarding growth, loyalty, retention, cost reduction and process optimization. If an insurer succeeds at these crucial first steps, it is a much shorter route from core digital readiness to capitalizing on Apple Watch data opportunities (and any other data opportunities).
If the Apple Watch can do one thing for the insurance organization, it can be a driver to accomplish digital readiness goals. Smart watch headlines should be a signal to the C-suite that the Internet of Things will be the fuel of real-time data and competitive analytics for years to come. Any technology promising a closer tie to customers is one in which we should all be interested.