Tag Archives: digital insurance 2.0

How to Innovate With Microservices (Part 2)

In Part 1 of this blog series, we shared how a microservices architecture can bring value to a constantly changing business environment. In this segment, we will share our views on the benefits of a microservices architecture for the insurance industry.The traditional insurance value chain and subsequently the customer experience over the last two-plus years has operated across a number of functional silos. Each of these silos has unique characteristics and is organized around its own KPIs. For example, underwriting/risk management is focused on risk assessment, underwriting quality and booking of premium. Claims is focused on claims management, fraud detection, leakage reduction and processing turnaround time. Typically, each of these functions operates with limited organizational integration.

This organizational design is several decades old and inspired by Henry Ford’s assembly line innovation that optimizes processing costs through specialization and automation. This design has served insurance well during the industrial and information ages, leading to specialized functional IT systems targeting the business needs of the silo functions from underwriting to policy management, billing, claims and more. The core system components are integrated as a suite. The components and suite serve well-defined functions that have had less dynamic integration needs.

This organizational model and IT system landscape has been effective for decades. But as we enter the digital age, the painful and expensive business and IT modernization projects over the last decade, coupled with portals and complex integrations to these core systems to improve agent and customer experience, do not align with new market needs. Today’s insurance landscape demands agility to adapt with ease, innovation to reimagine the possibilities and speed to capture the opportunities. The digital age demands so much more to stay relevant and competitive.

Customer Experience is the Differentiator

Customer experience is front and center in differentiating insurers in the digital age. It is a key factor in driving higher customer acquisition and retention, which, in turn, drives growth. Customer experience is much more than offering a better user interface. It is about the customer journey that creates a unique, compelling and engaging experience that makes it “easy to do business” with insurers. Customer journeys must cut through functional silos, which are currently optimized for internal operational efficiency. These silos, however, as customer journeys are changing, are now contributing to the degradation of the customer experience. To design and refine customer journeys in today’s digital age, insurers will need to collect siloed capabilities into a new virtual capability designed to optimize the customer journey. This new virtual capability will require hyper-integration and micro-granularities of system capabilities to achieve the desired result.

See also: Insurance Hasn’t Changed, but… (Part 5)  

Insurance Value Chain Disrupted

As we highlight in our Future Trends 2018: Catalyzing the Shift to Digital Insurance 2.0 report, the insurance value chain is rapidly shifting to adapt to new business models, innovative products, expanded distribution channels, new competition with entrants from outside the industry, elevated customer expectations and emerging technologies.

Digital transformation is redefining the value chains and each component. New products such as on-demand products, connected products and micro-insurance are reshaping business assumptions and fundamentals. We are seeing innovative product design that uses new sources of data, new risk assumptions, micro-segmentation, expanded services, new customer engagement approaches and new channels to reach customers. These designs leverage new technologies such as artificial intelligence (AI), cognitive, analytics and microservices. The result is the disruption of the insurance value chain. With the value chain disrupted, the underlying systems must be disrupted, too.

Rise of Ecosystems and the Platform Economy

As we enter the digital age, the blurring of traditional industry boundaries is seeing the rise of ecosystems and the platform economy. Companies like Apple, Alibaba, Google, Amazon and Facebook are at the forefront of this shift. They are using an ecosystem with connected services from different parties to create a seamless customer experience.

An ecosystem is the DNA of the platform economy, enabling a business model to exchange and share value among its partners and customers. To meaningfully participate in the platform economy, insurers must embrace ecosystems and be prepared to partner with competitors, other industries and innovative technology-based service providers. ZhongAn, an online Chinese insurer, generated 70% of its 2017 car insurance premium in one month (January 2018) by using AI and big data with the ecosystem, including carmakers, dealers, after-sales service providers and lenders that created market reach and a loyal customer base. The ecosystem approach eliminates traditional industry or organizational boundaries in designing products and creating a new customer journey. However, it necessitates the need for a flexible and granular system composed of different services running on different technology platforms that can easily integrate with any ecosystem.

A New System Paradigm for the Digital Age

A common theme is emerging that highlights the need for a new set of capabilities to support the paradigm shift. To succeed, let alone survive, insurers will need to respond to the value chain disruption, elevated customer expectations and the rise of the ecosystem and platform economy by using granular (single responsibility principle) API/microservices to build an on-demand business solution with loosely coupled microservices and find-n-bind capabilities that can leverage any ecosystem.

A microservices architecture enables the building of new capabilities to meet these needs. The graphic below contrasts the anatomy of a traditional “pre-digital age” monolith insurance app and a “digital age” innovative microservices-based insured app.

Today’s monolith insurance systems, although partially accessible through APIs, are built as a large deployable monolith unit. This architecture does not easily adapt to the rapid pace of change because the change is to a large-system single codebase and specific localized API. A separate API layer exposed over the single-monolith code base makes it difficult to integrate with ecosystem partners as well as making it extremely complex to orchestrate services across various systems or apps.

In contrast, a microservices architecture decomposes a large unit into fine-grained single purpose, self-contained and independently deployable business services that enable the ability for rapid change and open the possibility of multiple change deployments daily instead of waiting for the periodic release cycle. Using microservices across various apps, insurers can orchestrate a composite user interface that is a tailor-made customer journey. It can be enhanced quickly based on customer feedback. The graphic below shows how a microservices architecture can assist in the design of a unique customer experience using a product offering and ecosystem.  Multiple customer journeys can be assembled by orchestrating functional microservices and ecosystem services available outside the insurer enterprise.

The times are changing. And it is exciting! The ability to leverage powerful microservices architecture to build a new foundation for the digital age of insurance is game-changing. It will enable new business models, new products, refined customer experiences and timely responses to new business needs (in hours and days instead of months and years), and it will help insurers remain relevant and competitive. While microservices is exciting and will accelerate the industry’s ability to innovate, it is not the Holy Grail. The smaller, focused services have many advantages but also create complexity in the orchestration of those services. Employing best practices in designing microservices size and data model sizing is critical. Most importantly, determining the gradual transition to microservices rather than a big-bang approach will help insurers build a platform that can withstand the test of time and constant change to help insurers participate in the digital age and platform economy with agility, innovation and speed.

See also: It’s Time to Accelerate Digital Change  

In Part 3, we look forward to covering our views on best practices in introducing and scaling microservices within the world of the monolith IT system environment. We encourage you to read our thought leadership, Cloud Business Platform: The Path to Digital Insurance 2.0, to gain a deeper insight on these topics. Please share your views on this exciting topic in the comments section. We would enjoy hearing your perspective.

This article was written by Manish Shah and Sachin Dhamane.

Digital Insurance 2.0: Benefits

The disruption and changes that are reshaping economies, industries and the businesses within them are providing unprecedented growth opportunities for employee and voluntary benefit insurers in terms of new markets, new customers and the demand for new products and services … creating Digital Insurance 2.0. The gig economy, evolving healthcare markets, shifting industry boundaries due to mergers and acquisitions (M&A), cost shifting from employer to employee, new behaviors driven by digital companies as well as new technologies and the growth of small and medium-sized businesses (SMBs) are at the forefront of these changes and opportunities.

Familiar Market, Brand New Look

While the outlook for employee and voluntary benefits is promising, the market no longer looks like it once did. In our new thought leadership report developed jointly between Majesco and Milliman, A New Age of Insurance:  Growth Opportunity for Employee and Voluntary Benefits Insurance in a Time of Market Disruptionseveral factors are converging to create change and opportunities in the employee and voluntary benefits landscape, as illustrated in Figure 1.

Figure 1: Forces creating opportunities in the employee and voluntary benefits market

The two largest generations, Baby Boomers and millennials, are in the midst of rapid transition. Their shifting positions within the general population, the workforce and business leadership are rapidly reshaping the market landscape. The behaviors and attitudes of both generations are substantially influenced by economic conditions, and digital technology is rapidly becoming an integral part in their lives. Gen Z is further intensifying this shift. These factors have helped fuel the rise of the gig and sharing economy, which is estimated to encompass 35% of the U.S. workforce today and is continuing to grow and expand.[i]

Together, these and other forces are creating employee and voluntary benefit needs and expectations that present unprecedented opportunities for growth. The growth in new affinity groups; increased demand for benefit portability; and the growing demand for new, non-traditional benefits and services that offer a simplified, satisfying customer experience are just a few of the dramatic shifts in needs and expectations.

See also: 4 Good Ways to Welcome Employees  

The market landscape will continue to rapidly transform as workers’ and employers’ needs and expectations shift, healthcare reform continues to change, industry boundaries shift with M&A, marketplaces evolve, new products are introduced and new competitors emerge from within and outside the industry. The surge in employee demand for innovative voluntary benefits are an increasingly critical element to attract and retain top talent for companies, particularly as we continue to see unemployment rates decline, as boomers retire and as the fight for technology talent intensifies.

Adding fuel to the market shift is the rapid emergence of new technologies like wearables and advanced medical devices and exploding data (among others) that are redefining the insurance market into one focused on well-being, lifestyle and longevity, rather than illness and death. Innovative benefits are increasingly focused on digital health and well-being, elderly care, pet insurance, college loan repayment and the demand for digitally enabled customer engagement.

Making the Marketplace and Workforce Changes Work for You

Greenfields and startups saw these opportunities early, but existing insurers are now quickly developing strategies and plans to capture this once-in-a-generation opportunity.  Insurtech has fueled significant investment by venture capitalists, spawning companies like Zenefits, Maxwell Health, ZhongAn, Discovery, Allan, Bright Health and Clover Health.  We now see existing insurers begin to focus on the opportunities, such as MetLife focusing on the SMB market. At the same time, the increased demand for portability of voluntary benefits due to the generational acceptance of frequent job change offers insurers a unique opportunity to cost-effectively capture employees as individual customers and to keep and grow individual relationships (and premiums), rather than losing relationships through attrition.

The robust, once-in-a-generation opportunity is seeing insurers of all types developing strategies and plans to capture business, including:

–Traditional worksite carriers specializing in supplemental products such as accident, cancer, critical illness, hospital indemnity, voluntary STD, term life, universal life and heart/stroke insurance are expanding their portfolios to include voluntary LTD, gap, dental, whole life or vision products.

–True group carriers that historically specialized in group products, including term life, basic AD&D, group STD and LTD, dental and vision are expanding their product portfolios to include accident, critical illness, hospital indemnity and gap insurance.

–Medical carriers specializing in major medical coverage have been acquiring supplemental benefit carriers or administrators to expand their portfolio with supplemental products. They may have a competitive advantage because of their ability to harness and analyze extensive medical data.

–Finally, we are seeing a range of other carriers including multi-nationals, P&C carriers, retiree market specialists, and others that are entering the market with unique voluntary benefits like pet insurance and legal insurance as well as expanded affinity market programs to capture the opportunity.

Underlying each of these is the need to respond with innovative products, plan designs, underwriting and pricing as well as new services, distribution channels and customer engagement approaches enabled by modern digital platforms. Thinking about the best strategic approaches to pursue to maximize the potential of these new products, services and processes will be critical for success.  Several approaches that are gaining traction include:

–Product differentiation: Insurers can differentiate themselves in a crowded market by offering a complementary portfolio of unique products, services and benefits. Differentiation may be achieved through value-added services (if exclusivity is achieved), creating an integration model across products, aligning products and benefits with a carrier’s identity, etc.

–Adjacent markets: Traditional group carriers are developing individual products to compete in digital, direct-to-consumer markets, and traditional individual carriers are developing group products to compete in the gig economy or growing affinity markets. Carriers operating in the consumer market are expanding into retiree markets, and carriers in the retiree market are moving into consumer markets.

–Product bundling: The demand for product bundling, or “combo” products, has recently increased. Sample combo products may include a group hospital indemnity product with accident, critical illness and term life riders or a universal life product with a long-term care rider. While these are just two examples, a large number of product combinations may be considered. In all market segments, and in particular the SMB market, combo products can broaden coverage, increase affordability and reduce or eliminate the need for underwriting by limiting anti-selection.

–Rapid product development: We are seeing an increasingly quick pace of product development, which is in stark contrast to the long shelf life of products before the ACA. In addition, carriers in the large market are frequently required to customize benefits and rates for distribution partners as well as employers. Keeping up with this pace requires a nimble technology solution for administration, billing, claims and operations. Carriers that are using newer technologies will have a distinct competitive advantage, especially in the large account and broker markets, as these technologies provide increased flexibility and speed to market. This competitive advantage also applies to the bottom line, as more efficient technologies can eliminate manual processes and reduce expense margins.

See also: Value in Informal Employee Networks  

–Partnering with emerging technology/insurtech: Insurance markets are being flooded with new insurtech startups. Some of these startups provide products or services that complement employee and voluntary benefit carriers’ value propositions. Existing carriers would be wise to identify the key startup companies in their markets and establish strategic, beneficial partnerships.

Reap the Benefits of This Unique Market Opportunity

There are a multitude of exciting opportunities for employee and voluntary benefits insurers in this rapidly evolving market. The unprecedented pace of change will drive out old business models and allow new ones to flourish with the introduction of products and the offering of new services, plus interesting mergers and acquisitions such as Aetna and CVS, and the emergence of new business models via insurtech and established insurers.

There is no longer a doubt or debate regarding the need to digitalize insurance, but this still continues to be an unpaved path for insurers. Not many understand the best way to achieve it. Insurers are still in the midst of legacy modernization of their core systems for strengthening their back-end processing capabilities, but most realize that these initiatives will fall short without digital transformations that will bring meaningful benefits to customers and ultimately to win them. In this new market, insurers will need a single platform to support individual, group, voluntary benefits and worksite across all lines of business and with a design flexible to adapt to new products, workflows, distribution channels and even devices. The platform will need to enable portability of voluntary benefits to individual policies as well as innovation of products where the same product can be offered as an employer-paid, voluntary or worksite product. Platforms must increasingly make it easy to customize plan options for groups.

There are a multitude of potential futures for group, employee and voluntary benefits insurers in an increasingly volatile world. The rapid and unprecedented pace of change will drive out old business models and allow new ones to flourish with the introduction of products and the offering of new services, and much more, from both new insurtech startups and established insurers.

At the heart of the disruption is a shift from Insurance 1.0 of the past to Digital Insurance 2.0 of the future. The gap is where innovative insurers are taking advantage of a new generation of buyers, capturing the opportunity to be the next market leaders in the digital age.

It is a once-in-a-lifetime opportunity for insurers to redefine the market and competitive landscape in employee and voluntary benefits. Be one of them!

Digital Playbooks for Insurers (Part 1)

Football, in its infancy, had no plays. In the late 1870s, the visiting team would travel to the home team, where both teams would agree upon the set of rules for that game. The home team would supply officials, causing occasional controversy, and the game would be off and running.

There was no quarterback, no set of downs and very few rules regarding possession of the ball.

It wasn’t until Walter Camp, a former Yale player, introduced the concept of a quarterback and a limited time of possession, that “plays” became important. Camp wished to provide more of a strategic element to game play. This resulted in more practice, more play calling and much more interest in the game.

Play calling and playbooks have increasing value and tremendous application for insurers as we rapidly shift from Insurance 1.0 to Digital Insurance 2.0. A playbook is meant to provide strategic direction that fits with current or projected circumstances. When business strategists read the industry, the different market segments and demographic trends, they can apply their plays more effectively to capture market share. Those without playbooks and plays will find themselves scrambling from priority to priority, instead of confidently executing their strategies to earn the win.

Majesco is helping insurers build their unique digital playbooks with our strategic business platform solutions and market research-based, thought-leadership reports. In two of our recent reports, we provided both generational consumer playbooks and generational small-medium business (SMB) playbooks that give insurers valuable insights into digital capabilities enabled by technology’s potential that will energize insurance plays. In my next four blogs, we will draw on both reports to look at both Pregame Analysis and Ideal Offerings that insurers can use to target consumers and SMBs.

Consumer generational playbooks — Pregame analysis

Scouting the opposing team is the basis for creating and applying plays from the playbook to win. You’ll find an excellent scouting report of consumers (broken out by generational demographics) in Majesco’s recent thought-leadership reportThe New Insurance Customer — Digging Deeper: New Expectations, Innovations and Competition. At a high level, the report highlights the demographic trends that are pointing to a different future for insurance, which we call Digital Insurance 2.0, recognizing that customer expectations, product needs, engagement and more are vastly different than the last 30-plus years.  New experiences and technologies are becoming “the new norm” across all generations but are more intensely and rapidly changing to the next generation of insurance buyers, Gen Z and millennials.

See also: Does Your Structure Fit Your Strategy?  

Throughout time, the youngest members of society have traditionally been the early adopters of new technology. Millennials and Gen Z are the early adopters of our current, digital age. Both generations are digital natives. Millennials grew up digital in a world connected by the internet, and Gen Z was “born digital” in a world dominated by mobile. In our Changing Insurance for the Digital Age report, we highlight that the U.S. millennial market alone could exceed $7.2 trillion by 2025 and is the driving force behind increasingly personalized capabilities based on unique customer journeys involving engagement and real-time personalized product delivery. However, nearly 69% of millennials remain either actively disengaged or indifferent with their insurance carriers. Adding to this shift and momentum is the fast-emerging Gen Z market, which is poised to surpass the size of the millennial market.

Simply put, for these digital generations, the traditional products, the business models that support them and the customer experience do not align with their growing market dominance. We found that millennials and Gen Z demand much more in personalized products and experience, putting innovative products and competitors at an advantage.

The scouting report highlights new consumer behaviors and expectations

Driving that point home, Majesco conducted consumer research in 2017 to determine the acceleration in changing digital behaviors across a number of technology and business indicators — the factors that are reshaping insurance. To capture the next generation of buyers, let alone retain current customers, insurers must begin to use playbooks that are aligned to the generational consumer needs and expectations, personalizing insurance, and place their companies firmly into the realm of Digital Insurance 2.0.

We found that all generations share the top three most-performed “new” activities that we used as consumer trend indicators. There are substantial numbers of people who have now:

  • Paid for something with a company’s app (e.g. Amazon, Starbucks)
  • Paid for transportation through a ride-sharing service like Uber or Lyft
  • Used a fitness tracker like Fitbit, Garmin, etc.

The Gen Z and millennial generations are at about 45% to 60% in usage of the top three, indicating a critical mass of interest. And while Gen X and Boomers are in the 30%-40% range, given the growth in usage we expect this to continue in an upward trend, as their comfort level with digital technologies increases. Customers across all generations have come to expect the convenience of researching, buying and paying for products, services and information on demand – any time and any place – via any device (phone, tablet, wearables) … and that includes insurance.

The on-demand context of these behaviors, based on location, time and activity, lend themselves well to insurance applications, as risks are influenced heavily by where a person (or thing) is, what they are doing and when and how long they are doing it. Interestingly, and counter to perceptions of older generations, there is strong on-demand interest by Gen Xers and pre-retirement Boomers … emphasizing why digital engagement needs to be personalized to be effective.

The report categorized analysis of the activities into seven key areas: gig economy, sharing economy, connected devices, payment methods, products, channels and other emerging technologies. Here are some of the highlights:

  • The 2016 Upwork and the Freelancers Union’s annual survey estimated that 55 million people, or 35% of the U.S. workforce, chose freelancing as their means of work. Our survey results confirm that participation in gig economy activities across all generations is similar to the Upwork survey. However, a smaller percentage have “side hustles” via ridesharing or renting their rooms/houses or cars.
  • Consumption of ridesharing services is a dominant behavior across all generations. Home/roomsharing services are used about half as much, yet still have a strong and growing appeal.
  • Connected device use is seeing tremendous gains. Fitness trackers are the most popular type of connected device across all generations. The nearly 33% of Gen Z and 25% of millennials using connected home devices could also rapidly help intensify these new needs and expectations.
  • Use of ApplePay and SamsungPay saw strong year-on-year growth, with more than a third of Gen Z and millennials and a quarter of Gen X now using them regularly. The increased use of digital payment capabilities is raising the bar of expectations across all generations for all types of purchases, including insurance.
  • Across all generations, 22% to 38% purchased insurance from a website, with Gen Z and millennials clearly leading the use of this channel. This suggests the increased ease and desire of the younger generation to buy online.
  • On-demand insurance was surprisingly strong, with 25% to nearly 30% purchasing it for a specific item or event, such as the kind of insurance that Trov offers. On-demand and subscription-based models are rapidly gaining acceptance in a shorter time, as compared with website purchases, which have been around for nearly 20 years.
  • Not surprisingly, Gen Z and millennials lead the older generations in their use of drones and 3D printers (or items produced by one). These are two rapidly growing technologies that present significant risk implications for the insurance industry.

What this conveys to insurers doing their own analysis is that “new” is increasingly “normal,” more quickly. Using research responses, we extrapolated valuable “plays” that insurers may pull for use in their own playbooks.

See also: Stretching the Bounds of Digital Insurance  

The game has already started…your team better join soon  

Many new business models and new products emerging in the market are focused directly on exploiting these new behaviors and expectations. These Digital Insurance 2.0 teams are intent on challenging the traditional products, services and processes of traditional Insurance 1.0 teams. And while customers and the market will ultimately determine their success, we tested five of them and learned they stand a good chance of succeeding, especially among the younger generations who are the new generation of insurance customers.

Furthermore, we decomposed these new products and new business models into 30 distinct attributes and tested them with customers to determine their interest in buying and potential to switch to them. And the interest to buy and switch is strong. Existing insurers need to seriously begin to understand, plan and develop new offerings and capabilities aligned to these … which represent Digital Insurance 2.0.

In my next blog, we’ll look at customer reactions to those business models, assess their viability for use in insurer playbooks and discuss how the 30 attributes can be used to create some Ideal Offerings for different customer segments. For a preview, be sure to readThe New Insurance Customer — Digging Deeper: New Expectations, Innovations and Competition.

Digital playbooks are already in use. Does your company have a strategy to embrace the digital age and shift to Digital Insurance 2.0 to drive growth? The time for developing and using the digital playbook is at hand.

New Business Models Are Needed

The pressures the insurance industry is facing seem to keep coming like an unending stream of tsunamis, beginning with changing customer expectations with millennials and Gen Z and gathering momentum with blurring industry boundaries and the wave of insurtech startups. The ability of the industry to invest large sums of money into creating opposing forces to fight these tsunamis is withering due to a triple whammy … the triad:

  • Increased claims costs
  • Soft market
  • Operational costs that challenge the existing business models

2017 turned out to be a record-breaking year of major catastrophes, including wildfires, hailstorms, flooding, snowstorms and hurricanes, to name a few. It has been reported that, in the U.S. alone, there was $306 billion in total damage in 2017, with 16 events that caused more than $1 billion in damage each. Much of this would be reinsured by the London market or reinsurers. The financial impact is being felt in profitability and the potential for increased risk that needs to be addressed.

The soft market is continuing, with no change soon, given the excess capacity in the market. The excess capital is fueling many new startups in insurtech. In addition, the low-interest-rate environment continues to challenge returns and is intensifying insurers’ focus on underwriting and claims fundamentals. But the pressures to optimize the organization do not necessarily move the organization forward innovatively to compete effectively in a fast-changing market.

See also: Changing Business Models, ‘New’ ERM  

How are insurers responding? Our Strategic Priorities – Knowing vs. Doing research highlights a growing gap between insurers that know about the changes and insurers that are doing something about them. There is an awareness of the pace of change that is signaling unheralded challenges and opportunities. Unfortunately, turning awareness into doing, with actionable initiatives, is elusive, creating an ever-widening gap between leaders who are taking action and those who are not.

If you look at parallels with other industries, it is clear that inaction or traditional approaches will not be enough.

Consider the media, taxi or music industries. The traditional models were significantly disrupted by new entrants or existing companies entering their industry. Just putting the business online or making it accessible via an app is not necessarily enough. Why? Because the fundamental business model did not change to adapt to the broader market change. You just “paved the cow path.”

While incremental steps may optimize your existing business and buy time for the organization, they do not fundamentally change the business model to enable growth and to capture a new generation of buyers with different needs and expectations.

We are seeing new models underway with recent entrants like Lemonade, Tapoly and Meet Mia, embedded insurance by Tesla and the potential for Amazon and Apple to enter the insurance market. All of these new products will be constructed on unique customer experiences that are compelling, consistent, engaging and seamless. The new definition of insurance may mean that you reach far outside of tradition to launch supplemental services you may never have considered. But, no matter how you grow, you’ll need to first shift into Digital Insurance 2.0 — a step that will make flexibility and growth viable.

See also: 4 Tech Impacts on Business Models  

With today’s pace of change, the path of least risk will include taking some risks. The risk to invest in new business models, new products and new channels can, at minimum, keep insurers competitive. Even better, taking these risks could allow insurers to leapfrog the competition. Because the new competition does not play by the traditional rules, insurers need to be a part of rewriting the rules for the future. There is less risk in a game where you write the rules.

This article was written by Viyesh Khanolkar.

A Great Year for Digital Resolutions

When it comes to thinking about 2018, you may have already set some company goals and feel that your plans are in place. Implementing plans, however, can be difficult, and every plan has a tendency to change over the days and months that it grows into a reality. New Year’s resolutions may not be the answer to all of your future issues, but they may help you to maintain focus on important end goals.

If you want to see your organization adapt to new market drivers, remain competitive and relevant, and position for growth in the Digital Insurance 2.0 world, consider these six areas as New Year’s Digital Resolutions.

We Will Focus Forward

The most important high-level resolution an organization can make will be to focus on the future by rapidly moving from Insurance 1.0 to Digital Insurance 2.0. Your Insurance 1.0 business model will continue to be valuable for meeting the traditional needs of your current customers. But Digital Insurance 2.0 is rapidly emerging with new business models, products and processes that meet the needs and digital expectations of a new generation of insurance buyers. The digital future is exciting, compelling and important enough to begin aggressively preparing for a new future of insurance and cutting our mental ties to many of our sacred past assumptions and philosophies.

See also: 4 Ways That Digital Fuels Growth  

We Will Wake Up to Shifting Customer Behaviors

What caused some insurers to be slower on the digital uptake in 2016 and 2017 was a general lack of understanding of the shift in customer expectations, among both consumers and business owners. Many insurers didn’t think that growing customer trends would dramatically alter their own products and services — or that customers were going to play such a large role in pushing technology adoption. They didn’t foresee that customers’ digital utilization would affect all industries, rewriting the idea of competition and removing any sense of loyalty and security.

Now, that’s history. Technologies allow startups to compete using customer-centricity, as opposed to products, as their value offering.  And a new insurance paradigm is being crafted regardless of whether incumbent insurers choose, or are able, to play to compete in the era of Digital Insurance 2.0. For reference on just how deep these changes go, be sure to read Majesco’s research report, The New Insurance Customer – Digging Deeper: New Expectations, Innovations and Competition. Look for our research report on small-medium businesses later this month.

Every day in 2018 and beyond, we should attempt to be sensitive to the power of consumer opinion and behavior that will affect insurance. Our newfound sensitivity will allow us to become more innovative as we match our new technologies to consumer desires.

We Will Pursue Speed to Value

The best New Year’s resolutions are those where constant application will provide clear impact. When insurers link business drivers to cloud business platform capabilities, they can begin to prioritize their efforts based on speed to value and a logical progression toward digital expertise.

Realizing business value sooner with iterative rollouts is the essence of speed to value, a defining competitive element in the digital age. This includes speed to implementation, which provides the ability to get up and running in weeks or a few months versus years; speed to market, where you can rapidly develop and launch new products or enter new states with ready-to-use rules and tools; and speed to revenue, which rapidly enables business growth with minimal up-front cost. Speed to value is redefining a new generation of market leaders that leaves traditional, slow-to-respond business models increasingly at risk of irrelevance.

We Will Build to Flex

Homes and buildings in earthquake-prone communities are now built or retrofitted to withstand the unexpected tremors (and risk) that would crack traditional foundations. Insurance can take a lesson from earthquake-proofing. Our operations are similarly prone to other kinds of “earth-shaking trends” and risk that require the business to flex without breaking.

Digital preparations must consider the unknown future. In everything insurers do, they should be removing rigidity and replacing it with agility and flexibility. Emerging technologies and connected devices will be adding value to insurers’ abilities to protect customers and compete with startups. But these technologies will only yield benefits to insurers that can quickly and efficiently plug them into a “find and bind” architecture on a cloud business platform to beat out competitors with new service offerings. The same digital preparations apply to channel development. An omnichannel presence is a digital one, providing seamless customer experiences.

We Will Look for Greenfield Opportunities

Market opportunities are all around, emerging rapidly in a fast-changing world. The intense industry disruption from changing customer expectations, advancing technology and shifting market boundaries creates risks and opportunities that many startups and greenfields are taking advantage of. Likewise, a growing number of existing insurers are incubating new ideas and products to spur innovation and gain market insights and advantages. These opportunities are within growing segments that are underserved or unserved for both P&C (personal and commercial) and L&A (individual and group/worksite) market segments. For a deeper view on these opportunities, read A New Age of Insurance: Growth Opportunities for Commercial and Specialty Insurance in a Time of Market Disruption and the coming A New Age of Insurance:  Growth Opportunity for Employee and Voluntary Benefits Insurance in a Time of Market Disruption reports.

See also: What’s Your Game Plan for Insurtech?  

Traditional insurers are finding that the best way to compete with startups is to be one — forming greenfield businesses that launch outside of current systems and processes for rapid product development and market testing. Life insurers, for example, are ripe for greenfield developments that include digital products that leverage fitness trackers and mobile communications. Mass Mutual’s startup, Haven Life, and John Hancock’s Vitality products are examples of insurers reaching new market segments via a new brand or new products. For an expanded view of greenfield developments in insurance, read Greenfields, Startups and InsurTech: Accelerating Digital Age Business Models.

We Will Embrace the Platform Economy and the Shift to Digital Insurance 2.0

The next generation of core, digital and AI, cloud computing and partner ecosystems have opened a door for insurers in the platform economy, creating the art of the possible by enabling agility, innovation and speed in a time for rapid market changes. Cloud deployment of digital-ready systems can unify an insurer’s environment and prepare it for growth. Just look at the growth and value of other companies using a platform model, such as Apple, Uber and now Lemonade.

The benefit of cloud platforms is in full swing, but from a utilization perspective the insurance industry is only scratching the surface. For insurers preparing “digital first” business models, new products such as pay-on-demand, pay-as-you-use or pay-as-you-need will require the shift to cloud business platforms. The hallmark of a cloud business platform as a new business model paradigm is collaboration via data and information sharing and subscribing (not owning). As a result, traditional boundaries between insurers, partners, third parties and even other industries are being replaced with market dynamics that open doors to improved operations and revenue outcomes.

On behalf of everyone at Majesco, I sincerely wish you and your organization a Happy Digital New Year!