October 22, 2021 | Written by: Shefali Sonpar
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How to avoid digital Darwinism?
In a world where companies are only as good as its last quarter, insurance companies are under pressure to make decisions that will increase their new business revenue, underwriting profits and reduced cost to show improved combined ratios.
But what happens when the market changes? The future of insurance isn’t going to about numbers only—it’s about people. And in order to be successful for years to come, insurers need to rethink how they do business.
We help Insurers reprogram your company in 3 simple steps so you can drive profit for decades instead of quarters.
1. Designing a “Digital First” Entity
Designing A Digital First Entity Involves Redesigning Operations From The Customer Perspective ; Applying Technology To Be More Responsive + Intuitive + Generate Smart Insights at every stage of the value chain
There is a major shift happening in the insurance industry. Insurance companies now have to compete with Insurtech that are offering cheaper, more innovative products and services. The problem for traditional insurance companies is that they lack the agility and speed of nimble start-ups. It’s like digital Darwinism: those who can adapt will survive, and those who cannot will perish (think Blockbuster).
When a business focused Chief Digital Officer (CDO drives transformation agenda they will enable the heart of the company (operations, underwriting and claims) to foresee what trends are disrupting insurance industry so that they can prepare strategies to respond effectively. Reimagining and not just Rethinking is the need of the hour. IBM is helping increasing number of Insurers with the hunger to improve by building a robust digital platform.
Future thinking insurers are adopting a digital-first approach such that all processes from distribution to New Business, Servicing to Claims flow seamlessly and enable insurance companies to have entirely digitised operations. It will allow them to reimagine customer journeys by allowing technology to scale their operations seamlessly.
Insurers can harness the power 3 forces – hybrid cloud + intelligent process automation + AI/Machine learning for a fully digitized Zero touch Insurance operations. A fully digital operation means that the client specific insights (read data) will be owned by the insurer. This is a distinct shift from the traditional model where the relationship (ready client insights) was owned by Traditional Offline / Hybrid Channels like Agents, Brokers or Bancassurance. Once the insurer owns the data the possibilities become endless.
The employees in the organization will perform the role “humans” are best at – Being empathetic and supportive. Client interaction at every stage will be guided as per company standards and brand values. This is possible because the burden of repetitive transactions has been passed on to technology that is best suited for the job.
Insurers gain Sustained Competitive Advantage as they can provide “WOW experience” with First Time Right Processing (remember no scope of manual errors); personalized experience and product innovation with use of AI, deep learning, and NLP and finally the technology is scalable due to its inherent flexible Architecture. A Win-Win solution for people (customer + Employees) and the technology.
2. Secure with Absolute Customer Trsut – Prepare, Protect and Recover from Cyber Security Incidents
A zero trust approach for advanced protection from cyber threats and resolve top security challenges. We recommend to get started by aligning zero trust to your business initiatives. Map out your existing investments. Prioritize projects and integrations as you create a modern, open approach to zero trust security.
Every insurance company is in a race to digitize, and while this may sound like good news for the industry on the surface, there are many risks associated with digital transformation. With digitization comes lurking cyber security threats.
Hybrid cloud, multicloud, hyper automation and analytics can help your business grow, compete effectively and transform operations. But all the advantages of digitization require a modernized, reimagined focus on enterprise security — with an emphasis on a zero trust approach. Zero trust technologies and controls bring together context, collaboration and visibility. And those are just what you need to protect your growth and organizational transformation.
Another key aspect for your business success is the distributed workforce and the need to safely empower worker productivity. Your security model should allow work from anywhere on any device with secure access to necessary technology and information. Protecting this scattered ecosystem requires the correlation of real-time security context across all security domains. And that’s a job for zero trust.
IBM Security Zero Trust Acceleration Services is helping insurers simplify and progress in their transformation journey with actionable roadmap custom designed specifically for the evolving business model.
3. Scale with the power of the Ecosystem
A Zero touch Insurance operations that is based on the foundation of Zero trust Acceleration Services opens opportunities for building digitally modified business model. Partner led embedded Insurance has become a reality that was unimaginable earlier.
Zero touch operations gives insurers 3 strategic advantages
– First, they have built a scalable technology architecture.
– Secondly it overcomes the challenge of siloed systems build for individual function like underwriting, claims or policy servicing. Finally insurers will have a technology stack that is compatible with each other.
– And third, there will be a fundamental shift in the distribution model – from analog to digital.
The traditional distribution model is depended on a third party – agents, brokers, bancassurance or other people depended models. This means the relationship mainly lies with them. With digital operations the client data is with the insurer. This is where the magic begins to unfold. While the face of business can continue to be third party distribution channels, the Insurance owns and guides all interaction. Thus creating a tactical shift in customer engagement.
Digital operations provide a strategic advantage with their plug and play format. Thus enabling insurance to be an embedded experience on any partner platform. This idea can be attributed to what I call ‘deep linking’ which works by allowing users to access content from third party websites without actually leaving said website or portal.
For example, when browsing through a product on an ecommerce platform or reading a blog about interiors, deep linking provides additional information about product upgrade options, maintenance, it also suggests insurance to cover cost of these. Power of Data , AI and personalization have come together to create this unique experiences. Thus enabling insures to have customer insights that was never available to them. Insights when coupled with the power of hyper automation allows data to be accessible and flow seamlessly. Insurers can reimagine customer journeys and thereby deliver exceptional customer service. Deeper market insights help drive product innovation and personalization. This in turn improves top-line and bottom line.
Embedded insurance powered by a fully digitized Zero touch Insurance operations built on the foundation of powered hybrid cloud + intelligent process automation + AI/Machine learning is disrupting traditional understandings and practices in Insurance. Are you ready for this future.
The future of insurance is now