We have previously discussed the potential of digital transformation in insurance, through exploring the possibilities of artificial intelligence and embedded insurance solutions.

In this post we will outline some practical steps you can take to create a digital transformation strategy for your insurance business.

Making The Case For Digital Transformation in Insurance

In order for your digital transformation strategy to be a success, you will need buy-in from across your organisation. This means you will need to outline the benefits that digitisation can bring, while understanding the reservations some might have.

What Are The Risks of Digital Transformation in Insurance?

One major barrier you may encounter is a concern that digitising your operations may interrupt the flow of your daily operations. Even if you can sell your decision-makers on the many benefits of digitisation, they may still worry about a transition period. Will some customers get left behind as you make the switch to new systems or processes?

There may also be concerns about cybersecurity, as digitising your operations could create numerous new points of attack for cybercriminals. Plus, some may worry in general about AI – its reliability, its integrity, and the ethics of allowing machines to do work that was previously carried out by people. Finally, many will wonder whether an insurance business can effectively digitise while still complying with all relevant legislation and regulations.

You must prepare for all of these reservations, and more. Make it clear that digitisation is not an overnight process, and that spreading the process over a period of time will make it more manageable, sustainable, and scalable.

The Importance of Risk Assessments Through Digital Transformation

Also be sure to conduct a thorough risk assessment for every new digitisation strategy you consider. Not only will this help streamline the process, but it could also help assuage some of the concerns you may encounter from individuals across your business.

What Are The Benefits of Digital Transformation in Insurance?

The best way to get buy-in for your digital transformation strategy is through highlighting the benefits that digitalisation could bring to your business:

• Allow your customers to access your services and your products securely from any device anywhere in the world.
• Bridge the cover gap through enabling customers to purchase insurance as part of a wider transaction (e.g. getting travel insurance as an add-on when booking flights).
• Improving customer retention through improving the overall customer experience.
• Automate repetitive and time consuming tasks, such as filing and claims management.
• Instantly process huge datasets to get deep insights for more informed risk assessments and policy decisions.
• Automatically design, configure, test, and price insurance products to ensure you can always meet your customers’ needs at the best possible price.
• AI in insurance can also be used as part of the auditing process to automatically detect fraudulent behaviour.

The figures will back up your business case for digitisation. Studies from McKinsey revealed that digital insurers in the P&C sector tend to grow twice as fast as their less-digital competitors, while delivering significantly better profitability.

Steps to Building a Digital Transformation Strategy For Your Insurance Business

• Consider What Needs To Change. You will have to invest in new technology, but you may also need to invest in new talent to implement and manage the tech. Plus, you may need to invest in new training for your existing staff, to ensure they can get to grips with your new systems and processes.
• Plot Your Route to Digitisation. Some insurers choose to forge their own path when digitising. Though you may be able to expediate the process through partnering or acquiring third party developers. The approach you take will depend on your aims, your resources, and your timeframe.
• Understand Your Resource Needs. Once you know what you need to invest in when it comes to tech, talent, and training, you will have a better idea of how much time and money you need to invest in your digitisation.
• Develop Your Roadmap. Establish a timeframe for your digitisation. It should address all the investments you’ll need to make in people and systems, while also accounting for how your existing systems will adjust to new processes to ensure there are no serious disruptions to your operations.
• Stay on Course. Review your roadmap and your progress on key dates – at least every quarter. Track your progress, ensure you still have sufficient resources, and be prepared to course correct if need be.

We can Help You Offer Embedded Insurance Solutions to Your Customers or Employees

At Capacity Insights, we specialise in providing flexible and comprehensive healthcare and travel cover to businesses and companies for their customers or employees.

Get in touch to find out more and see how we can help you achieve your digital transformation strategy.