In part one of this blog, we looked at the transformational changes insurers are facing and the need to build bridges between today’s world and the future. Now it’s time to look at “the hows” – How do you respond? … How do you set a call to build those bridges? … And how do you stay competitive in this new world?
SMA recommends that insurers plan to bridge to the future, building in capabilities that will achieve near-term goals for improvement, while moving toward a Next-Gen Insurer model. The following seven suggestions should be part of your bridging strategy:
Operationalize customer-centric strategies: Improving the customer experience has been the top strategic initiative for insurers in 2015 and 2016 and is sure to remain critical in the years to come. Emerging technologies and the increasingly connected world have a large impact on customer needs, behaviors and expectations. More than ever in this fast-moving age, listening to the customer and creating a customer-centric business will be key.
Modernize core platforms: Technology systems for rating, policy administration, billing and claims are the hub of every insurance company. Many a company has discovered that legacy systems in these areas stand in the way of implementing new business strategies and seizing market opportunities. Modernizing those core platforms is a great place to start in the quest to become a Next-Gen Insurer and position for a changing world.
See also: 4 Technology Trends to Watch for
Build a flexible organization and workforce: Technology and process don’t improve by themselves. New business models, new ideas and ways to capitalize on emerging trends and technologies come from an organization and the people who are able to change. Culture, organizational structure, new roles and agile technology infrastructures are required as part of a comprehensive strategy to build an organization that can quickly and willingly respond to changes in the environment.
Major in data and analytics: Every insurer needs to create an enterprise strategy to leverage their internal data assets and capitalize on more external data in the marketplace. At a minimum, the strategy should start with master data management and include a strong business intelligence foundation. Building skills and capabilities for more advanced analytics and big data should be on the road map, as well.
Institutionalize innovation: Innovation is not a passing fad. The creative rethinking of the business is a requirement for success in a world that is transforming. But institutionalizing innovation means going beyond thinking or imagining new ways to do business and extends into operationalizing those ideas.
Go digital: Most insurers have been on a digital journey for a long time, but in many cases it has been on a department-by-department, project-by-project basis. Now is the time to create a more comprehensive strategy to improve digital operations across all aspects of the business. There may still be a long way to go on this journey, but it is important to have an overarching strategy and framework.
Keep your finger on the pulse of the emerging trends and technologies: Not all emerging technologies will require the attention of every insurer. But each insurer should identify those with the most potential impact for their own company; develop a plan to monitor them; and invest, experiment and incorporate elements into the strategy over time.
SMA has created a Next-Gen Insurer framework that brings together all of these elements into a common vision to aid insurers as they prepare for future success. This framework has innovation at its core and includes four related elements:
- Creating a strategic plan that starts with customers
- Establishing capabilities to develop innovative products and services
- Adapting and capitalizing on technologies and data
- Implementing new and revised business models.
