It can be difficult to determine sometimes. We can not have everything. In life and in business, we face choices. It's kind of like owning a home that you want to rebuild. You can think of all the changes you want to make, but it is impractical to make them all at once. You have to live in space while it is in the midst of change. That means prioritizing. That means making some tough choices.
In the insurance area, most insurance companies are also in the middle of a dramatic rebuilding project. Some choices must be made. Some insurers would like to demolish one house and just build a new one next door. But it is just as impractical. Transformation efforts must focus on real improvements as operations continue. What changes will make a difference? Does it matter which order we choose when it comes to transformation projects?
Last week we started this series with a blog about strategies, plans and budgets. I invited two well-known industry experts ̵
Rob is the author of The End of Insurance as We Know It . Bryan wrote The Future of Insurance: From Disruption to Evolution . You can listen to the entire conversation in our webinar, Planning and Preparing for Tomorrow – Today: What You Need to Focus on for the Future of Insurance.
In part two of our conversation, we discussed areas where insurers need to accelerate. My questions to Rob and Bryan were these:
When insurance companies begin planning in 2021, what are the key areas for business and digital transformation that insurers need to accelerate?
Which areas are going to have priority, resources and some acceleration?
We started by painting a picture of revised time horizons. COVID-19 and its digital printing have reduced previous assumptions. Many project investments that were planned for a 3 to 5 year path for testing and implementation have now been moved to 18 months or less. When we look at specific tools, it's easy to see why. Most high-profile accelerations are due to the need for improved customer service in an environment where the service is in the midst of a radical change.
“We see a lot of digital enabling through the use of APIs. Insurers need to support a new generation of digital brokers and digital agents. Insurers ask themselves: “What kind of self-service tools do we put in? What communication tools do we offer people? What do we do on the injury side? "As an industry, we see the acceleration of communication, risk assessment and injury adaptation tools."
In fact, the types of tools desired are a source of acceleration measurement because most are specific. to its part of the value chain. This led our conversation to the idea of specific tool acceleration compared to business transformation. If transformation had once been seen as a concept for the whole company, it has now clearly shifted to a two-speed process, including both the whole company view – innovation speed to create the future business and the narrower operating speed to handle specific operational needs by function.
“Concept proofs are much easier to do today, especially with cloud-based tools. You can get started quickly. You do not have to do heavy integration to make it work. I see that carriers test things more and "play" on small but effective tools. Much of the "gaming" that took place in 2020 is now flowing into the budgeting for 2021 and adding it to production.
"The second major tool transformation is about data and analytics. Insurers are pulling out some of their (longer-range) projects by 2021 to get some AI or machine learning analytics tools to make better decisions.
" Of course, tools also involve We all work remotely. What tools, models and insights can we bring in that enable people to still grow and learn and do a better job with smart support? ”
"I think we see fewer 'moon shots' and much more 'must have'. The external scenarios and game changers that innovators like to dream about (like being the next Uber or Amazon) – many of these ideas are out the window
"Start with your efficiencies. You can get ROI within a year on reducing manual work with RPA or OCR technology. These technologies are getting much better and cost points are rising. Companies become more successful when it comes to distributing these with partners. Use some of these techniques to get quick profits.
“The second part is distribution. There are a plethora of digital agencies. The way insurance is bought and sold is radically changing. People do not want to go through the front door of a brick and mortar. Think about how you work with your current agencies as well as with the new players. Make your current offers very accessible and easy to integrate in a variety of formats.
Accelerating products among other priorities
With the increase in prioritization of initiatives, it makes sense to question the ability to launch new products. Although they should not be competing initiatives, an investment in new product development can in theory impair all other investments on the project list. Is there an intermediate road?
"Bringing innovative new products is the fun part, but many carriers delay new products. They are harder to stand up. It is more capital intensive.
“At the same time, there is a great need for new products. We see that there are exposures that are not covered and that there are groups of customers out there that are not properly served by the market.
"If you are in a strong position … If your processes are automated and streamlined … If your company is easy to integrate with and you have a strong distribution on your current offerings, I think this is a area where you can differentiate yourself from your competitors.You can bring new products to market at a time when you do not see much of it because of the economy. "
" One of the things I have seen in recent conferences are the growth of low / no code policies and product creation solutions.Where can they meet market gaps? What are the gigeconomic areas that are not covered in the way that exposure actually needs to be covered? with small and flexible core systems or side systems that connect back to the core to allow them to spin up the products.This method turns product development into a kind of laboratory to analyze where the economy will grow.  “This is not something that every wearer does, but it happens in the pockets and it is an interesting thing to watch. This may be where the next big product innovation comes from – system features that enable that laboratory for developing insurance products. "
New and innovative products
This is also where Majesco has seen a lot of activity, working with customers to quickly stand up products in a few weeks. Organizations are interested in getting their products to market on time. Across the industry, we see a demand for "on-demand" and "pay as you use" insurance. This speaks to the need for both digital service AND fast, prioritized product development.
The customer is in focus. Customers want to make sure you have a product that fits their risk profile and their risk needs at the right time. Whether it's parametric insurance or on-demand insurance, more and more people will ask, "Do I really want to pay for something I do not use all the time?" It's like the difference between cable TV, where you have to buy everything, and the TV services that stream what you want.
In many ways, on-demand insurance is the prototype for well-paired digital services / digital product offerings
“The early gig finance solutions were not viable. Carriers would discontinue and rewrite policies to approximate the on-off nature of the exposure. It is really expensive to do so, as opposed to turning it on and off or that a product is event specific. There is a lot of flexibility that comes with these new tools. This can unlock a completely different insurance market. These are the areas that can challenge our existence or they can be an opportunity for us. It all depends on how we engage with them.
Accelerates to face market threats
Between products and technologies and strategic priorities, most insurance companies find themselves returning to a concern: competition. We know how to respond to our traditional competitors, but what about the threats from non-traditional sources. Will any of our accelerating priorities match what they do?
“You see a lot of ink and the industry is pushing Lemonade, Root and Metromile. But (startups) have a big problem when it comes to distribution and they have a hard time drawing. They do not know about risk. Traditional insurance companies are experts in risks and they are much more likely to quickly put in the right formula. If you can be as agile as an InsurTech, you really have a big advantage. You know the market well. You can evaluate the risk profitably. Companies that get this right will be the ones that will start pulling in the next decade.
Investing in your priorities
Of course, acceleration and innovation require some investment. Insurers must go back and say "How do we invest in our own business?" Is there a better way to put our capital on the job than to accelerate our customer-focused product and service transformations? Can we turn this period of uncertainty into our greatest phase of innovation and preparation for the future?
In part three, we discuss what is required internally to become proficient at accelerated transformation. What are the obstacles that stand in the way of insurers? Is there a way for test teams to get purchases from entrenched stakeholders? Where will today's technology choices place us in the markets of the future?
To listen to answers to many of these questions, you can set up planning and preparations for tomorrow – today: What you need to focus on for the future of insurance.
The post Planning for your business and technical future: Where do insurers accelerate transformation? first appeared on Majesco.