The insurance industry has experienced many changes in recent years. It is evident that the sector will become digital because of ever-changing customer needs. Disruption is about almost all lines of the insurance business. Each insurance product will likely be bought via digital channels like a mobile app, web portal, or chatbot. For example, people find it easier to choose auto insurance through their mobile phones than going to the physical office.
The importance of creating a digital transformation strategy and the values it can bring is obvious: more customers buying insurance products and services by digital means, fewer people calling a call center, lower operational costs, more satisfied consumers, etc. Therefore, most insurers understand the importance of digital transformation and see how it can change their business. At the same time, executives are considering risks, the long transformation process, and other pressing issues like regulatory compliance that seem more crucial now. So, to step on this long and complicated path, CEOs and other executives should know how to appropriately develop a digital transformation strategy.
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Before proceeding to the guide, let’s see what digital transformation in the insurance industry is and which of the most important innovations accompany digitalization today. So, the digital transformation in insurance suggests a combination of organizational, cultural, and operational changes through integrating digital processes, technologies, and expertise.
Speaking about the insurance digital transformation trends, we can highlight the following: big data, artificial intelligence, the Internet of Things, and cloud computing. Each technology can be successfully applied in the insurance sector and bring certain benefits.
The use of new technologies is a significant competitive advantage and opportunity to enter a new market or conquer more targeted customers for insurers. Here’s a list of the most vivid benefits of embracing the change:
To gain these advantages, insurance companies rely on high-tech vendors experienced in creating digital transformation strategies, considering the current maturity of IT and readiness to change inside the organization.
This guide will teach you the essentials of developing a digital transformation strategy. The guidance looks like a set of digital transformation steps you should take to ensure success at the end of this exciting journey.
Assessing just the IT systems and technologies your insurance company has is not enough. Your first step in adopting digital transformation is obtaining a helicopter view of your business. The top priority is understanding how your customers’ journey relates to business processes.
Before defining the goal of the transformation project, you should identify all the pain points and inefficiencies your employees and customers face. For example, you can see that your clients complain about the long time they are waiting for an answer to their question from the call center consultant. That worsens the client’s attitude to the company and reduces overall customer loyalty.
To identify all the pain points, customer and employee interviews should be conducted. Such an activity is a part of the discovery phase we do. Usually, CX researchers are responsible for the interviews. They speak with real insurance consumers and identify their challenges while communicating with the company. So, you can see what difficulties your customers experience now. Understanding these problems, you will be ready to search for the right ways to solve them.
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While exploring how well your processes are aligned with user experience, you will better envision the desired outcomes. After the discovery phase, you will be able to set objectives for digital transformation clearly. Among the most vivid examples of digital transformation goals are increasing revenue, entering new markets faster, improving employee productivity, and enhancing customer engagement.
Key stakeholders should be involved in the process. Communicate the benefits of digital transformation to them. For example, suppose you explain that cutting the time it takes to submit a claim from 60 minutes to 30 minutes can improve customer loyalty. In that case, the stakeholders will more eagerly participate in the project, share their knowledge, and discuss the opportunities.
Building a cross-functional team is also instrumental in engaging executives to do digital transformation. People from different departments should come together to work towards a common goal and project. In the insurance company, these may be the Sales and Marketing Department and the Customer Support departments, for instance. They can share what should be done to improve the efficiency of the sales process on both sides: the customers and the insurers.
Evaluating current technology infrastructure for an insurance company may become daunting if it lacks in-house IT specialists. Thus, finding a reliable digital transformation partner is essential. They will help you identify gaps and opportunities for improvement as well as recommend the right technology for bridging those gaps.
For example, one of our clients, the insurance company UNIQA, contacted us to inspect to understand why most customers don’t use their mobile app. We had to do a business analysis and explore the root causes. We also had to conduct a comprehensive technology audit as the company has many software products to integrate a mobile app.
Read a complete case study:Discovery phase for the insurance company
An experienced software vendor will also prioritize all the initiatives and work to be done. After the audit, you will get a Work Breakdown Structure (the document which describes how the work will be divided into smaller parts), recommendations on resource allocation (team composition or, simply put, people required to design, develop, test, and implement the software), and cost estimation.
Defining a roadmap for the digital transformation journey is also the responsibility of your trusted software vendor. They know and apply the best practices to establish milestones and timelines as well as assign responsibilities and roles. Professional tech specialists will select the right designers, developers, and test engineers to complete your project.
Who else is needed to manage the project?Read why developers need a Project Manager.
Usually, executing the plan is done in a phased approach. Today, software development companies and digital transformation accelerators use the Agile approach. It allows for iterative development—Agile teams work in short iterations or sprints that typically last 1-4 weeks. Each iteration involves a complete cycle of planning, designing, coding, testing, and delivering a working software component.
Other important aspects of this step include monitoring progress achieved using tracking key performance indicators and regular reviews.
DICEUS guides insurance companies from legacy operations to digital transformation. We focus on identifying customer challenges and defining the best ways to tackle those with technologies. In most cases, digitization means shifting from traditional cumbersome workflows to simplified automated underwriting, product development, claim management, etc. To demonstrate our expertise, please check the following examples of our work and some valuable insights:
Insurance companies on a digital transformation path will surely meet challenges. We at DICEUS will gladly guide you through this exciting journey by applying our expertise. Our top talents will help you discover the issues, find the solutions, and choose the right technology stack for the project. Contact us for a free consultation and a digital transformation roadmap.
Digital modernization of insurance suggests the readiness of insurance companies to embrace the change and meet modern customer expectations by implementing digital technologies at each level. It is a complex combination of operational, organizational, and cultural changes where technology plays a crucial role.
Usually, the strategy will depend on business goals, the current state of the IT landscape, and the findings of the discovery phase, which is recommended to start with. Depending on the factors mentioned above, a digital transformation vendor will tell you the things you should focus on first. For example, if your mobile app is a legacy one and provides information only without providing users with any self-service features, the vendor will recommend you start to upgrade the app.
Insurtechs succeeded in providing customers with fast, convenient, and reliable services, which gives them a considerable competitive advantage. They offer user-friendly ways of submitting claims, shorter cycles of claim processing and settlement, convenient tools for self-service, and many other things that incumbents are just considering. The success of insurtech encourages insurance businesses not to lag behind and rethink their digital strategies.
The sector faces lots of challenges that can be addressed with the help of digital transformation services for insurance. Among the most pressing issues are the inability to respond to changing customer needs in a timely manner, lack of IT expertise to implement new technologies, redundant and manual tasks that could be automated, increased operational costs, etc. All these can be improved with the right digital modernization strategy.
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