Siloed approach hinders digital transformation in insurance, execs say

Open chat tackles how insurers should change from the “old” to the new

Siloed approach hinders digital transformation in insurance, execs say

Insurance News

By Mina Martin

Many reports have documented the meteoric rise of technology and innovation in the insurance industry. Some IT and tech executives suggested, however, that some insurers don’t really understand digital transformation, and this is stifling innovation.

The issue was raised at an event hosted by the OmniChannel Media and Dynatrace which brought together 16 of Sydney’s leading IT and tech executives across insurance, including Dynatrace’s Janne Halonen and Medibank’s Marc Miller.

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In a recent “industry snapshot” report, KPMG said that now is the time for insurers to start running whole-of-business transformation efforts, as eight out of 10 emerging trends within the industry are digital-related, and as new products in the areas of driverless vehicles and telematics enter the market due to the emergence of insurtech.

What’s keeping insurance companies from taking an agile approach to digital transformation, however, are its old systems and processes, as well as the misconception that digital transformation simply meant “digitising” a process, TECHEXEC. reported.

Many insurers retain their traditional structure of department separation, which isolates their operations from one another. This becomes a transformation barrier because digital needs to be integrated company-wide, along with a forward-thinking culture, it was suggested.

“Not a single department can cope on its own,” Halonen said. “It’s not like driving an IT-driven agenda, or a business department-driven agenda. It needs to be the whole organisation.”

It was noted in the open chat that by breaking down the silos and encouraging a collaborative environment across the group, insurers can empower their departments to build an innovative and progressive ecosystem company-wide.

Another key challenge faced by insurers is how to engage their customers so they can maintain relevance in the digital age. One way this issue can be addressed is through the use of data and analytics to understand customer needs and expectations, and for selecting which disruptive technology to incorporate and use, the report said.

Miller clarified, however, that fresh initiatives should be driven not just by the technology, customer, or internal operations, but also by the benefits it will bring to the company.

“It’s not just technology, it’s how you drive the adoption,” Miller said. “What’s in it for the customer? What’s in it for the provider? What’s in it for us?”

Data and analytics, therefore, just provides the starting point for insurers, and what’s important is how the information will be used by the team, the executives agreed.

Once the trust and loyalty of consumers are achieved, the executives said insurers should not become complacent, and that they should maintain and improve this relationship through regular communication, a reliable online presence, and providing security for their information.

After all, technology can only go so far in catering to the needs of emotionally-driven humans throughout the insurance product cycle. Insurers should be able to implement a culture of change internally and externally, TECHEXEC. reported.

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