It’s scary and it’s not secure, but digital transformation has become a necessity for companies who want to remain relevant to their evolving markets.
As insurers undertake digital transformation, two experts outline a few must-haves in order to effectively steer firms through the tricky path of digitization.
McKinsey senior partner Tanguy Catlin and partner Julie Goran noted in the report “Building Momentum for Cultural Change” that insurers need to put “the customer’s point of view among their top considerations.”
The authors emphasized that as insurers evolve their products and services to keep up with technology, they should always be asking: “How does this create value for the customer?”
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Collaboration was also cited as a key element in managing the change that emerges from digital transformation.
“Collaboration is key, not only because it improves customer understanding and decision making, but also because it does so quickly,” the authors note. They cite their research which says that more than 70% of insurers take six months to a year to go through the process of digital conceptualization to implementation.
They quote Scott Simony, Google head of industry, as saying: “Insurance is a highly regulated industry and it is not easy to move quickly—but the fact is consumers are moving at exceptional rates. So I’d say that the companies that will stand out are the ones that are going to find ways to move a bit faster, at the pace of the people they’re ensuring.”
While insurance is all about risk management, Catlin and Goran write that insurance should be a little bolder in taking the plunge as it adopts technology.
“Concern over costs of failure can be minimized by the use of the test-and-learn approach,” they said.
The cited United Services Automobile Association, a US insurer, which tests 8,000 ideas each year, generating around 250 patents from them.
“…A culture that understands the value of calculated risk-taking is one that also accepts failure, and learns from set-backs. Some organizations openly celebrate the lessons learned in order to encourage their employees to take risks,” they emphasized.
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