Trying out instead of talking out: How insurers successfully develop digital customer interfaces
Many insurers are advancing their digitalisation. Decisive factors for their success are customer orientation, time-to-market, transparency and support from management, says Jan Webering, founder and CEO of Sevenval Technologies GmbH.
The race to catch up has begun: After initial hesitance, numerous assurances are forcefully pushing their digitalisation process by investing hundreds of millions. Yet, the calculation is simple for them: Whether whilst booking a trip, buying a book or streaming films and series — from many other areas of their lives, insurees in the meantime are used to communicating digitally with companies, making use of extensive online offers and even having influence on the development of new products and services. They are now increasingly transferring these expectations to their insurance providers. If their range of services/products does not fulfil their expectations, they check out the competitors.
This diminishing customer loyalty is both a curse and a blessing for companies in the insurance sector, for providers that manage to adapt their products as well as communication and sales channels to the wishes and needs of the customers can be a double winner. First of all, the higher degree of satisfaction ensures a closer customer tie of key accounts. In addition, the word is also quickly spread in times of social media and comparison sites and, in this way, helps insurers to win over new consumers willing to change.
Fast innovation cycles vs. slow development cycles
However, before this can happen, insurance providers must first succeed in their digital transformation. Irrespective of the amount of money they invest, they see themselves confronted with a greater challenge: The issue of speed. After all, customer demands are not only growing constantly, they are also in an incessant transformation process. In order to satisfy them, companies are forced to ever shorter innovation cycles.
Yet, it is not uncommon for these short innovation cycles to be accompanied by very long development cycles. Especially in larger companies with long-standing, outdated, complex IT landscapes and typically with full-capacity IT and specialist departments, the latter is frequently the rule with technology projects. The result: Solutions that were still perfectly suited to customer needs at the beginning of their development are too often long outdated and thus unusable before they even get onto the market.
As a long-term designed demand economy does not work across the board due to the dynamics of the market, the question is posed: How should a road map to being a digital company look? And: How can it be put into practice in a sensible way?
Based on our many years of experience and numerous projects for reputable clients, we have identified four key factors that decide over a successful digitalisation process:
- Radical customer orientation
- Fast time-to-market
- High transparency
- Strong support from the management
This famous sentence is accredited to the industrialist Henry Ford: “A customer can have a car painted any color he wants as long as it’s black.” These times have definitely passed. Today’s customers are demanding and knows what they want. Successful companies thus consciously place their focus on exactly that. This is the only way they can secure their position in the market, extend their lead over competitors, develop new business models and increase their profitability. In order to prevent the development of new solutions that ultimately pass by user needs, it is necessary to obtain feedback from them as early as possible and regularly. Manfred Knof, chairman of Allianz, explains:
“Start-ups are pushing themselves between us and the customers. They are forcing us to think radically from the customer’s point of view. We have to subordinate everything under the premise: Is the respective product a good solution for the customer and, in fact, not on any old computer but on a smart phone? This is the reason why we involve our customers in the product development process at an early stage.”
In contrast to backend systems oriented towards stability and process reliability, the frontend, i.e. the digital connection between companies and customers, very dynamic and generates constant new requirements. In order to satisfy these, companies require a technology with which the constant further development of the frontend is disconnected from the remaining IT infrastructure, as this is the only way that a fast time-to-market can be ensured for the implementation of new features.
A special “frontend layer” provides a solution to this: It leaves the safe, stable processes untouched in the background but provides them via APIs (interfaces) for a dynamic development at the frontend in a separate layout. This way, new concepts can also be tried out quickly and simply without them having to be talked out for ages beforehand.
The development of new solutions in straightforward phases with accompanying user tests, however, also offers further advantages. Not only does it prevent time-consuming and costly undesirable developments and thus minimise financial risks, above all, it ensures transparency. Experience shows: To overcome silo thinking in companies and to win over decision-makers, it is necessary to demonstrate initial concrete successes and to be able to test them. Initially, middle management can be called and involved by way of regular communication about the progress; the same, however, applies to all other members of staff in the company. In addition, other departments can benefit from the experiences gained, so that even mistakes in the development of a product do not necessarily have to be considered negatively. Of course, it also motivates the staff in the project to be able to point out concrete successes.
Support from the management
Even for those responsible in c-level management, it is much easier to argue the reason for further resources to be made accessible for a certain project if they already have something to show. However, for it to come that far, a company culture is required for the time being that enables the agile development of new solutions. In the insurance sector in particular, which has acted for decades in silos and very long periods, an approach based on the trial-and-error principle requires fundamental rethinking. For the development paradigm to get a firm footing, those responsible in management have to serve as sign spinners and, for example, ensure that fast decisions are possible and that an esteemed dealing with a culture of fault tolerance prevails across all departments. As with every other complex problem, digitalisation is also top priority and doomed to fail without unconditional support from the top. If it is not to inevitably get stuck in uncoordinated individual projects, it must be exemplified. The same goes for the old business wisdom that the customer is king and that they can only be committed in the long run by appropriate treatment.
By the way, Henry Ford also arrived at this insight. Because people don’t always want to look on the dark side, his legendary “Model T” was already available more than a century ago in green, red, blue and grey — and not only in black.
Further information about the author:
Jan Webering (*1968) is the founder and managing director of Sevenval Technologies GmbH. The Cologne based company has been developing and implementing sector-specific frontend solutions with their own technology and UX competence since 1999. In doing so, Sevenval enables the trouble-free compatibility with existing IT system landscapes and, at the same time, offers the end users an optimal user experience. Besides his position as the managing director of Sevenval Technologies GmbH, Jan is a member of the supervisory board of other companies, partner of the private equity company Berlin Technologie Holding GmbH and he appears as a speaker at symposia such as the “Mobile World Congress” or the “Internet World”.
Also, read Jan’s article “Insurers: Upgrade digitally or disappear” right here on Medium (7 minutes read).