3 Ways You Can Accelerate Digital Transformation of Insurance
Since the COVID-19 outbreak took place, it is reported that there are over 2 million confirmed cases and over 130K deaths worldwide (at the time of writing). Experts say that the size of the impact on the global economy over 2020–2021 will be as big as $9 trillion.
This is having a profound impact on the insurance industry. We at DIG have observed direct and immediate impacts on our clients of global insurers and bancassurers. Being in the centre of the global health and economic systems, the insurance industry is under high pressure and faced with overwhelming challenges.
As the lockdown measure takes place globally and people are seeking for aid from insurance providers, insurers and bancassurers are challenged to speed up the digitisation of insurance — more specifically, making a digital transformation faster, easier and at a lower cost.
Our team at DIG put our heads together on how we can help our clients during this crisis. The best way we can contribute is enabling you to transform digitally in the nimblest way by providing flexible, quick and easy-to-implement solutions. This means we can resolve some of your biggest pains: enabling you to put back your distribution capability on track via digital sales tools, unburden your operational workforce by self-service portals, and keep your customers feel engaged with a user-friendly online experience.
With that in mind, we’ve launched our first blog series Digest COVID-19 in our Resource Hub to share knowledge and help you navigate through this challenging time. To start off this series, we’d like to guide you on how you can make a digital transformation that matches best with your situation and business.
First-Step First: Do Your Analysis
Before thinking about how you can initiate digitisation, the first step is to have a quick 3-step analysis on your situation, priorities and strategies. These steps are comprised of the following:
1. Evaluate where digitisation is the most urgently needed in your business line(s) and value chains — both in a short- and longer-term perspective.
2. Examine what the problem is and what kind of solutions can solve this issue in terms of a clear vision on product, timeline and budget.
3. Assess the feasibility by evaluating the capability of your IT system.
3 Modes To Accelerate Your Digital Transformation
If you have a clear stance based on this analysis, it’s time to determine how you can achieve a digital transformation that suits your need and situation the most. There are three ways you can choose: 1) front-end solution, 2) middleware solution and 3) ‘flexible’ end-to-end solution.
Front-End Solution
You can consider an API-based front-end solution if:
- You need a digital proposition(s) with the quickest time-to-market speed
- Your IT system supports immediate API integrations with front-end platforms
This approach of developing front-end platforms on top of your existing IT system will allow you to develop digital propositions of your needs in the shortest timeframe among the three modes. White label solutions are applied here.
Front-End + Middleware Solution
The second approach to speed up your digital transformation is enabling front-end propositions through a middleware solution. This might be the most viable and optimal solution for most who struggle with the limitations of their current IT legacy, especially in this extremely time- & budget-sensitive situation due to COVID-19. This option is suitable for you, if:
- Your IT system is too complicated to build flexible API-based propositions on top of it
- Your IT system is not robust enough to support fast data processing with front-end systems
- You have front-end capabilities in-house but lack capabilities to develop middle layer internally
This approach will allow you to overcome your legacy limitations in the shortest amount of time at relatively low costs, build digital platforms in the most flexible way without revamping the whole legacy, and easily scale the propositions across other business lines or regions in the later stage.
There are two possibilities to implement this solution:
- If your IT system allows API integration, you can implement a ‘thin’ layer of middleware which can simply connect with the back-end system and communicate to the front-end in real-time.
- Otherwise, you can implement a ‘thick’ middle layer which still connects the back-end and the front-end, but the data processing between the middle-layer and the back-end is done in batch, e.g. once a day. It means that pricing tables and product models are part of this middle-layer, which makes it more intelligent and ‘thick’.
‘Flexible’ End-To-End Solution
If you’re in the midst of renovating the whole IT architecture, you may want to continue considering the time and investment already made. The solution here is to temporarily shift your focus and take a flexible approach to develop front-end solutions in parallel where you need a digital boost the most. In short, consider this option if:
- You are already in the process of adopting an end-to-end solution
- Your IT system does not support API integrations
A Lean Way of Digitisation
When there is such a high pressure to keep your business sane in an extreme situation like this, you’re forced to focus on solving immediate issues. According to a survey from McKinsey during a webinar about the COVID-19 implications on insurers, 65% of the respondents said their focus is on stabilising the current challenges rather than long-term planning.
The important thing here is ‘how’ you adapt to the situation. Adapting flexibly is the ultimate key to overcome the situation and become a better insurer and a stronger organisation during and after the COVID-19 crisis.
Change is hard. But the challenges we face are even harder. A lean way of digitisation can unburden your current problems and enable you to overcome the crisis most efficiently and effectively.
Looking for help on accelerating digital transformation? Get in touch here.
