Are insurance digital teams ready for mobile?

On October 26th, I am moderating a roundtable at the Guidewire Connections conference in San Francisco. The roundtable topic is “Is your digital team ready for mobile”, and is focused on the strategies that insurers can use to match their capabilities with customer digital expectations. The idea of digital insurance is not new, but has gained considerable traction in the last few years. Almost all insurers have started digital projects, many have digital teams, but only a few have a true digital insurance strategy.

In order to develop a coherent strategy for digital insurance, first an insurer must decide what the term means. In my opinion, there is a distinction between insurance digitalization and true digital business. Digitalization consists of taking existing processes, procedures and services and using technology to improve efficiency and effectiveness. Fundamentally digitalization takes what an insurer is doing already, and applies digital. In this circumstance, there is no fundamental transformation of the business. Digitalization is critical in a price-sensitive, highly competitive industry, but is not enough to distinguish an insurer from the competition. In the context of insurance, true digital business requires the application of technology offer new business values or move the insurer to a new position in the market.

Many different methods exist to evaluate digital business maturity. I prefer to use a five stage model. The first stage is digitalization, taking existing processes and applying technology. The second stage is to create new digital experiences. An example of this stage is creating agents and employee mobile applications to improve interactions with the company. Stage three is offering new digital products. One good example of this stage is a company creating a new travel insurance product, partnering with a travel mobile application, and offering that product at the time a customer purchases a flight. Stage four is a further evolution of stage three, and consists of embedding digital throughout the enterprise. In this stage, an insurer thinks of all aspects of the business in terms of digital, even in departments such as compliance and daily operations. In stage five, an insurer has moved to an entirely new position in the insurance market. We are only now beginning to see a few stage five insurers, and these insurers are often born digital. An example of this is new peer-to-peer insurance models that have begun to gain acceptance in recent years.

The first step in transforming into a digital insurer requires evaluating where your company is on this continuum, and where you need to be in the next 3–5 years. Eventually all insurers will be digital insurers, but I believe that this transformation will move in fits and starts, with the leaders gradually pulling out ahead of the laggards and gaining the majority of the available profits.

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