Insurers would do well to avoid getting caught up in all the hype surrounding digitalisation. There really is no one size fits all approach to embrace this. Much of the process when it comes to developing an effective digital transformation roadmap comes down to strategically aligning the insurer with its business goals. Once that is done, the practical elements of how it could technically work, will help guide the steps to take.
Of course, the risk of having sight of the ‘big picture’ view of what the company is working towards can result in the temptation of trying to do everything all at once. This is not only a costly exercise, but the complexity involved in doing so makes it an incredibly risky proposition. Instead, decision-makers at the insurer must break down the components into smaller steps. By doing so, they can implement faster and derive value from the digital transformation roadmap sooner.
Even with the best planning in place, digitalisation can mean one thing today and something else in the future. Just consider the technologies shaping business in the current environment. The digital landscape could (and most likely will) look significantly different in two years’ time. Therefore, it becomes paramount to embed a degree of flexibility into any plan. By taking a step-by-step approach, the insurer can re-evaluate often and ensure future steps are still relevant when the time comes.
Decision-makers must also communicate with employees across the value chain so that they can understand the ultimate goals the insurer will be working towards. This could entail a continuous process of alignment from all the stakeholders. Again, it shows the value of taking smaller, iterative steps as opposed to just having a single, long-term plan that is cast in stone.
The COVID-19 pandemic has certainly helped in this regard. Insurers understand the need to be more agile. The cycles of technology advancement are accelerating all the time. And with this comes the need to embrace more digital channels than before.
Balancing the past with the future
In South Africa, this does require a more nuanced approach given the digital divide that exists between early adopters and those still struggling with even basic internet connectivity. However, if an insurer uses technology in the right way, it can cater for both segments.
For instance, the more affluent market wants to have self-service channels to manage their policies without having to deal with a broker. They want a direct channel with the insurer providing a click-through on its Web site for more information, link to a customer portal, or to apply for a policy. This type of customer might even want to make changes to his already existing policy portfolio through some sort of direct digital engagement with his insurer.
The less connected customers, some who are even unbanked, require a different approach. In this instance, an insurer can equip its brokers with tablets or mobile phones to facilitate an onboarding process when they travel to informal settlements. This also gives the broker the opportunity to educate potential customers around the importance of insurance, resulting in an improved and more personal service experience.
Furthermore, the way insurers collect and pay out premiums to the unbanked can take the form of mobile wallets or other mobile-friendly transactions. This also ensures that people have cover and that claims can be processed as efficiently as possible.
Join me next month as I discuss some of the key considerations when it comes to digital transformation in insurance and how that influences the roadmap planning.