What side of the digital divide are you on? You’ll find the answer in the new ACORD/Genpact report, Assessing Digital Impact Across Insurer and Channel Operations, which offers insight into the traits that make up either a digital leader or a laggard. It turns out that the great majority of “digital leaders” are those companies that have successfully aligned the back and middle office with the front office.
Which are you? Are you a digital leader? … or laggard?
ACORD CEO Bill Pieroni introduced the report at the recent ACORD2016 Conference. Comprised of in-depth responses from ACORD member insurers, brokers, agencies and wholesalers, the report focuses on the connection between digitization and value creation, and the methodology behind digital maturity. It parses the organizational capabilities and attitudes that make the difference between insurers in the digital driver seat and those walking behind the caboose while watching it steadily move out of sight.
Few have achieved digital success yet, says the report. But of those that have reported strong returns on digital efforts, 81% identify themselves as having good middle/back office alignment to customer needs.
Supporting that finding from the other side of the table are the majority of respondents that felt they don’t reap the transformation value of digital. In fact, 77% said they cannot optimize end-to-end customer experiences that go beyond the web-enabled front end into the middle and back office.
Pieroni put the problem simply: “If you don’t digitize the value chain, you cannot meet expectations. How will you know your customer?”
What can be done if you are in the uncomfortable and digitally dissatisfied majority? What levers can you pull to accelerate your company’s capture of digital’s potential?
Digital transformation success calls for a customer-centered, integrated approach. For insurers, it entails a whole new level of integration between your sales, marketing, and core systems.
Insurers can find this approach outlined by industry analyst SMA in a recent research paper, Achieving the Ultimate 360° Insurance Experience: Gaining New Vison and New Value in the Digital Era, which provides a cogent description of what the integration of systems and data looks like for an optimized customer experience and a list of what technologies are required to achieve it.
Most insurers have a myriad of systems that make it difficult to effectively manage customer engagement processes and even more difficult to maintain the “all-important” context—customer information, needs and preferences—as the customer moves from one channel to another.
Ultimately, says SMA, insurers need a new customer engagement model that gives them the capabilities to manage the customer relationship with a holistic viewpoint.
Technology by itself is only one part of the equation. Recognizing this is another key trait of digital leaders identified by ACORD. This finding points to the importance of having a clear vision of digital success and knowing how to execute on digital initiatives, a capability that creates a gapping divide between leaders and laggards.
Leaders are clearly better at overcoming challenges and realizing ROI with 64% reporting that their design and implementation approach is effective at overcoming the challenges associated with upgrading legacy systems and processes, compared to only 18% of laggards.
Effective partnering is a particular challenge for laggards. Only 1% were able to say that their partners have a deep understanding of their legacy architecture and can design and implement effective digital technology solutions, compared to 65% of companies whose middle/back office support customer expectations.
Insurers are well on their way to embracing digital and the report indicates rapid acceleration to the goal in the next two years. If you get it right, there is a big payoff. Digital leaders say digital technology has had significant impact on their company’s revenue growth (91%), cost to serve (93%) and customer loyalty (70%). It will take a digital village of strong leadership, good technology and capable technology partners.