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If you’re leading the digital transformation charge in your insurance organization, you know all too well that there’s a veritable sea of technology vendors promising a sea change to your operations and business results. Why then, do so many digital transformation plans fail when they’re actually implemented, and fall short of gaining adoption, never to make the business impact insurers envisioned when investing in them?
Seventy-seven percent of CIOs ranked digital transformation as their top priority this past year. More than ever, this means scaling digitization across lines of business and employees so that insurance processes can be completed quicker and more efficiently. Insurers, brokers, and agents that can scale their data and processes compliantly to their customer-facing employees will be able to empower productivity, generate cost savings, and accelerate sales and claims processes for their customers—fetching meaningful return from their technology investments.
However, too many businesses today wait years to see the return, with 82 percent of CFOs saying they believe that they must wait 3-5 years to see ROI on their technology investment.
How can technology leaders in insurance more precisely assess the capabilities and impact they need from vendors and tech partners so that they can prioritize those that will be implemented and adopted successfully and deliver faster ROI?
Here are four practical considerations decision-makers should apply to qualify if a vendor or partner can truly deliver that digital transformation and business impact.
- Identify the Problem Standing in the Way of the Ultimate Objective
What are the most burning issues that are preventing your company from running forward with your business processes? Break down your most major hurdles to progress into problem categories. For example, many insurers today are struggling to meet these inter-related priorities when trying to accelerate their sales and claims processes:
- Verifying Customers’ ID
- Collecting binding signatures and completed forms
- Obtaining evidence or supporting documents
- Gaining consent on new or modified policy terms
- Fielding customer queries
- Transacting payments securely
- Enabling employees to carry out processes both in the office and remotely
- Ensure compliance
When considering a digital solution, it’s important first to clearly understand your problem and only then start looking for a solution that matches your needs. Will simply implementing an eSign solution or online payment system fix things for you? If your aim is to expedite the entire policy application process, is the provider you’re looking at able to complete all of the steps above? If not, will trying to integrate multiple vendor solutions to the trick or will you end up in a number of isolated, siloed solutions that are good by themselves but don’t integrate well, leaving space for inefficiencies, errors or poor adoption by your team members?
Remember, you’re only as strong or fast as your weakest link—these digital gaps don’t just create friction for customers, they add paperwork and admin tasks to employees which drain their productivity—and create technology debt that you’ll have to pay off in the future.
- Measure the Problem
To understand if a technology vendor can meet your needs, it’s important to have a clear understanding of your own metrics, what you seek to improve and what the impact the solution you are exploring can have. For example, if you’re looking to speed up turnaround times for customer claims, it’s critical to have overall averages of your current times as well as a breakdown of the time it takes to complete each link in the chain.
A recent survey of insurance professionals found 50 percent are still taking a minimum of one week to resolve customer claims. In order to improve this, insurers would need to examine what is slowing down the process and how it can be improved.
- Pick a Partner, Not a Vendor
One of the most common gripes you’ll hear from businesses? After they sign the SLA and once initial implementation with the vendor is completed, they are left high and dry with little or no support.
Knowing the difference between a vendor and partner is critical for insurers to reap meaningful long-term results from digital. A vendor will sell you a product and set of features. But a true partner will invest the time needed to understand your business needs long-term, how they can maximize the impact and grow together with you.
A technology partner takes on a consultancy approach, and looks at much more than just a set of target KPI improvements in isolation. This means looking at your current digital insurance processes and analyzing how innovation can make impacts to your data, operations and overhead in ways that can deliver efficiency, save costs and enable growth. For example, consulting with an innovation partner can help you pinpoint how implementing new technology can meet integrated priorities, such as:
- Making data agile and accessible to LoBs
- Digitizing sales and claims processes
- Enabling employee productivity be it from office, remote or hybrid
- Reducing operational costs and overhead
- Compliance
- Continuity of Business (CoB)
Collaborating with an innovative partner can help insurers and brokers intelligently and compliantly scale their data and operations across all touch points.
- Measure Time to ROI
Measuring KPI improvements of course is one set of criteria. Arguably even more important today is knowing how quickly your business can expect to see results from the investment.
A solution that requires heavy coding and constant maintenance, for example, delays your ability to see a return as it demands significant time and resources from your developers and IT staff.
Those costs and precious time can be a major competitive handicap when trying to digitize your insurance processes and match the Amazon-like experiences being offered by insurtech challengers.
Look at solutions that can be quickly integrated via APIs into your existing technology stack or, if you’re looking at upgrading your core, ensure that you can integrate future investments. This will result in not only faster implementation but ‘future-proof’ your stack as much as possible.
Final Thoughts
These tips can ensure that insurers and brokers can better identify the main problems impeding digital progress, measure how negatively it impacts efficiency, costs, and all factors that end up reflecting on sales and top business KPIs. With an accurate assessment of the problem, you can best understand the capabilities you need from a technology partner, and how together you can solve them in ways that meaningfully impact the bottom line.