The Age of Engagement: Understanding the Insurance Industry’s Digital Future

By assessing digital maturity across your organization, you can determine which areas need improvement, prioritize the areas you want to digitize first, and start developing an end-to-end digital transformation plan.

(Editor’s Note: This article is Part I of a series.)

Consumers today rely on digital technology to manage their personal lives with speed and efficiency. It’s a trend that has forced the insurance industry to take a hard look at traditional methods of customer engagement, risk mitigation and coverage. To stay competitive, new business models must include holistic digital strategies that are supremely customer-centric and highly collaborative. Call it the age of engagement, with insurers working to leverage new technologies to improve operational processes, provide mobile access to products and services, and create greater value through personalized customer engagements and experiences. At the same time, an overwhelming majority of life and P&C insurers—70 percent—lack the confidence to execute complete digital transformation because they feel they don’t have an achievable plan. Understanding critical elements such as compliance and risk processes will help define a clear vision and a prioritized path forward.

Digital transformation as a competitive need

With strategic capital investments in digitization, tangible business benefits can include increased customer acquisition and retention, new sales and cross-selling opportunities, and reduced servicing costs and claims payouts. In this new world, outdated legacy systems of record simply aren’t sustainable as they exist today. Automated systems must instead help your organization reduce costs and streamline business processes with measurable outcomes, while intuitive software enables smart machines to interact with your employees to provide extended “team member” support. This new digital future heralds the use of data—both internal and public—to accurately assess risk per individual customer or business. For insurers, it offers an unprecedented opportunity to manage the risks inherent in new technology innovations and capitalize on them—giving your company a competitive edge and a clear path to higher growth. By embracing intelligent processes that are flexible, automatic, fast, and consistent, particular advantage can be gained in the initial customer interaction, or the first mile of business.  These are the information-intensive interactions that create or destroy business value, such as policy renewal or claims handling.

The competitive landscape favors insurers with digitally integrated channels and systems. Empowered to compete with both traditional carriers as well as non-traditional distributors, these digital platforms provide enhanced levels of engagement, customer experience and rapid response times that create a competitive edge. In terms of costs, the data is clear: measurable cost savings and efficiency gains occur when insurers adopt digital operating models. Less manual effort translates into error reduction, lower redundancy in data and document verification, and fewer full-time employees (FTEs). Lastly, digital processing and automation allows insurers to incorporate business rules and use data sources to ensure regulatory compliance. In all cases, digital processing provides the visibility and audit trail needed for reference in the event of an audit or suspicious activity.

Assessing digital maturity for smart transformation

But these new realities beg the question, where do you begin in defining digital transformation for your company and clients? By assessing digital maturity across your organization, you can determine which areas need improvement, prioritize the areas you want to digitize first and start developing an end-to-end digital transformation plan. With exploration, it becomes clear that processes for each line of business can vary widely with respect to the amount of investment in digital capabilities and thus, digital maturity. Use a process maturity model (see Figure 1, below) to help measure digital maturity and establish your priorities.

Putting digital transformation in context

The maturity model demonstrates that to remain efficient and competitive, insurance innovators must capitalize on digital transformation to fundamentally reshape the way they do business. For example, claims examiners, underwriters, and knowledge workers navigate multiple decision points throughout the lifecycle of an insurance policy, working to make informed decisions based on accurate data. Yet the information driving these decisions is often scattered among multiple internal and external systems, databases, and websites. Hunting for information from these sources takes time, increases costs, and adds complexity to business operations. Technology advances such as robotic process automation (RPA) are addressing this challenge—if your processes require a human resource to access, search, and gather data from internal or external sources, RPA’s software robots can do it instead. This intelligent software mimics user actions to interact with enterprise applications, websites, portals and other data sources, allowing your team to focus on more strategic activities.

RPA is just one element of digital transformation, and it radically changes how customers, employees, partners, and others work together in critical business processes. These smart robots enhance the customer experience by improving processes, automating the entry or retrieval of information from any system, including applying sophisticated business logic to transform data, handling exceptions, and automating decision making for a competitive advantage.

Creating a digital transformation strategy

Focusing solely on the front office customer experience will result in missed opportunities to enhance the customer journey, reduce costs, fend off competition and maintain compliance. Ideally, the entire process is digitized, from initial customer engagement all the way through policy maintenance and claims processing. Look for the next installment in our series, where we will walk through specific steps to help guide insurers in redesigning and transforming key business processes.

Kofax Process Maturity Chart Darren Collins

Figure 1: The Process Maturity Model is helpful for assessing your organization’s current digital state, again using the four core business functions and five-step process within each function. The boxes to the right of the five steps represent insurance tasks that can be measured against a continuum ranging from Not Digital to Extreme Digital. Moving from manual to full digital means:

  1. Reducing paper
  2. Automating processes
  3. Adding and connecting digital channels (mobile, online, email, social media, etc.)
  4. Engaging the customer in self-service and proactive, personalized communications interchange
  5. Integrating data between insurance systems and external sources
  6. Automating regulatory compliance and audit trails
  7. Analyzing processes to determine “what happened”, anticipate “what could happen” and “what should be done


Darren Collins // Darren Collins has over 20 years of experience in the financial services sector. Through transformational strategies, he has enabled organizations to increase their responsiveness to customers, provide better customer service, gain a competitive advantage and better grow their businesses while reducing operating costs. At Kofax, Darren is responsible for the Global Industry Team, driving the strategy and providing thought leadership to global organizations in banking and insurance. The team assists organizations by mapping technical solutions to key business problems to achieve strategic objectives.

Comments (2)

  1. Another thought popped as I hit submit! Where do you see the paper “choke” still happening New Business to Claims – Consumer and Commercial Lines, facing structured docs/data? Unstructured docs/data?

  2. Hi Darren – Enjoyed your series, thanks! I’m an independent IT commercialization GTM / launch hybrid resource, passionate about helping the rest of the market catch up to P&C’s migration pace. Question – what digital migration “light” can you also shed for current/future state paces of Life App-to-Issue & Policy Management, and as well as for Commercial Lines?

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