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Keeping Up Momentum of Digital Transformation

The need for continuous progress

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    In this piece, Darren Dempsey, Chief Cloud Architect at Munich Re Automation Solutions, discusses how insurers can maintain momentum in digitalising insurance processes.

    Digital transformation for insurance organisations is now table stakes − global insurers are increasingly accepting this reality. Those who fail to adapt or adapt too slowly risk being left behind. 

    That said, leaders and stakeholders are understandably wary of taking dramatic steps toward digitalisation, which can seem at the outset overwhelming, disruptive, and risky. And digitalisation can mean very different approaches based on goals, business model and organisational size. Then there is organisational agility, cultural readiness for change and the ability to mobilise internal resources to deliver solutions.

    Organisations can make fast but incremental changes to keep up the momentum of digital transformation – it can be a marathon, but composed of smaller, winning sprints.

    Risk awareness

    It isn’t enough to paint objectives in such broad strokes as operational efficiency, data-driven insights, cost reduction and improved customer experience (CX). Start by clearly articulating and evaluating your goals. Why are you undertaking digitalisation initiatives? Are your objectives measurable? What does success look like?

    Strategic priorities could be client-centric, such as improving CX, reducing friction, and digitally delighting customers to increase sales, enhance loyalty and reduce churn. Maybe your goal is process- and timeline-specific: reduce underwriting time from six weeks to two days by digitalising point of sale (PoS), accelerating application time and increasing straight-through processing (STP).

    Expertly deployed, digitalisation can achieve any of the above outcomes quickly, measurably, and unambiguously. 

    Accelerate digital transformation through partnership

    Insurers often express reticence toward adoption of software-as-a-service (SaaS) solutions and explore options to build internally, citing perceptions that standardised SaaS could limit flexibility and control over future developments. Sensitivity increases the closer the solutions are to client-facing interactions such as distribution, customer service and PoS. Yet the in-house expertise required to build such sophisticated technology rarely exists in insurance organisations. Investment in infrastructure, development, maintenance, optimisation and continuous operations can be cost prohibitive.

    Partnering with a proven, experienced, expert digital solutions provider can enable organisations to deploy quickly, host solutions in the cloud, and reconfigure and upgrade smoothly. Partnerships are often subscription based, making them easily scaled up or down.

    The most advanced SaaS solutions are customisable − easily integrated with existing processes, business models and regulatory requirements − and expert partners can manage these transitions, augmenting your business and eliminating adoption pain points.

    Great SaaS platforms can help insurers quickly ramp up access to behavioural and predictive insights through artificial intelligence (AI) and machine learning, empowering you to harness data analytics without in-house development. Customer relationship management (CRM) is a stable SaaS with many well established vendors, helping insurers to enhance CX, and personalise services and communications.



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    A culture of innovation and adaptability: how ready is your business?

    Before undertaking any digitalisation program, organisations should conduct a full assessment of future-readiness. How adaptable is your business to technology adoption? What is the current quality of your data? How scalable are the systems under consideration? What are the cadences and potential operational impact of update cycles? What partnerships and outsourcing will you need to augment current resources?

    It’s also critical to conduct comprehensive cultural diagnostics. How prepared are your internal teams to embrace emerging technologies and execute change management in the least disruptive, most productive methods across the organisation? Cultivating a culture of innovation and adaptability is not a one-size-fits-all proposition, and it requires systemic collaboration among leaders and other internal stakeholders. Often that collaboration alone poses a cultural challenge, especially in traditionally siloed organisations.

    SaaS partnership can provide additional expert “boots on the ground” to educate, ease transitions, and upskill existing and incoming talent.

    Risk, compliance, and security: partnership concerns

    More urgent digitalisation objectives are often risk mitigation, compliance and security improvements. This is a paradox, as these considerations are of great concern to insurers who are contemplating partnership, especially around cloud migration.

    The best SaaS partners, which can provide both on-site and cloud solutions, invest heavily in continuous security and compliance improvements to ensure the protection and anonymity of sensitive customer data.

    You should expect your SaaS partner to manage regulatory compliance, data security, system performance, resilience, disaster recovery and back-ups. Additionally, they should undergo System and Organization Controls (SOC 2) audits, in addition to ISO 27001, HIPAA and other certifications at least annually to ensure the confidentiality, integrity and availability (CIA) of your data.

    Human-digital partnership in underwriting: embracing emerging technologies

    Underwriting innovation remains the top industry organisational priority. By automating processes and augmenting human expertise with AI, insurers can achieve more with current human underwriting resources. Customisable tools can eliminate inefficiencies and errors so you can gain control over workflows and focus human expertise on complex underwriting challenges.

    As it’s increasingly difficult to hire and retain experienced underwriters, digital solutions can help to train and upskill incoming talent while supporting more experienced underwriters. Certainly, by automating some decision-making through AI, you can optimise the work people currently do, increase sales, and accelerate outcomes such as STP, without the need to hire additional underwriting talent.

    Additionally, continuously updated applications and partnerships that provide dedicated digital teams can decrease dependency on internal IT.

    It's an evolution and a revolution: measuring success and adapting for optimal business growth

    Digitalising insurance business models is about continuous progress, which requires iterative cycles − release, inspect, adapt − so you can refine and enhance products and services based on real-world feedback and evolving markets.

    Instead of digitalisation as a massive undertaking or dramatic transformational journey, insurance organisations of all shapes and sizes should embrace the need for continuous progress and identify strategic opportunities for digital partnerships.

    Once you’ve assessed and improved operational readiness, you can initiate change communications, align on outcomes, and seek step-by-step digital solutions to optimise your business for next generation insurance. 

    July 2024 ebook: AI transformation in insurance underwriting

    Improve risk prediction accuracy, gauge intent, identify cross-selling opportunities and delight users.

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