Insurance Companies, Here’s How to Ensure Success with Your Digital Transformation Initiative

For all the talk of digital transformation in the insurance industry, it remains difficult for established companies to determine which functions to focus on and what to transform them into. It’s clear the bar is getting higher, as new all-digital competitors (as well as some established companies) launch sleek apps and announce new processes driven by artificial intelligence and other cutting-edge technology. But the majority of industry veterans have bitter memories of past efforts to reengineer their firms’ sprawling operations, typically with limited success (at best).

Is there any reason to expect the latest efforts at digital transformation will work better? The short answer is yes, but only if companies choose technologies that have matured beyond demo stage and deploy them strategically in areas where they will have the most impact.

Here are five useful maxims for achieving meaningful change and lasting success:

Invest in a workhorse—not a show pony. Beware of products that make for flashy demos, e.g., conversing with customers through chatbots or voice assistants. This kind of tech may grab attention, but it does nothing to change the way the vast majority of the work is done. Even worse, they often integrate poorly (or not at all) with the backend operations that power a business, creating potential errors and other causes for delay that will disappoint early adopters and arm internal naysayers with arguments for maintaining the status quo. You – and your organization – will do better by focusing on fixing processes that involve the bulk of the way business is done.

Don’t be afraid to revisit old failures. Most established companies have tried to extract data and automate back office operations with what was touted as the latest software. Often, these efforts were expensive and time-consuming disappointments, thanks to earlier generations of optical character recognition and data capture software that were error-prone, inflexible and difficult to use and maintain. Over the last several years, however, the advances made in artificial intelligence have made these applications more accurate and powerful, enabling the processing of handwriting, cursive or invoices and checks.

The biggest wins are often not noticed by customers. Real transformation is not always glamorous or headline-grabbing. Insurance is an industry built on information, much of which is carried by paper documents, forms and other supplementary materials that move between businesses and customers each day. At many insurance companies, solving the ongoing document and data extraction challenge —taking life insurance applications, homeowners’ policies, medicare enrollments, claims and all the supplemental materials that accompany them and extracting the relevant data—still requires human eyes for reading and fingers for data entry. These processes can be radically improved or even eliminated with cutting-edge technology. This reduces costs, but it also eliminates frustrating delays, clerical errors and inefficient processes that customers may not see but certainly feel. Solving for these challenges can improve conversion rates and customer retention – a win for everyone.

Don’t expect silver bullet results. The best way to doom a digital transformation project using AI is to assume that it will automate 100% of your workflows on day one, completing replacing all your existing processes (and employees). It will take time to fully integrate new tech. Use the first few weeks and months to automate routine tasks and slowly ramp up to handle more complicated processes. Be sure to work with technologists and stakeholders to develop metrics and goals that are achievable and account for this continuous improvement.

Think flexibility, not just efficiency. Yes, the goal is to save time and money by automating processes. But if all you do is find a way to streamline what you’ve always done, you’ve achieved digital fossilization rather than transformation. The best new technologies should evolve your path for capturing, storing and processing information. This will make it easier to glean insights about your customers, respond to their needs and lead to ideas for new products and services that leverage your existing capabilities in fresh—and profitable—ways.

Every industry is being shaped by technology and insurance is no different. Insurance companies that wait to innovate and embrace change risk falling further and further behind. Join HyperScience at InsureTech Connect 2019, the world’s largest insurtech event, which brings together innovators and industry incumbents from across the globe to discuss the current – and future – state of the industry.

Credits

Design: James Rivas

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