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Insurance Digital Transformation – Digital Transformation in the Insurance Industry is a Top Strategic Priority and New Reality
“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security—we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.” – Satya Nadella, CEO Microsoft[i]
This statement was on April 30th – just two months into COVID – and reflects the pace of change and acceleration of digital transformation in the insurance industry. And tremendous changes are still on the horizon for insurance. The pace continues to gather speed and dominate C-level discussions and planning.
Today’s changes require insurers to gain clarity on how to succeed in the future of insurance. Future market leadership and success will be defined by a new digital foundation and business model that embraces customer, technology and market boundary changes with vision, energy and speed. This year’s Strategic Priorities report found that forward-thinking leaders are digitally transforming their current business, while also disrupting it by building their business model for the future. The gap between Leaders and Followers and Laggards over the last year and the next three years is staggering:
- In the past year, Laggards had a 41% gap to Leaders; and Followers, had a 15% gap to Leaders.
- Over the next three years, the gap widens with Laggards and Followers falling further behind Leaders, with 62% and 21% gaps, respectively.
The era of succeeding as a “fast-follower” is long gone. Today’s Leaders are reallocating their investments into digital transformation that gives them a compelling, engaging customer-centric approach that differentiates them in a new era of insurance.
How do your strategies align to what leaders are doing? What specific plans can you take to improve your odds of success? How can you accelerate your insurance digital transformation? These questions and more are what the just announced strategic alliance between Majesco and KPMG are focused on: to provide a sustainable, risk-optimized route from strategy through execution for insurers by leveraging the Majesco Digital1st® Insurance platform and KPMG’s Connected Enterprise framework to enable digital insurance strategies and business models.
Digital Maturity
In Gartner’s Emerging Risks Monitor Report from earlier this year, they noted that “organizations are concerned about their ability to keep up with a rapidly changing business landscape, driven in part by concerns about their own organizations’ lagging and misconceived digitalization strategies.”[ii] This is a profound statement. Insurance still embraces decades of legacy business assumptions and technologies that are roadblocks on the path to digital maturity. Why is this important?
Because KPMG’s research, compiled from various studies, found that that digitally mature organizations out-perform less mature organizations. How? Digitally mature organizations had 25% higher revenue growth and 31% higher EBIDTA over the last 3 years, 11% higher net promoter score and higher speed to market by 17 months! Digitally mature organizations not only operate more effectively, they are obsessed with their customers and with defining, unlocking and preserving value for both the customer and their business.
For too many insurers who lack digital maturity, this difference and the growing gap between Leaders and Followers and Laggards should be a strong motivator to move forward on the journey and get ahead of the curve … now.
The Path to Digital Maturity
Visionary leaders see the market, customer and technological trends as a many-fold opportunity for insurance — and are preparing to use new sources of data, reach new market segments, offer innovative new products needed by customers, create exceptional customer experiences, leverage new channels and more. KPMG’s recent report, 2020 CEO Outlook, found that the top priorities were focused on: digitization of operations (74%); new digital business models (70%); the creation of a seamless experience (73%); and a new workforce model augmenting people with AI (66%).
Majesco’s research echoed a similar sentiment and indicated that leaders are moving forward with a cloud-based no code / low code platform utilizing microservices and open APIs (64%); are envisioning and experimenting with new digital experiences (68%); and are focused on digital ecosystems and partnerships (45%) that will allow them to stay out ahead of the trend and the marketplace.
This is why Leaders are accelerating their digital journey across three key areas as depicted in Majesco’s Digital Maturity Model (below):
- Digitize – Create Portals for Traditional Products & Channels for Digitization & Automation of Existing Processes
- Optimize – Expand Customer Engagement beyond Transactional Interactions to Broader Customer Experiences
- Innovate – Launch New & Innovative Products & Services to Transform to Digital Operating and Business Models
Insurers can start at any point on this maturity curve – from focusing on today’s business or by creating the business for the future. Regardless, having a single digital no code / low code platform with rich insurance content and a robust digital ecosystem of partners to enable this journey across a wide array of business scenarios, is crucial for success.
But acceleration means traditional methods have to be adapted to meet the time pressures. This is where the KPMG and Majesco alliance is so powerful – with use cases pre-built in Digital1st® using KPMG’s methods for design thinking in a virtual world that can rapidly demonstrate value in weeks or months, rather than years. Some of these use cases include:
- P&C multi-channel personalized quoting
- Portfolio-level servicing
- P&C Intelligent claims intake
- P&C action-driven underwriting workbench
- L&A pipeline insights and next best action
- L&A personalized products and underwriting
And that is just a snippet of the possibilities to jump start or accelerate digital transformation in insurance!
Digital Maturity – From Good to Great
The book by Jim Collins, Good to Great, published nearly 20 years ago, is still so relevant in today’s digital age. While many different concepts were discussed in the book, the key to success was leadership. A key to that leadership is having the right people in the right positions to create an environment for success. They have a vision and goals for success and constantly review and act on data or results to “make it better.”
In today’s digital world that is about creating an environment that enables “test and learn” and innovation. And the theme is speed to market. While there is design work to take advantage of better insights and interactions, having access to a robust insurance ecosystem and pre-integrated and pre-built insurance content within a no code / low code platform allows insurers to focus on their unique application and competitive differentiation in the experience.
Insurers need to do some future-thinking around real-time risk assessment, and re-imagine customer journeys to move beyond a portal to a new customer experience, to create new products, offer new services and innovate their business models through a no code / low code platform like Majesco Digital1stâ Insurance that has rich insurance content and pre-built plug and play ecosystem design that will accelerate their insurance digital transformation and maturity.
Companies that procrastinate are increasing their risk of irrelevance, because as the pace of change accelerates, their ability to adapt diminishes. This is why taking action now is crucial. The time for plans and execution is now — recognizing that the gap is widening and the timeframe to respond is closing. Leaders are positioned to succeed.
Are you ready to accelerate your insurance digital transformation? Together, Majesco and KPMG are ready to help you on your journey!
[i] Spataro, Jared, “2 years of digital transformation in 2 months,” Microsoft, April 30, 2020, https://www.microsoft.com/en-us/microsoft-365/blog/2020/04/30/2-years-digital-transformation-2-months/
[ii] “ Gartner Survey Shows Pace of Change as Top Emerging Risk Concerning Organizations in 2Q19,” Gartner Press Release, July 24, 2019, https://www.gartner.com/en/newsroom/press-releases/2019-07-24-gartner-survey-shows-pace-of-change-as-top-emerging-r