According to a recent Accenture report, digital leaders in insurance will gain $375 Billion in market share and new business opportunities by 2022. Here’s a guide for digital leaders looking to get their share of the pot of gold left behind by digital laggards.
Digital Ecosystems provide new threats and opportunities for established insurance companies. They are reshaping our industry and consumer requirements and opening the door for new types of technically sophisticated competitors to enter the market. They also give insurers new avenues to engage and deliver huge differentiating value to customers. Rich data sets that identify new opportunities and customers, and improve underwriting and claims. And, a constantly growing set of partners that can provide insurers highly differentiating innovations.
Offsetting that threat and capitalizing on that opportunity requires aligning the capabilities and competencies you have built as a digital leader. It gives you the ability to develop and implement game changing strategies giving you an incredible and sustainable competitive advantage in the market.
Your Seven Point Digital Leadership Plan for 2020
1. Create a Customer Centric Vision for the Digital Future
– How will your individual and business customers live and work in the digital future?
– What will they value and how will they work to achieve their goals
– How will those shift and or create new risks that they must address?
2. Map the digital ecosystems and platforms surrounding your customers
– Which ecosystems and platforms engage and support your customers in achieving their goals?
– Which align with and support their values, lifestyles and life stage?
– Which ecosystem orchestrators, platforms and solutions have the greatest influence on the ecosystem and its business models?
3. Identify the digital platforms and solutions that deliver the greatest value and highest level of connection to end insureds
– Which ecosystem participants most closely align with reducing insurable risks?
– Which of those providers are the most open to partnering and sharing data that can benefit the insured?
– Of those which has a business and technical infrastructure that best supports data and process interoperability?
4. Define insurance solutions / business models that can be integrated with those digital ecosystems, platforms and solutions
– What solutions and business models will enable you to deliver highly personalized, integrated and flexible solutions for the end insured
– How will those need to flex to accommodate changes in individual and business lifestyle, stage and situations?
– How can these be structured to deliver integrated risk management solutions and multi ecosystem/channel customer engagement and distribution?
5. Identify the operational and structural requirements for the highest potential solutions
– Which solutions create the greatest opportunity for profitable growth?
– Which of those open the door to additional value added insurance or associated services offerings?
– What are the technical and operational requirements for those solutions and what advantages or challenges would your organization face in delivering them?
6. Determine which solutions & partnerships create the greatest mutual value fastest
– Which MVP (minimally viable product) solutions could you bring to the market fastest.
– Which partnerships can help you accelerate delivery and which would be easiest to establish and sustain?
– Which of those would enable you to create the greatest value for and derive the greatest value from?
7. Implement a test and learn digital ecosystem strategy and portfolio
– What are the highest potential, easiest to implement ecosystem enabled solutions that you have discovered?
– What are the cross organizational and partnership requirements, challenges and learnings that must be addressed to implement them?
– How do you get buy in and support for an agile test and learn solution and distribution development process?
Is your company a Digital Insurance Leader? If so, you are proactively maturing the following capabilities and competencies:
- Customer Centric product, distribution, and organizational strategies
- Data interoperability across the organization to create a better customer experience & improve operational efficiencies
- Transformed legacy systems and solutions to support internal and external process interoperability and automation via microservices and dynamic data architectures
- Integrated AI and Machine Learning strategies and dynamic data architectures that are cross organizational and cross process.
- External data provider partnerships that enable you to develop real time customer centric / personalized approaches to underwriting, pricing, integrated policy management and claims as well as customer support.
- Multi channel digitally augmented distribution that delivers integrated customer, distribution partner, and carrier processes and experiences.
- Real Innovation Strategies focused not on shiny objects, but instead on delivering customer value in a digitally transformed world and insurance industry via new business and product models.
- A Managed Innovation Portfolio that uses staged investment to support a test and learn – fail fast culture and methodology.
- InsurTech and Technology Vendor Strategies that invest in partnerships aligned with the company’s vision and strategy for creating value in the digital future.
- Strategic, Organizational and Compensation Alignment between Leadership, Mid Management, Departments, and Partners that fuel what the organization needs to become, not what it used to be.
If your company hasn’t made material progress in developing digital leadership capabilities, you have a very short window of time to play catch up. If you don’t, it will be your market share and future business opportunities that the digital leaders will be taking away.
If your company is a digital leader, it’s time to put the capabilities you’ve developed to work. Developing and implementing an integrated Digital Ecosystem Strategy now enables you to accelerate growth and profits, reach customers and deliver value to them far more effectively. It also gives you a preemptive advantage in securing partnerships with the most powerful ecosystem players. To borrow from Nike, “Just Do It”. There’s a $375 Billion prize waiting.
Looking forward to your thoughts and comments.
