In nearly every industry, business leaders are searching for their organization's place in the digital landscape. A digital business is more than using social media or offering mobile applications. A digital business succeeds by staying ahead of the curve and reinventing itself to differentiate it from competitors.

The insurance industry is not exempt from this transformation, and it lags behind other industries. Agencies and carriers who fail to recognize the digital disruption will be left behind, as customers will turn to those companies that support their business priorities, and improve customer experience and operational efficiency.

Taking the steps to become a digital business will have its challenges. “The degree of pain will be dependent on how well companies create new strategies; embrace innovation; fund transformation initiatives; and create a business that will be flexible, adaptable and valuable in the new digital future,” says Denise Garth, partner at Stategy Meets Action (SMA).

SMA, an insurance research and advisory firm, identifies eight essentials for preparing for the digital revolution.

1. Digitalization is everywhere.

And it is necessary for winning and retaining customers. We live in a world that is digitally charged and connected, and it is growing exponentially more so as everything becomes even more connected.This is driven by new technologies and the customer experiences that have been reshaped by the use of these technologies, creating an increased preference for digital in the process. In response, modern technology and digitalization must now change how companies view themselves–no longer as value chains, but rather as enterprise ecosystems that must be connected.

2. Digitalization is dramatically destructive.

A disruptive, foundational change is taking place in the way all businesses are approaching value creation. The ubiquitous connectivity of people via the Internet and emerging technologies (such as social media, the Internet of Things, crowdsourcing, mobile, and cloud) are disrupting traditional and historic business assumptions–from how to engage customers, to the products and services offered, and ultimately, to business and revenue models. The barrier to new entries into all industries is falling or is already gone, creating more risk to existing business and revenue models. New entrants are finding it easier to build, launch, and sell much more rapidly.

3. Data and information are the new currency in the digital world.

And it is critical to the acquisition of insights about customers, the offerings of products and services, the creation of new products and services, and more. Increasingly, data is being connected to the cloud, allowing data to be available anytime, anywhere and in any way.

4. A massive paradigm shift in how we view and understand the world has occurred.

The necessity to view businesses in a bigger frame of the world must follow suit, otherwise the view will be too small and detrimental. Align around a vision, projecting possibilities and outcomes. Spend to achieve an opportunity or possibility, not to complete a project, otherwise you will find yourself trailing the competition. Just think big.

5. Operational excellence is table stakes and innovation is the price for future success.

The absence of action and innovation creates significant business risk and a potential for lack of relevance. Innovation is the price for strategy enablement and the creation of possibilities. Life-long learning, creativity, an entrepreneurial spirit, and the understanding of computer science, math and data are critical characteristics for future success.

6. Innovation and collaboration are mandatory for future success.

These are critical components for digital companies today, but the success with which they are employed will separate out the market leaders of tomorrow. The flow of information to engage collaboration through a network of resources and communities is vital to developing new products and services. The collective intelligence of ecosystems promotes entrepreneurship, provides a greater understanding of new technologies, and stimulates the learning and creativity that together are key characteristics for future success.

7. Customer empowerment defines new engagement models.

We used to shape customer experience; now it is shaped for us by the rest of the world. As customers gain market power, become more comfortable with technology, have a stronger voice and demand collaboration, companies must reinvent themselves and have a unified digital strategy that enables customer experience consistency and connectivity.

8. All technology must be viewed as customer-touching.

Social, mobile, analytics, cloud, wearable devices, robotics, the Internet of Things, telematics, driverless vehicles, biotechnology and much much more all influence and define customer relationships. Technology is super connected. It creates new outcomes, new experiences, and new products and services. And the future will be the cloud of things, with a world of distributed data, devices, technology, intelligence, computing and more that are highly connected.

Special Reports /

8 ways to prepare agencies and carriers for the digital revolution

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