“One key to surviving in a world of disruption, where the external environment is changing at lightning speed, is to change the game internally.” — John Kotter

The extraordinary adoption of digital capabilities is changing the world at lightning speed, and the insurance industry is not immune. In a recent survey of insurance consumers, PricewaterhouseCoopers found that 70 percent conducted some form of digital research before purchasing their policies, 26 percent used a digital medium to purchase those policies, 67 percent would be willing to attach a sensor to their home or car to reduce premiums, and 68 percent would be willing to download and use an app provided by their insurance provider. Even more indicative of digital’s rapid expansion, industry CEOs told Forrester Research that they expect 56 percent of insurance revenues to be digitally generated by 2020.

Unfortunately, the industry is not keeping pace with the changes wrought by this disruption. EY found that almost 80 percent of insurers do not see themselves as digital leaders and Forrester found that only 9 percent feel they have mastered digital enough to use it as a competitive differentiator.

Biggest challenges to digital success

What’s holding insurers back? In a cross-industry survey by McKinsey & Company, structural and cultural issues pose the biggest challenges to digital success:

  • Difficulty finding talent (functional and technical).
  • Organization structure not designed appropriately for digital.
  • Business processes too inflexible for new opportunities.
  • Quality data and analytics to inform business decisions lacking.

The good news? Because these difficulties are largely internal, focusing on these three areas and rigorously measuring results go a long way toward shoring up your digital strategy.

Related: Insurance 2017: Priorities for innovation, automation and transformation

Business meeting

(Photo: Getty Images)

1. Establish a digital game plan

According to the EY survey
,a startling 47 percent of insurers indicated that they don’t have an up-to-date digital strategy or business case. The complexities associated with digital transformation can be significant: changing processes, unifying organization silos and modifying success measures, acquiring new skillsets, and changing cultural identities. Success requires a CEO mandate, a cross-functional executive team, and a roadmap that integrates prioritized initiatives (tied to corporate objectives) with detailed budgets.

What to measure:

  • Is ownership delineated (chief marketing officer, chief information officer, or digital officer)?
  • Does the team incorporate all required players?
  • Participation depends on the objectives of the transformation but should include representation from all impacted business areas: finance, risk, HR, and IT; as well as the marketing and sales groups.
  • Are team roles and decision rights clearly spelled out?
  • Does the strategy include initiatives (with detailed budgets and identified success measures) that tie directly to corporate objectives?
  • Are the overall measures that help to set initiative priorities identified (for example, improved customer satisfaction, increased profitability and decreased service costs, or quicker time-to-market)?
  • Is the digital strategy a regular part of board-level discussions?
  • Does the strategy include a skills assessment and concrete plans to fill gaps?
  • Are process and performance objective changes identified?
  • Are required data and technology enhancements incorporated into the prioritized initiatives?

Related: How to strategically monitor your book of business

Man drawing on clear screen customer experience

(Photo: Shutterstock)

2. Put customer experience first

Just because the industry lags behind in customer satisfaction doesn’t mean customer expectations are lower for insurers. Savvy consumers expect a digitally enhanced customer experience that goes beyond simple ecommerce. This means timely, relevant communications that conform to personal preferences and highlight real customer knowledge. For example, rather than a generic annual policy review letter, an insurer might send a text message triggering a policy review only when circumstances change (when home values in the area have increased enough to warrant increasing coverage, for instance). The message might contain a click-through to a web page with the relevant comparable value versus coverage information, an appointment set-up function, and a click-to-call option for the agent in question.

Seamless and consistent experiences with minimal friction points are also critical. Streamlining claims reporting with mobile apps that dynamically adjust questions to the type of claim, speed up the damage assessment with in-app functionality, and provide location-based connections to approved repair companies are a good example of where the industry is headed.

What to measure:

  • Are you tracking customer-oriented measures such as net promoter score, customer lifetime value, and customer satisfaction?
  • Do you have cross-channel journey maps that highlight personas, journey objectives, handoff points, and pain points?
  • Are these journey maps dynamic and revisited?
  • Are measures established for the journeys based on the mapping results (for example, one-call resolution, ease and speed of claims process, a single contact point for the claim, and time-to-notification for agent changes)?
  • Are the digital channels measured (for example, time in the mobile app, frequency of use, drop-off points, content accessed, and navigation)?
  • Do you employ voice-of-the-customer techniques for feedback or web app measures?
  • Are the agents and brokers who are included in the strategy provided with digital capabilities?

Related: Insurance consumers: We’ll give up our data for personalized service

Back of African-American man analyzing financial data

(Photo: Shutterstock)

3. Use advanced analytics

Insurers are at the forefront of using analytics to predict risk and price policies, and it’s imperative that these skills are balanced across the organization, particularly in the customer experience area. A Forbes Insights study found that leaders in using data-driven experience management experienced benefits including faster time to decisions (67 percent), a more comprehensive common enterprise view of customers (51 percent), more confidence in their decisions by managers and employees (49 percent), better collaboration between departments (36 percent) and greater repeat business (44 percent). This means that analytics is fostering much more than a share of wallet and profits. It’s also playing a role in changing the internal game; in breaking down organization silos and changing cultures.

What to measure:

  • Do you have a comprehensive 360-degree view of customers and all their interactions across all channels?
  • Are you developing insights around customer value; including lifetime value, influence value and the extent of their social networks?
  • Are you developing insights around customer behavior; including past channel and product usage patterns, engagement, and interactions across all channels?
  • Are you using sentiment and social media analysis to develop insight around attitudes, preferences, and opinions?
  • Are you using predictive analytics to optimize customer communications? Across all channels?

Digital transformation is changing the world and insurers must change with it. Establishing a digital game plan, putting customer experience first, and operationalizing analytics will get you there.   

Related: 10 new digital marketing tips for agents, advisors [infographic]

Lisa Loftis is a Thought Leader on the SAS Best Practices team where she focuses on customer intelligence, and digital marketing. She is co-author of “Building the Customer Centric Enterprise (Wiley). She can be reached at Lisa.Loftis@sas.com.