In today’s digitally transformative climate, the role of CEOs in the insurance world is rapidly shifting from being reactive to proactive. In an industry that has been traditionally paper-intensive, as well as subject to strict regulatory measures, going digital is not a one-time activity. It is a journey to transformation. Similar to the banking sector, the industry frontrunners are increasingly realizing the importance of making sure their company’s value proposition is aligned to the needs of the market.
Along the value chain, both basic and advanced insurance products are getting digitalized. From automated document capture solutions to natural language processing-powered claims processing, they are taking advantage of both macro and micro technology disruptions. But it is no walk in the park for the CEO of an insurance company to oversee the implementation of new technologies. Some of the challenges they may run into include:
- Ensuring legacy modernization for a fully connected ecosystem
- Enabling application interoperability for real-time data processing
- Meeting regulation and compliance standards in a timely manner
- Difficulty in moving value interactions to mobile devices
- Managing a growing network of partners, vendors and third parties
It is a ‘disrupt or go extinct’ situation for CEOs. Hence, they are under constant pressure to maintain a complete understanding of their company’s inner-workings to overcome traditional and emerging barriers. They must act upon this knowledge to identify strengths, predict risks, and keep things moving daily so that the company thrives in the digital environment.
CEOs are also expected to set a successful strategic course, and behind each of these lies smart decisions made at the right time and for the right reason.
The first step determines the journey
Martin Luther King, Jr., said, “You don’t have to see the whole staircase, just to take the first step.”
One common trait that successful leaders share is that they are go-getters. They do not get caught up in situations where they experience ‘analysis paralysis’. Similarly, as far as implementing new insurance technology, CEOs need to understand they cannot identify and resolve every single step before taking the first one.
There is more than one player in any given insurance journey. Getting 100% of all requirements mapped in the pre-implementation stage is virtually impossible. Neither can they spend valuable time and resources on figuring each step. They must realize that they require the support of the intermediary players to facilitate any type of insurance innovation. It is critical to bring everyone together in a connected ecosystem.
Another critical aspect is that leaders must avoid aiming for the stars from the start. When the bar is set so high, it may be difficult to sustain the momentum throughout the implementation process. Furthermore, the criticality of issues like data privacy and regulatory compliance in the insurance industry cannot be understated. For better or worse, legacy systems cannot go fully obsolete. It means the CEO is on double duty as far as overseeing technology operations are concerned. Ensuring that digital-first infrastructure coexists and communicates with the legacy architecture is often mandatory. The trick is to get off to a steady start and measuredly scale up operations after hitting the sweet spot.
But first, CEOs must ascertain the direction they are looking to steer the company toward while understanding all the components involved in ensuring a smooth insurance journey. If the new solution meets the initial criteria, then they should take the first step without delay.
Another vital aspect is to look at the modules of the technology solution that is required for the company in the present. It can be extremely useful to look at technology as not just a transformative tool to enable external business growth, but also as an internal catalyst to drive more efficiency and productivity. Not many people talk about the rise of human intellectual capital in the insurance world, fueled by continuous digital transformation. Adopting and developing innovative insurance technologies may soon become a value creator for the workforce as well.
Change is constant; so is effective leadership
In the process of implementation, if there are new requirements or any changes to existing systems in place, such should be treated as incremental. CEOs must take them up in phases, or else they may face the pressure of mitigating risks relating to disruption of critical business processes. It is also why the role of OCM (organization change management) plays such an important role in the solution implementation journey.
There may be various scenarios for the change — from replacing legacy systems to aligning technology outlook to new insurance trends and acting upon regulations. That is where OCM can make an impact. OCM is about being equipped with the right process, tools and techniques to enable the workforce to work toward achieving specific business outcomes. As the saying goes, change first happens at the top. Only then will the workforce be driven and motivated to align themselves with the changes.
Making product success a priority
From a systems point of view, it is appropriate to choose a system that addresses 80-90% of the insurance company’s requirements. The more important part, as mentioned earlier, is to take a phased approach.
During phase 1, if the new system addresses 80% or above of the current requirements, the CEO should focus on swiftly completing the implementation. This way, a majority of the company’s business (80%) will get onboarded faster, rather than waiting for full implementation. The remaining 20% can be completed in phase 2. Unfortunately, many CEOs make the mistake of trying to complete 100%, which can result in endless project extensions without any sign of ROI.
Another situation to consider is the CEO’s priorities for product implementation. If for example, the insurer has 10 products, with only two products contributing to 5% of the premium. In such cases, CEOs must focus on making sure the remaining eight products, which contribute 95% of the premium, are supported well with the new system. Phase 2 can be when these two products can be looked at, considering they may require additional customization.
It is highly recommended to take the path in which 80% or above can be efficiently accomplished in a short time, as opposed to unpreparedly going for 100%. CEOs must focus on what they should implement first to maximize the potential ROI. While looking for a vendor, they should look for a company that initially meets at least 80% of the requirements.
It takes a team to create a success story
During their leadership careers, many CEOs in the insurance industry have harnessed the power of delegation to yield long-term positive returns. In some sense, it is their way of empowering themselves to do their jobs, at the helm, more efficiently. Hence, they need to enable the next chain of command or next line managers to make sure the internal workflows function more effortlessly — thereby making the implementation a success.
These days, with time becoming a more treasured commodity in the insurance world, the art of delegation is a skill that modern leaders are racing to study and master. Delegation can be a CEO’s secret weapon. After all, they belong to an industry that can make or break players based on how much clarity the company has about the scope, parameters and expected business outcomes of any insurance solution-driven project.
More importantly, it allows team members to do what they were hired to do.
Vivek Sethia is the CEO and co-founder of Beyontec Solutions, a leading provider of end-to-end technology solutions for the global Insurance industry. He guides the business development initiatives and heads the strategic relationship management for the company.