A Successful Digital Transformation Needs a Digital Culture
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Historically, the insurance industry has been slow to adopt digital technologies. The industry has cited legacy solutions, extensive compliance requirements, and limited resources as reasons for insufficient progress in digital transformation. However, recent changes have forced insurers to look at digital solutions to support a remote workforce and online customer service.
An April 2020 survey of German insurance agents found that about half of the agents have seen a decrease in new business of over 40% since mid-March. A May 2020 survey of U.S. agents determined that building new customer relationships remotely was their primary challenge. Meanwhile, online insurance aggregators and direct channels are seeing the same or higher volumes of new business. If insurers want to acquire new business, they need to embrace the technologies that lead to digital transformation.
It’s not enough to embrace technologies. Businesses need to create a digital culture that supports transformation. A recent study found that 80% of digital transformation fails because organizations lacked a digital culture. Why is it that a digital culture is so essential?
Corporate culture is “the way things get done” in an organization. It is the sum of shared experiences, values, and beliefs of a business that defines how employees conduct themselves. What these companies have learned is that a company’s culture, when aligned with its business strategies, results in business growth. In fact, a positive culture can enhance employee engagement by 30%, resulting in up to a 19% increase in operating income and a 28% increase in earnings growth.
Unfortunately, a misaligned culture can stall growth and undermine attempts at change. This misalignment happens when a company doesn’t create a digital culture to support its digital transformation. With a digital culture, technology is seen as a tool to improve customer experience. Where a corporate culture defines how an organization does things, a digital culture describes how an organization uses technology to shape the way it interacts, behaves, thinks, and communicates in the workplace.
How can service providers use technology to create a digital culture that improves the customer experience?
- Moving to digital tools
- Deploying more self-service solutions
- Migrating offline processes to online
As service providers implement technology, they need to instill a cultural change that places the customer at the center of their digital transformation.
Insurers build relationships using face-to-face contact with clients. Without the ability to conduct in-person meetings, agents are rethinking how to establish or maintain client relationships. For example, a January 2020 survey of U.S. agents found that the majority of their conversations were conducted in-person.
- 90% of life insurance agents’ sales conversations were in person.
- 70% of agents’ ongoing conversations with clients were in person.
Five months later, agents reported that less than 5% of their client conversations were in-person. Out of necessity, online communications are increasing, and the industry needs to establish a culture that is comfortable using that technology. Providing digital tools is one way to reinforce the importance of a digital culture.
Insurers need to explore collaborative tools that allow online conversations. Facetime may work for some customers, while others may be more comfortable with Zoom. Before using a digital tool, think about the customer experience. If agents would normally use written materials, suggest that they email the materials ahead of time.
As agents and customers become more comfortable, consider using some built-in features such as whiteboards that allow agents to draft information in real-time for clients to view. The focus should be on how technology can emulate the in-person experience to improve the customer’s digital experience.
No matter the industry, consumers want some form of self-service. It may be an online troubleshooting guide or a how-to page. For the insurance industry, self-service could involve plan comparisons with quotation options. It might include filing or checking on a claim. According to McKinsey, consumers want access to self-service features, especially in the area of customer support.
A recent survey in Spain found digital access in insurance has increased by almost 30% since the beginning of 2020. However, customers were dissatisfied with the digital delivery. In fact, the insurance industry was ranked the lowest in customer satisfaction across all sectors.The primary reason for dissatisfaction was hard to use tools.
To be successful, insurers need to look at self-service through the eyes of the consumer. How will the customer interact with the technology? One change in consumer behavior as a result of the pandemic is their willingness to shift loyalties. Consumers have been forced to look at alternatives to their preferred products and services because of supply chain disruption. That has resulted in consumers finding options that better met their needs. About 63% plan on continuing the practice, meaning customer loyalty is no longer guaranteed.
Making the self-service aspects of a digital experience more customer-friendly goes a long way to instilling a digital culture throughout your network of agents. The more digital changes they see, the more likely they are to embrace a digital transformation.
As insurers, if you want a digital culture, your processes need to be digital. Trying to salvage a legacy system through compensating offline processes fails to deliver the digital experience that customers want and agents need. Waiting for signatures that may or may not require notarization can significantly delay a process.
A January 2020 survey found that 50% of all U.S, agents are dissatisfied with the signature capabilities of their primary carrier. Requiring signatures that can only be processed offline limits an agent’s reach. As mentioned previously, consumers are less risk-averse and are more likely to look to a competitor if their expectations are not met.
To complete in a digital world, insurers must focus on the technologies that can deliver the products and services that consumers want. Continuing to use a hybrid process only frustrates agents and clients alike.
Digital No-Code Platform
EasySend’s no-code platform enables organizations to quickly digitize processes. Using citizen developers, companies can create solutions quickly without taking away from critical tasks. EasySend’s solution is a first step in showing agents and clients a shift to a digital culture.