8 Success drivers in large commercial insurance
The insurance industry is currently dealing with a large amount of internal and external factors exerting intense pressure, pushing the entire sector towards the brink of transformation. In order to survive - and thrive - insurers must learn, evolve, and build new capabilities, both technological and otherwise.
A revealing report from KPMG, a multinational professional services network, points to which areas require the most focus – many of which hinge upon successful digital transformation, beginning with implementing digital data intake.
How much longer can traditional insurance business models survive?
With agile new disruptors regularly coming into the insurance sector ready and willing to embrace dramatic change, traditional commercial insurers can no longer simply hold their ground. To stay relevant in a developing industry, widespread organizational evolution led by an embrace of digital technology is not just important, it’s make or break.
This understanding is what led KPMG to survey 400 decision-makers from international commercial insurance organizations. Seeking to better understand the new insurance trends and their impact on the industry’s future, KPMG released a report detailing three future business models that will dominate the commercial insurance market, as well as eight keys to success in the modern insurance sector.
Three future insurance business models
KPMG identifies three business models that they believe will dominate the transforming insurance market:
- The agile global player is an established player in the market, often covering multiple countries, business lines, and segments. To succeed, these companies will focus on harnessing new technologies, adapting to the changing economic and social landscape, and reducing reliance on legacy processes and tech.
- The innovative specialist is an agile, ambitious organization capable of rapidly embracing new and emerging risks. They can develop new products harnessing the power of technology and data to scale rapidly and take advantage of new opportunities in the market.
- The open-source risk manager recognizes that the global insurance market is complicated, regulated, and competitive, allowing them to carve out a powerful position in the market by bringing together risk, capital, and operational execution.
Eight keys for success in the new insurance sector
KPMG’s eight Connected Enterprise capabilities apply across all three of the above business models, promising to double an insurance company’s success and impact in the new industry landscape. These cross-functional tools, methods, and frameworks are designed to help those who embrace them accelerate innovation, improve agility, and adopt an approach to digital transformation that puts customers at the center.
1. Insight-driven strategies and actions
- The agile global player uses insight-driven strategies and actions to connect all their functions across the entire insurance value chain - operational efficiency, product leadership, customer intimacy, and customer lock-in. This enables them to share and analyze data in order to streamline performance.
- The innovative specialist analyzes external market data to understand consumer needs and trends in order to design and build new products.
- The open-source risk manager combines and shares insights related to risk, enabling insurance carriers to allocate capital and underwrite risks where necessary.
Digital data intake is crucial for supporting insight-driven strategies and actions for all 3 models, ensuring that data is easily and accurately recorded right from the start.
2. Innovative products and services
- The agile global player enhances and adjusts its existing insurance products and services to better serve their clients’ needs, incorporating new products into its evolving business strategies and offerings.
- The innovative specialist responds to emerging risk trends with the goal of being first to market with new products.
- The open-source risk manager packages risk into innovative groups to improve matching between clients and providers.
As the first interaction touchpoint with the customer, digitizing data collection ensures that right from the start, you’re meeting the current market demand for fast, easy, online processes.
3. Experience-centricity by design
- The agile global player optimizes existing customer journeys for the modern client’s expectations, delivering a solution that removes friction from the end-to-end commercial insurance journey.
- The innovative specialist uses greenfield services and products to create entirely new service offerings with client experience at the core from the very beginning.
- The open-source risk manager reduces friction from the entire end-to-end commercial insurance journey, offering a holistic solution to both clients and capital providers.
Data intake is at the core of most insurance processes. By digitizing the data collection process, insurance companies can offer their customers a far better user experience.
4. Seamless interactions and commerce
- The agile global player meets their customer’s expectations for a smooth, tailored experience by defining clear client segments and ensuring consistent interactions and pricing.
- The innovative specialist builds products for specific client segments, using sales and marketing that targets their client demographic.
- The open-source risk manager ensures transparency regarding pricing and payment across the opensource network.
Providing customers with seamless interactions from the start is crucial for meeting customers needs. Digital data intake allows insurance companies to offer these types of friction-free experiences to their users, while also reducing overall costs and risk of errors.
5. Responsive operations and supply chain
- The agile global player optimizes operations to ensure their agility, while improving integration with third-party suppliers.
- The innovative specialist builds scalable operations and integrations with partners, allowing them to alongside their new products and services, as required.
- The open-source risk manager builds a strong, integrated supply chain and operational foundation to support an efficient risk coverage ecosystem.
Digital data intake is intrinsically scalable, reducing the need for human resources as your company grows.
6. Aligned and empowered workforce
- The agile global player motivates and empowers their teams to transform and evolve the business in order to meet changing customer and market demands.
- The innovative specialist creates a culture of innovation and high-growth to encourage creativity and entrepreneurialism.
- The open-source risk manager enhances its core insurance skills with experience from different industries.
Digitizing data collection, which forms a significant part of customer interactions in the insurance industry, frees up your workforce, allowing them to focus on more creative, innovative challenges and endeavors.
7. Digitally-enabled technology architecture
- The agile global player transitions from legacy platforms to new digital technology in order to reduce costs and achieve greater flexibility, while offering their customers an enhanced experience.
- The innovative specialist implements digital technology right from the start, using platforms that enable innovation and evolution.
- The open-source risk manager uses an integrated, possibly decentralized technological platform to spread risk and capital amongst multiple parties.
Digital transformation is inevitable, but where should your insurance company start? Since data intake and collection form such a significant part of customer interactions, starting with digitizing data intake offers a practical way to understand and design the different types of customer journeys you’ll need.
8. Integrated partner and alliance ecosystem
- The agile global player works with existing partners and other third-party players to improve the customer experience and meet changing market demands.
- The innovative specialist partners with similar organizations that can grow together with them.
- The open-source risk manager engages with multiple players throughout the industry to deliver an open-source risk management platform.
A successful digital transformation relies on the right third-party platforms and solutions, starting with the right digital data intake solution. No-code solutions allow insurance companies to create digital customer journeys without requiring programmers to write code, resulting in lower costs, easier maintenance, faster time to market, and increased innovation.
Digital data collection is essential
Technology provides the supporting foundation for all eight of the connected enterprise capabilities. And while these capabilities represent long-term, big-picture goals and sweeping organizational changes, there is one place to begin that is relatively simple as a start: Digital data collection.
Representing the first interaction between customers and your company, digital data collection sets the tone for a positive customer experience. A critical part of the insurance customer workflow, automating customer data intake emerges as a fitting first step toward the type of agile evolution required to keep up with the insurance sector.
Digital data collection offers numerous benefits that positively impact ROI, from creating faster, more efficient, and more accurate processes to improving the customer experience to enabling end-to-end automation across all company processes. KPMG shows us that this type of seamless digital interaction is the future standard. Embracing it now will set you on the path to best be able to make progress in the right direction for short- and long-term success.