How to become a digital leader in the insurance industry
We all like to think of ourselves as leaders, but in today’s fast-paced world, how many of us are actually leading the pack and how many of us are stuck in the world of yesterday? The hard truth is that although insurance companies use a lot of technology, most aren’t really maximizing the full potential of the digital age to drive business growth and innovation.
Why is that? In many cases, insurance leaders are simply overwhelmed by the amount of technology available and don’t know where to start. Yet, surprisingly, an insurance digital transformation isn’t only, or even primarily, a function of technical know-how. It’s more about changing company paradigms and ways of thinking. In other words, becoming a digital leader in the insurance industry is more about how you think than what you know.
[.emph]Becoming a digital leader in the insurance industry is more about how you think than what you know. [.emph]
4 stages of technological development in insurance
Before covering how you can become a digital leader, let’s look at the four stages of an insurance digital maturity and where most companies get stuck.
Stage 1: Record-keeping
In the 1980s, technology was increasingly introduced in insurance companies. At that point, it basically served as a bookkeeper in the back office, helping insurance companies keep records more efficiently. It wasn’t a business driver–it was a cost of business. If technology worked well, it was invisible, and if it didn’t–well, let’s just say that both employees and customers learned to be patient. Technology staff wasn’t part of the leadership team, and customer experience wasn’t even a consideration when it came to technology.
Stage 2: Processing
As personal computers became more available, technology was no longer limited to storing data. It began to be used in core business activities to make existing processes more efficient. As part of this transition, small, individualized programs turned into large software applications, usually proprietary applications hosted on company servers.
At this stage, the business value of technology became more apparent, and technology leadership took on a more significant role in many companies, albeit far from the top–usually reporting to finance or operations. Technology teams were still seen as separate from business teams, and the two rarely interacted.
Stage 3: Digital
As the internet took over and people were able to access it from mobile devices, technology became a key driver of business growth. Technology teams were integrated with business teams, and online channels became the focus of business both for personal and commercial products. Technology began to actually define how business was conducted, rather than simply being used to support existing processes.
Stage 4: Platform
When companies are able to transform from digital operations to platform operations, technology becomes the core of the business. Instead of being separate entities, technology and business are fully integrated–technology isn’t supporting the business, it is the business.
AI and machine learning also take on a more prominent role at this stage. Rather than being limited to a set of rules, technology can actually make choices for the business. For example, in insurance, they can be used to identify fraud. Since core infrastructure can be managed by technology providers (such as AWS or Microsoft Azure for cloud infrastructure), in-house technology teams can focus on the customer-facing application development that is key to growth.
Barriers to an insurance digital transformation
Although the technology is readily available, the fact is that the insurance companies who are functioning in the platform stage are the outliers. In reality, most insurance companies are stuck somewhere between the processing and digital stages of technological maturity.
Why are so many companies stuck? One of the key barriers to an insurance digital transformation is the legacy code trap. An application that started with a few lines of code, may have grown to include hundreds of thousands, if not millions of lines of code as core applications grow more complex. Making changes in that type of legacy application requires an enormous amount of trouble-shooting, especially in a highly regulated industry like insurance. Every change has to be tested thoroughly to ensure that it does not negatively impact another area of the application. The smallest changes can take months or even years, creating a major obstacle to growth and transformation.
[.emph]of insurance executives are concerned about the availability of key skills.[.emph]
Another barrier is the limited availability of coding skills. In a 2019 PWC survey, 81% of insurance respondents said they were somewhat or very concerned about the availability of key skills. Skilled programmers are increasingly expensive and difficult to recruit. When applications are entirely dependent on the advanced coding skills of experienced technical employees, costs skyrocket and the organizations’ ability to innovate and meet customer expectations is limited by their ability to recruit coders.
Keys to leading an insurance digital transformation
How can you overcome the obstacles and become a digital leader in the insurance industry? Two elements are critical: customer-facing development and no-code platforms.
Customers today know they have options–a simple online search gives them endless alternatives and lifetime loyalty is a thing of the past. They’re used to seamless, user-friendly experiences and they expect no less from their insurance providers. That means they aren’t going to wade through a cumbersome, inconvenient onboarding or claim submission process–if that’s what they encounter, they’ll simply opt out and move to a competitor.
In order to create that type of seamless experience, it’s important to conceive of the customer experience as an integrated journey across platforms and departments rather than a series of disconnected steps. Therefore, IT teams can’t be siloed–they need to interact with the customer-facing teams in order to design processes to meet customer needs at all touchpoints and connect with the workflows of the customer-facing teams.
There is no one-size-fits-all solution, as each type of customer has unique needs. For example, a customer with a simple request may prefer an automatic process with a minimum number of touchpoints, whereas a customer with a complex claim may expect lots of interaction and frequent touchpoints. The only way to craft the right journey for every customer is to fully integrate business and technology teams.
In the age of social media, creating positive customer experiences is more important than ever since any customer experience can have a ripple effect. A bad customer experience is quickly amplified and can be disastrous. On the other hand, an excellent customer experience can become a key differentiating factor for your company, even when all other elements are equal.
No-code platforms can be key to overcoming barriers to insurance digital transformation and eliminating the legacy code trap. First of all, they make it much easier to make changes to applications. Using a no-code platform, a change to an application doesn’t impact other applications as long as the interface between the applications remains the same. There is no need for cumbersome testing of the entire system, and changes can be made quickly and easily without risk.
No-code platforms are designed for “citizen developers”– people who understand the business requirements of an application but have limited technical skills. They enable non-technical staff to create applications to meet business needs, building, testing, and deploying applications using visual tools that let them arrange elements until they have a viable solution.
By empowering citizen developers, insurance industry leaders can eliminate the bottleneck created by limited coding resources. With non-technical staff able to provide many solutions, a company’s highly trained developers can focus on mission-critical applications and existing personnel can be repurposed to deliver solutions quickly. The resulting agility enables scale and allows insurance companies to remain competitive and meet dynamic customer needs.
Insurance industry leaders looking to lead a digital transformation need a no-code platform built for their needs, and EasySend offers a no-code solution designed specifically for the insurance industry. It makes it simple to review, eSign, and send any legally-binding form, claim, or contract, and offers a powerful suite of digital transformation solutions for insurance enterprises. With a no-code solution like EasySend, leading a digital transformation is easier than ever.