How to develop a digital transformation strategy for an insurance company
The insurance industry has experienced many changes in recent years. It is evident that the sector will become digital because of ever-changing customer needs. Disruption is about almost all lines of the insurance business. Each insurance product will likely be bought via digital channels like a mobile app, web portal, or chatbot. For example, people find it easier to choose auto insurance through their mobile phones than going to the physical office.
The importance of creating a digital transformation strategy and the values it can bring is obvious: more customers buying insurance products and services by digital means, fewer people calling a call center, lower operational costs, more satisfied consumers, etc. Therefore, most insurers understand the importance of digital transformation and see how it can change their business. At the same time, executives are considering risks, the long transformation process, and other pressing issues like regulatory compliance that seem more crucial now. So, to step on this long and complicated path, CEOs and other executives should know how to appropriately develop a digital transformation strategy.
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Six steps to digital transformation
This guide will teach you the essentials of developing a digital transformation strategy. The guidance looks like a set of digital transformation steps you should take to ensure success at the end of this exciting journey.
Step 1. Assess the current state of your business and IT
Assessing just the IT systems and technologies your insurance company has is not enough. Your first step in adopting digital transformation is obtaining a helicopter view of your business. The top priority is understanding how your customers’ journey relates to business processes.
Before defining the goal of the transformation project, you should identify all the pain points and inefficiencies your employees and customers face. For example, you can see that your clients complain about the long time they are waiting for an answer to their question from the call center consultant. That worsens the client’s attitude to the company and reduces overall customer loyalty.
To identify all the pain points, customer and employee interviews should be conducted. Such an activity is a part of the discovery phase we do. Usually, CX researchers are responsible for the interviews. They speak with real insurance consumers and identify their challenges while communicating with the company. So, you can see what difficulties your customers experience now. Understanding these problems, you will be ready to search for the right ways to solve them.
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Step 2. Define the goals of digital transformation
While exploring how well your processes are aligned with user experience, you will better envision the desired outcomes. After the discovery phase, you will be able to clearly set objectives for digital transformation. Among the most vivid examples of digital transformation goals are increasing revenue, entering new markets faster, improving employee productivity, and enhancing customer engagement.
Step 3. Engage all stakeholders whom it may concern
Key stakeholders should be involved in the process. Communicate the benefits of digital transformation to them. For example, suppose you explain that cutting the time it takes to submit a claim from 60 minutes to 30 minutes can improve customer loyalty. In that case, the stakeholders will more eagerly participate in the project, share their knowledge, and discuss the opportunities.
Building a cross-functional team is also instrumental in engaging executives to do digital transformation. People from different departments should come together to work towards a common goal and project. In the insurance company, these may be the Sales and Marketing Department and the Customer Support departments, for instance. They can share what should be done to improve the efficiency of the sales process on both sides: the customers and the insurers.
Step 4. Conduct a technology audit
Evaluating current technology infrastructure for an insurance company may become daunting if it lacks in-house IT specialists. Thus, finding a reliable digital transformation partner is essential. They will help you identify gaps and opportunities for improvement as well as recommend the right technology for bridging those gaps.
For example, one of our clients, the insurance company UNIQA, contacted us to inspect to understand why most customers don’t use their mobile app. We had to do a business analysis and explore the root causes. We also had to conduct a comprehensive technology audit as the company has many software products to integrate a mobile app.
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Discovery phase for the insurance company
An experienced software vendor will also prioritize all the initiatives and work to be done. After the audit, you will get a Work Breakdown Structure (the document which describes how the work will be divided into smaller parts), recommendations on resource allocation (team composition or, simply put, people required to design, develop, test, and implement the software), and cost estimation.
Step 5. Develop an implementation plan
Defining a roadmap for the digital transformation journey is also the responsibility of your trusted software vendor. They know and apply the best practices to establish milestones and timelines as well as assign responsibilities and roles. Professional tech specialists will select the right designers, developers, and test engineers to complete your project.
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Step 6. Implement and monitor progress
Usually, executing the plan is done in a phased approach. Today, software development companies and digital transformation accelerators use the Agile approach. It allows for iterative development—Agile teams work in short iterations or sprints that typically last 1-4 weeks. Each iteration involves a complete cycle of planning, designing, coding, testing, and delivering a working software component.
Other important aspects of this step include monitoring progress achieved using tracking key performance indicators and regular reviews.
Insurance companies on a digital transformation path will surely meet challenges. We at DICEUS will gladly guide you through this exciting journey by applying our expertise. Our top talents will help you discover the issues, find the solutions, and choose the right technology stack for the project. Contact us for a free consultation and a digital transformation roadmap.
