In this article, you’ll get a guide for each stage of your P&C company’s digital transformation journey. Some steps will require testing and adjustment for optimal results, but that’s no reason to shy away from the competitive advantage of a robust digital ecosystem.
Your company likely caters to a specific set of risks or demographics, and we will also include where you can customize the steps to fit best with your budget, culture, and team.
- Leadership and change management will have a massive impact on adoption
- Embracing telematics can yield both useful data and make customers feel valued
- Automate repetitive low-skill tasks first
- Have strategies for when you encounter common challenges to digital transformation
Starting down the road of new insurance technology (insurtech) for its own sake will not yield a worthwhile ROI. Leadership will need to be on the same page, and you’ll need to assign a C-suite executive to oversee the change. Typically, we work with the CIO, but some P&C companies also appoint a Chief Digitizing Officer to dedicate their energy to the task.
Once the leadership team is on board, the biggest mistake we see is not getting input from the front line team members – the people who perform the underwriting, the claims adjustment, the sales. They will be able to tell you best where they encounter bottlenecks, redundancies, and wait times.
Digital transformation can mean just about anything when, as an industry, insurance tends to lag behind other agile market niches. That’s normal. It’s even good news because you will have a leg up on all of your competitors that are resisting the change or implementing inefficient systems.
The key to this journey is that it isn’t necessarily a set-and-forget process, like buying P&C insurance. Wise consumers conduct regular coverage reviews, and doing the same with your digital systems is necessary to prevent legacy systems.
One of the first successful digital leaps we see is automating current processes. Most of those are in either claims or underwriting. Any process that your team, agents, or customers have to wait for can be considered here.
When you save time, you’re making all three of those groups happy. In turn, you increase employee and customer retention. Plus, the agents that contract with you are happy to continue recommending your company to their prospects.
The choice comes down to whether you start with small steps or a big overhaul. Small steps will get you in the right direction and still keep you ahead of your competitors. It also decreases the initial budget and enables the digital transformation team to overcome the expected hurdles more easily.
Leadership guides often suggest making big changes at crisis points. Organizations are more likely to abandon the idea of “this is how we’ve always done it” when trying to solve a disaster. Unless your executive team can sell the concept well, snowballing smaller changes can make the adjustment more palatable until the technology proves a good ROI.
There will be hurdles.
But you can plan for them because the same ones crop up over and over. The big issues are poor leadership, comfort with legacy systems, and lack of training.
Poor leadership won’t sell the change. Change needs a few things to stick: clear goals, tangible benefits, clear consequences to not changing, and a direct-as-possible path to the desired outcome. You probably noticed the key here falls to clarity.
Part of the leadership responsibility is selling the change to people who will use it. Surprisingly, customers can be the easiest to convince that a new technology is worth their time. Agents and employees get used to doing something a certain way. The old systems (i.e. “this is the way we’ve always done things”) are comfortable. The learning curve may have been so long ago that it doesn’t register as a memory anymore.
Relying on the comfort of the legacy systems keeps your company farther and farther behind. But resistance here can be remedied with a great user interface and training program that someone actually uses. Few people will read the tech manuals anymore outside of IT.
Aside from automation, another fast, high ROI, digital adjustment is taking advantage of the increase in telematics. For example, installing a system in a car that measures speed, rate of acceleration, sudden braking, and even hours driving can give your underwriting predictive analytics software a more accurate risk assessment. Bonus: you’re also teaching your customers that safer driving means lower insurance rates. A win for you, your customers, and everyone else on the road.
Once you choose an area that is ripe for updating, set expectations. KPIs will let you know if your software is performing as it should or signal areas where it can be improved. As tech people, we lean heavily toward measurable KPIs. A measurable ROI benchmark will help you determine future competitive edges that you can take advantage of.
Whether you develop the insurtech in-house or work with a specialist, plan on a few rounds of testing. It will start with setting up demos on how the software should work and will look. Then release it to a small group of test users to troubleshoot problems. That will prevent most of the negative consequences from users when you release the polished version later.
Training will be your second to last step for this leg of the journey.
We mentioned earlier that adoption of the software could be challenged by the comfort with familiar technological tools. Employees may gripe at first, but that generally boils down to a training issue assuming well-built UX.
Agents will simply stop selling your products in favor of other easier-to-use tools if the new UI is too difficult to grasp. A comprehensive help section, walkthrough, and most importantly, intuitive user interface will keep even the most technologically challenged agents on board.
Customers will jump ship if your app is too convoluting. Remember, you aren’t competing for CX quality with other P&C insurance companies. Users compare apps across industries. Shopping for insurance on your app should be at least as easy as shopping for goods or meal delivery.
For example, we had a company that wanted to create a quote-to-bind online solution for a new revenue stream. Almost 10,000 independent agents now use this platform. We grew their non-risk bearing business by over 200% in a year, here’s how.
Working agent training into the plan creates room for promotion and adoption of the insurtech that you invest in.
Finally, gather data. You know that the more data you have on a customer’s risk profile, the more accurately you can determine their rates—the same works with any software you implement. Instead of risk, you can use this data to improve the user experience, identify new revenue opportunities, and teach your machine learning algorithms to save money by spotting fraud.
The possibilities of insurtech are just beginning to crack open for the P&C market. Between faster claims adjustments, better risk assessment, and automation reducing everything from spread to fraud, you can virtually pick your market opportunities at this point for increasing market share.