Digital Transformation in the Insurance market: From Traditional Infrastructure to New Digital Technologies
Digital is interwoven into each aspect of people's daily lives and it has become a common element of every social and business activities: individuals and businesses alike are embracing the digital revolution. In fact, social networks and digital devices are being used to engage government, businesses and society, as well as friends and family: people are using mobile and interactive tools to determine who to trust, where to go and what to buy.
Thus, this digital revolution has transformed the way in which people interacts, with a consequent evolution of business management and activities. For this reason every industry is undertaking its own digital transformation, rethinking what customers value most and creating operating models that take advantage from these new digital enablers for a competitive differentiation.
Business leaders have been using information technology to improve productivity and efficiency, reach new markets and optimize supply chains. But what now is new in the digital world is that customer expectations have changed as a result of the new digital technologies.
The main challenge for every industry is how fast and how far to go on the path to digital transformation, satisfying the new customer needs. The impact of this digital revolution is the Digital Transformation of enterprises.
In the Insurance market, business is subject now to new expectations, competitors, channels, threats and opportunities.
Insurers know that the customer is ready for the digital evolution as he is already using the new digital technologies and this is why customers' needs are driving change. But Insurers have still quite a way to go.
They are actively working to manage business activities and processes in order to reach digital excellence but they need to build a new set of capabilities that will allow them to progress along both the reshaping of customer value propositions and reconfiguring models and processes. Digital technologies allow greater customer experience and satisfaction, as well as partner interaction and collaboration.
Insurers must manage existing, often traditional, offerings and operations, with new digital behavior requirements to quickly drive up costs and complexity but the existing systems are costly to maintain and not flexible enough to support new business initiatives derived from digital.
Individual technology efforts must tend towards a common vision supported by an updated, integrated infrastructure to compete effectively in the market.
Thus Insurers are investing in the digital transformation through technological enablers in order to reach the Digital Innovation and to transact insurance digitally, achieving modernization goals.
The investments involve technological legacy renewals, making business processes and policyholder service processes digital, business process automation, the use of analytics and rules to automate decisions.
The main challenges are the Integration Complexity and the Legacy Infrastructure modernisation. But the two main challenges have two different timelines. Integration complexity must be addressed in a very short term, because it is part of the restless technological wave, whereas the legacy infrastructure update takes longer to target.
So what the market now is looking for is a very scalable solution with different milestones in its roadmap that can address short term digital priorities (the Integration Complexity) and long term digital goals (Legacy Modernisation), combining traditional infrastructures and digital technologies.