My colleagues at Accenture,
Paulo Salomao
,
Puneet Chattree
,
Elske van Erp
, and
Eliano Rexho
have written about the various ways that 60% of the insurance sector will change how it does business in the next 5 years. Their perspectives illuminated urgent areas of investment, including automating ('do it for me') and augmenting ('help me do it better') key business processes with GenAI, setting up the data and technology infrastructure to future-proof against emerging risks, evolving distribution channels towards D2C, and emphasizing the upskilling of talent.
I wanted to build on these perspectives by providing a blueprint that outlines where you could start your change journey - and how to sustain it to create ongoing value.
Insurers that will capture the 60 in 5 opportunity will undergo transformations that are business-led and digital-first. Business-led because capability investments should be made in the service of achieving desired business outcomes. Digital-first because at the heart of the way you engage with customers or agent partners, and the way you empower your workforce will be through digital capabilities. Here are 3 key pillars of a business-led and digital-first transformation:
- Start with defining your strategic priorities & targets and develop a transformation-wide KPI hierarchy that links operational KPIs with Board Metrics. Whether it is driving premium or commission growth (e.g., Cross-Sell, Bind Rate), efficiency (e.g., Cost-to-Serve, Cost-to-Sell), or customer experience/social impact (e.g., Relational NPS), a transformation investment should always be in the service of reaching measurable business outcomes. When considering the 60 – 70% of the insurance value chain that can be augmented or automated that
Puneet Chattree
wrote about, anchoring on your strategic priorities will help you pinpoint where to start. For example, despite the various use cases for optimizing the sales funnel to improve lead generation, a company focused on cost-to-serve efficiencies may start by looking at how to optimize claims handling. It is also important to develop a robust Value Realization KPI hierarchy that aligns department-level operational metrics (e.g., Average Handling Time) with Executive targets (e.g., cost-to-serve). This aligns the organization at all levels, provides leading and lagging indicators on transformation performance, and serves as an input towards getting data architecture right to support business intelligence and reporting.
- Prioritize and design the North Star digital member and employee experiences that will make the biggest impact in achieving your strategic priorities, focusing on the human problem and solving it with technology. Insurers should ask themselves questions like: What are the segments we want to serve (e.g., low-risk affinity groups, young digital adopters, etc.)? What ‘intents’ will these segments come to us with (e.g., submit claims fully digitally, better understand their policy coverage)? What is the desired mix of human and digital channels for these journeys? Through answering these questions, insurers will uncover the tangible use cases across the value chain and thereby identify required technology capabilities. For example, if we know our customers are looking for holistic coverage solutions and a convenient way to buy insurance online, we’ll invest in GenAI-enabled intelligent product selection tool in our online quoter. If we know our adjustors are struggling to interpret vast amounts of PDF documents to make a timely and reliable claims adjudication, we’ll invest in GenAI data synthesization tools.
- Obsess over enabling adoption of new technology and value realization for the business. The building and deployment of strong capabilities does not achieve results by itself. The discipline of Change Management is now a well-established practice with a proven track record that focuses on understanding human and organizational behaviour to maximize technology adoption. It involves being intentional about communications, training, and general stakeholder management to ease the workforce into new ways of working. However, while the concept is generally well-understood, only 30% of executives have confidence in their organizations’ change capabilities[1]. Value Realization is a newer discipline within transformation management that focuses on identifying, articulating, measuring and ensuring progress toward achieving a 360° definition of business value [2]. A Value Realization Office (VRO) sits within the Transformation Management Office (TMO) and serves as the internal strategy team of the transformation, ensuring capabilities are built in service of achieving strategic priorities and that department-level targets, budgets, and hiring plans are defined to capture enterprise-wide value. For example, an insurer who is implementing new lead generation tools should proactively ensure that their marketing team is ready to maximize the tool and that the sales team is staffed up to convert those leads. Combined, good change management and strategic, proactive value realization efforts ensure that major transformation investments get to the right return on investment.
In an environment where insurers are facing external pressures, investment dollars become constrained and highly scrutinized. The points I’ve laid out above, starting with strategic priorities and metrics to track, spending time up front to clearly design the customer journeys that will provide the most value to your organization, and painstakingly focusing on change management and value realization to drive to business outcomes, will help to get buy-in and ultimately lead to success as you embark on the next wave of insurance transformation.
That's my 60 in 5 perspective. These are exciting times! We are always happy to discuss ways to assist you and your organization on your reinvention journey, and how you can leverage a business-led, digital-first approach.
