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Enabling Innovation and Digital Transformation in Insurance

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Enabling Innovation and Digital Transformation in Insurance

Five ways to implement sustainable transformational change

Implementing a programme of far-reaching and continual change in strategy, organisational structure, operating model
and process is necessary despite barriers such as legacy technology, outdated procedures and embedded cultural behaviours.

This article examines the critical importance of delivering transformational change for the insurance industry, highlights key challenges that need to be overcome by insurers & brokers, and presents 5 ways to implement sustainable transformational change within your organisation.

Why create an environment which supports transformation?

Simply put, ongoing, continuous and sustainable change is necessary if a business wants to stay competitive. As challenging as it may be, changing an organisation’s culture to promote innovation and disruption will lead to improved performance and safeguard its future.

Transformation is also essential for insurers to avoid the fate of many high street retailers. Those who could not keep up with the march of technology and the shift to online shopping are paying the ultimate price. Household names such as HMV and Toys R Us have gone into administration or closed altogether. Delivering successful transformational change should be on the agenda at board meetings throughout the insurance industry, no matter where companies are in their transformation journey. 

Perhaps most importantly, customers are pressing for change. When a new technology evolves, they expect it to be included in the customer experience across all industries. Minimum expectations in insurance include being able to instantly purchase products and services tailored to individual needs, a transparent and straightforward buying process and an online claims process. Embracing digital technologies is no longer optional for insurers; it is crucial if they want to stay relevant and profitable.

Five ways to implement sustainable transformational change

Insurers are already under pressure to provide customers with a seamless end-to-end digital service, remain competitive and keep top talent while trying to keep up with the pace of technology. Introduce the implementation of a transformation programme alongside day-to-day business practices, and it is easy to see why less than 30% of digital transformations succeed. So, how can an insurance company improve their chance of successfully transforming their business?

From the research conducted for this year’s TINtech, we have compiled the top five ways to implement transformational change within insurance.

1. Break down silos to deliver initiatives

Using agile development methodology to bring the relevant business departments together to co-create products and services removes the frustrations of fragmented development and encourages innovation. Cooperative working methods improve communication and having all relevant parties involved in the development process speeds up delivery of the final product or service.

Adopting Agile for some organisations may mean changing to a product-orientated organisational structure, where dedicated resources from all areas of the business from IT to business development, finance to marketing, focus on delivering business outcomes by product.

2. Have tech-savvy leaders in place

Strong leadership is fundamental to transformational change. If the people leading a transformation programme don't buy into it, employees won't engage with it. Having knowledgeable, digital-savvy people committed to change, both at the top and in change specific positions will have a significant influence on the success of a programme.

Having a chief digital officer (CDO) on board for the short to medium term to support transformation, map out priorities and encourage innovation may also be beneficial.

3. Create an innovative culture

Creating a working environment where staff are empowered and actively encouraged to be innovative is one of the quickest ways of achieving success. Giving employees accountability for the organisation's goals and objectives, then the discretion to do their work within these parameters will forge an innovation culture and help employees feel valued.

Asking staff for ideas on how to improve the business, whether it be the technology, processes or culture will increase their commitment to their work. It will also give the company a pool of options for positive, beneficial change.

4. A new view on communication

If a company is implementing a programme of digital transformation, it makes sense to review current communication channels and replace or supplement one-way communication like email with two-way or team dialogue channels like Slack. Using a team communication tool allows a company to maintain a complete record of discussions relating to the transformation (and future projects) in one place, provides file sharing and can be accessed anywhere through mobile apps.

Encouraging staff to opt for more concise messages rather than lengthy communications can speed up project discussions, and creating simple multiple choice questionnaires for decision making can increase transparency and clarity as to what has been agreed.

5. Make sure change is implemented, not installed

A company can install a new system or procedure, but sustainable transformational change only occurs when it is implemented, and the benefits of it are realised. When it is embedded in the company, and it meets the agreed objectives of making the change. For example, new technology has increased conversion rates or improved customer response times.

In a digital business world, no one can afford to stand still. Changing customer expectations, emerging technologies and new competitors all pose threats to the success of established firms. The difference between the success and failure of a change programme can hinge on whether an insurer will embrace technology and put continuous innovation at the heart of the business.

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