How to avoid being a digital transformation laggard

by  Roi Agababa  |  4 Jun 2019

Embracing cloud-based systems can be the first step to bucking the insurance sector’s slow technology adoption trend

There’s a struggle going on inside almost every insurance firm right now.

Leaders in the sector are constantly bombarded with advice that they need to embrace digital in all its marketing, distribution and architectural guises but few know exactly how to embrace digital transformation in the most successful and efficient way.

The insurance sector has been relatively slow to feel the digital effect, according to consultancy giant McKinsey, thanks to regulation, large in-force books and the fact that new entrants rarely have the necessary capital to take insurance risk on their balance sheets.

And our new research backs this notion up. Nearly one-third of respondents (29%) to our survey stated they did not have a digital Business Intelligence system in place while little more than a third (36%) had a Customer Relationship Management (CRM) platform.

Perhaps more worryingly, a quarter of those with a digital (25%) or CRM (24%) system in place found it difficult to use and therefore it was heavily under-utilised.

This suggests the insurance industry has further to go than people perceive, but there is hope.

Thinking ahead

Nearly two-thirds of our 102 broker, insurer and MGA respondents anticipated an increase in their IT budgets, which suggests that most companies appreciate the potential benefits that effective technology can bring to a firm.

With spending on global insurance IT set to hit $104Bn by the end of this year, according to consultancy Ovum, it looks as though insurance firms are seeking to become intelligent, data-driven entities that harness technology to help run and grow their respective businesses.

A hugely important finding in our survey was that one in five brokers (20%) are using four or more different systems to manage their day-to-day operations. That’s simply too many. What brokers, insurers, and MGAs need to embrace is a cloud-based system that integrates all their business processes in one platform.

Simplicity equals success

Operating from one platform enables firms to free up time to analyse insights from their customer data that could present growth opportunities. That’s the real power of digital transformation.

Cloud-based solutions, such as Novidea’s, provide complete front and back office functionality and cover the entire insurance lifecycle of each and every client.

Being able to simply and quickly get a 360-degree view of a business helps decision-makers focus on the truly important parts of their offering. Without having to master multiple digital systems just to complete a client’s records, an end-to-end solution allows business leaders to focus on providing high-quality, personalised service and the ability to identify new growth trajectories.

Data, analytics, automation and machine learning are quickly becoming commonplace within insurance and other industries, and those grasping the potential of these powerful forces are already forging dominant positions.

When rivals are putting in place bespoke products for clients informed by consumer data they have harvested or are defining their driverless car policies, you don’t still want to be using multiple systems just to log a client’s information. You need to change that now to thrive in the future.