The Connected Business of Insurance
May 17, 2018
For a very long time, everyone outside the insurance industry has been admonishing everyone inside the insurance industry for their lack of digital capabilities. In turn, insurers have been pushing agencies to step up their digital capabilities. There has been a lot of finger pointing going on. For many reasons, not the least of which are customer demand, emerging technology, and InsurTech, digital awareness has moved past the admonishing stage to the embracing stage. Not too long ago, one would have to go a long way to find an insurer or agency that thought digital was transformational. Now, it is the reverse. Only a very small number of organizations are still in the denial stage.
Embracing and acknowledging are one thing, but as most everyone knows, the devil is in the detail. The “how” of digital transformation is the real challenge. At Strategy Meets Action (SMA), we have developed a framework for digital transformation. Putting definitions and execution guidelines around digital transformation is critically important. However, in terms of insurer and agency digital transformation success, the most important thing may be “partnership.” Insurers and agencies must partner for digital success. Both sides of the insurance transaction have a stake in – and influence upon – successful digital execution. And failure hurts both sides as well.
It is easy to say that partnership is important, but how do insurers and agencies see the other’s contribution toward successful digital capabilities? IVANS and SMA conducted a research initiative to delve into many aspects of insurer and agency digital transformation. This blog will not go into all the results – it would go from blog to research paper very quickly. But, there are a few points that are elemental to a partnership theme.
- Digital Strategy
When asked about a comprehensive digital strategy, 65% of agencies indicated that they had digital projects going on, but not a comprehensive strategy. From working with insurers of all sizes, SMA understands that many insurers are in the same circumstance. Given the project nature of digital execution today, it is the perfect time for agencies and insurers to work together to optimize digital capabilities to create seamless, omnichannel processes.
- Partnerships Beget Partnerships
When agents were asked what expectations they have of insurers in terms of enabling digital interactions, regardless of the agency’s size, the majority agreed that establishing partnerships with tech providers that facilitate communications between insurers and their agency was number one. In all good partnerships, one side has strengths that the other partner does not have, which are brought to the relationship for mutual benefit. Insurers, because of size, skill set, and technology knowledge, are in that position. This is a win-win for both sides.
- It’s All About the Data
SMA survey results show that, for the past five years, data and analytics have been the number one or number two strategic initiative for insurers. Coincidentally (and happily), agencies, again, regardless of size, are focusing resources on obtaining data for new insights about customers, improving policyholder service, and improving efficiency. New data will permit agencies and insurers to reach their mutual goals of meeting customer expectations with superior sales, service, and risk management competencies efficiently and seamlessly.
While the survey results certainly indicated some digital and emerging technology differences between smaller agencies and jumbo agencies, this is not dissimilar to insurers of varying sizes. Understanding the differences and positively responding to them is the key, as in any good partnership. Like many industries, silos within the insurance industry have constrained innovation and transformation. A “you do your thing, I’ll do my thing” attitude is a losing strategy when the customer expects both their advisor and the insurer to come through for them. Fortunately, because of maturing and emerging technology and new data sources, insurers and agencies can partner for unified outcomes that benefit both. Two is better than one in life and in a digital world as well.
Karen Pauli is a principal at Strategy Meets Action and has over 25 years’ experience in the insurance industry. Her areas of focus include claims, underwriting, business intelligence and analytics, distribution, and customer management. Karen can be reached at 1.774.462.7820 or email@example.com. Follow Karen @kpauliSMA on Twitter.