The pandemic has revealed gaps in P&C technology strategy
Disasters—such as pandemics—have a way of revealing the need for change. That’s why digital transformation advanced five years in about eight weeks. Businesses of all sizes have embraced digital sales and service, and due to lockdowns, just about everyone has experienced the increased need for digital engagement, with expectations only rising.
For property and casualty insurance, the pandemic has brought digital strategies and investments into sharp focus and revealed, in real time, which digital investments are delivering high value and which are not. It has also exposed our gaps and elevated certain capabilities that were once perceived as less important.
Four must-have investment emerged as focus areas in 2020: digital platforms, digital payments, digital communications, and cloud computing.
1. Digital Platforms
It is essential to accelerate the digital enablement of sales and service capabilities for policyholders, agents, and brokers with a modern platform that moves beyond the limitations of yesterday’s agent and customer portals. Digital platforms will enable new servicing, sales automation, and straight-through-processing (STP) by leveraging transformational technologies like artificial intelligence, bots, IoT, and wearables.
An effective digital platform will foster digital engagement and collaboration among customers and other stakeholders; increase speed and agility for introducing new products; and allow for easy connection to new business models, data sources, and partners.
2. Digital Payments
There is a renewed urgency to transform inbound and outbound payments by moving away from paper checks and payments and creating digital experiences and virtual payment capabilities. Digital payments are crucial to delivering a highly tailored customer experience as well as improved operational performance.
For inbound payments, insurers should consider implementing a wider variety of payment methods and channels, automated communications—such as payment reminders and confirmation—and integrations with modern billing systems. Other considerations may include mobile payments and the ability to set up and schedule recurring payments.
For outbound payments, insurers should invest in systems that allow them to issue payments anytime, anywhere, and through digital channels. In addition, they should seek to offer payment notifications for claimants, third parties, and policyholders; introduce or enhance documentation and explanations that accompany payments; and consider utilizing a payment hub that allows for the easy addition of new payment options.
3. Digital Communications
Digital interaction and delivery for communications with prospects, agents, and policyholders are increasingly essential. This includes digital communication tools like chatbots, voice, and business texting as well as the tools to capture, create, and manage forms, documents, correspondence, and messages to support interactions.
Insurers should seek to optimize and enhance their communications strategy by taking an enterprise view of digital communications as a central component of the overall digital transformation strategy. They should seek a deeper understanding of customer journeys and communication preferences, experiment with communications options internally to understand the benefits of each, and ultimately weigh the value of these options versus the effort involved in implementation.
4. Cloud Computing
Core systems—some of the most critical systems in the enterprise—are now being commonly deployed in the cloud. Cloud computing will allow insurers to offer virtualized, managed services to customers and distribution partners regardless of physical location. It will also allow insurers to decrease their reliance and need for onsite resources as well as create new environments to dynamically test changes.
Digital transformation is set to continue in 2021
Has the pandemic stalled digital transformation? According to our Q4 2020 Market Pulse findings, if anything, it seems the pandemic has had the opposite effect, with 59% of personal lines insurers intending to accelerate their digital strategies and investments throughout 2021, and 28% of commercial lines insurers echoing the notion.
So, what are your organization’s plans for digital transformation? In which of these areas will you invest? Visit our Carrier Consulting page to learn how we can assist you on your digital journey.