Balancing the Building Blocks of Digital

The nature of the insurance business is changing rapidly. No one knows what it will look like in 2027 or beyond. New business models are emerging, as are new ways of applying technology to deliver those models. Customers have new demands and new abilities to judge you. Ecosystems are flourishing along with the need for rapid integration and real-time everything. So, it is no surprise that digitization of the industry is a hot topic. Ninety percent of insurers participating in a recent survey on priorities stated that they are engaged in digital transformation in some form.

We see many stories in the media about insurers engaging in cool initiatives and through our model insurer program have seen hundreds as well. Often these initiatives are small projects focused on the use of emerging technologies such as voice UI, IoT, or computer vision. But the industry is pivoting from seeing “digital” as a project to seeing “digital” as a core value and a fundamental strategic lever to drive financial results.

In fact, technology has become as core to an insurer’s strategy as underwriting, finance, or marketing. However, making the transition from “IT as a cost center” to “IT as a strategic pillar” requires transformation of the IT organization. Before you can reliably introduce the “cool stuff” at scale, there are a lot of less cool, but important areas to address.

Many carriers have made some real strides forward in shifting the model to meet their digital ambitions, creating a more differentiated proposition with sharper tech-focused innovative capabilities, and improving their delivery capabilities. Others are just beginning and looking for a roadmap to help them prioritize.

If you want to do more than just keep your head above water (which results in falling behind digital natives and rapidly-digitizing incumbents), there is a foundation that needs to be put in place. There are three facets to this new foundation:

1.Building or acquiring new technological capabilities.

1.Building or acquiring new human capabilities.

2.Revamping the organization and its processes to mix, match, and deploy these capabilities at scale.

The cautionary tale is that missing one of these domains has the potential to cause the organization to stumble.

An organization that has its technology in order and people with solid skills but no governance will lead to chaos as talented people build what they think may be needed without the strategic oversight. Those that have solid governance and great technology but lack the skills and culture to move forward will feel frustrated with the clear vision of what could be. And those with good oversight and talented people, but an old technology, will simply be a source of frustration as people continue to slog through the legacy millstones.

Today’s IT is more democratized and distributed, more flexible and agile, often virtual but never static. Successful leaders think strategically but are grounded in operational detail.

An organization that has its technology in order and people with solid skills but no governance will lead to chaos as talented people build what they think may be needed without the strategic oversight. Those that have solid governance and great technology but lack the skills and culture to move forward will feel frustrated with the clear vision of what could be. And those with good oversight and talented people, but an old technology, will simply be a source of frustration as people continue to slog through the legacy millstones.

Today’s IT is more democratized and distributed, more flexible and agile, often virtual but never static. Successful leaders think strategically but are grounded in operational detail.