Insurance Disrupted – SVIA and Celent Report
Article Synopsis :
Bridging cultural gaps between established companies and digital startups can seem impossible. The good news is that partnerships paying deliberate attention to specific activities are paying off.
“Insurance Disrupted” from the Silicon Valley Insurance Accelerator (SVIA) and Celent explores what is and isn’t working for insurers with respect to digital innovation sharing insights into the following questions:
- What drives the need for digital transformation in insurance?
- What are the key challenge areas in making insurance transformation work?
- What are the most impactful actions insurers and partners can take to increase success?
Key findings of the report include:
- Drivers of digital transformation include real-time customer engagement, emphasis on value creation and product-pricing structural changes.
- Challenges include lack of enterprise-wide shared vision/plans, political/regulatory barriers, and legacy systems which do not align with advanced systems.
- Success actions for insurers include partnerships/direct investments in emerging technology companies to foster innovation, change perspectives and gain a better understanding of customers. Also look to invest in incubator programs outside the company.
The report concludes with specific action steps:
Build a Common Vision
- Work with key stakeholders to develop a vision for how emerging technologies and trends will reshape business models and industry value chains within insurance
- Create a vision of future customers, specifically what outcomes will create value for them in a digitally driven marketplace
- Define emerging technologies, partners, business models, services, data and analytics that will enable the creation of that value
Overcoming Political and Legacy Barriers
- Innovation has to be a top down priority tied directly to the strategic goals of the company
- The CEO must proactively support innovation and hold the organization accountable for it
- Work with key business stakeholders to explore alternative, service oriented models, identifying the impact they’d have if launched by a strong competitor and the advantage gained being first to market
- Establish regular meetings between business stakeholders and innovation teams and partners
Improve Innovation Partnerships
- Assess which emerging business models and technologies will benefit most from partnering, and develop partnerships in the areas that will create the greatest value for you
- Build a cross mentoring program between your company and your partners that helps partners understand your business and helps your company develop a more innovative culture
- Participate in accelerator/incubator programs that give you access to innovation trends (and communities) shaping the future of insurance
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Digital Insurer's CommentsEvery insurer needs to excel in three areas: customer experience, personalisation and on-demand access. These capabilities must be woven into the very fabric of the organization, not one-off projects relegated to the IT department.
Many insurers are incapable of tearing up existing manual business processes and operating models and replacing them with digital versions. Partnering with InsurTechs is a good option for not only acquiring new technologies but accessing new people with in some cases radical mindsets geared to disruptive thinking.
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