Leading a Digical℠ transformation in insurance – BAIN & COMPANY

Article Synopsis :

Is “Digical” the new “Digital”?

In the research report “Leading a Digical℠ transformation in insurance”, the Bain team use the term “Digical” to refer to the fusion of digital and physical worlds and argue that insurers who offer a digical offering will fare better than those who follow a mono-model of just physical or just digital.  They make a bold statement by saying: “With customers increasingly expecting fairly seamless integration of digital and physical worlds, the Digical transformation is no longer optional”.  They also present two interesting graphs which back up this statement which show that even though the share of digitally active customers is expected to increase over the next three to five years (figure 1), most digitally active customers will also use phone and in person meetings to purchase insurance (figure 2).

The team also argue that many insurance executives face the challenge of not knowing where to start with transformation and how to proceed with making investments. In response to this, they go on to identify and answer four key questions that can anchor a balanced, pragmatic approach for digital transformation for insurers.

The questions discussed in the report are:

1. How much of our business do we need to digitize?
2. What’s the right pace for our digital transformation program?
3. Should our digital offerings be separate from or integrated with the core business?
4. How can we reduce the risks inherent in a transformation?

The Bain team’s view is that the answer to these questions largely depend on the insurer’s point of departure.  They also present an excellent diagram summarising the different stages that an insurer could be at:

They then take this a step further and suggest that insurers take a current state assessment based on the six dimensions outlined below:

• Create digitally enhanced customer experiences
• Build a digitally enabled omnichannel sales and distribution model
• Optimize operations through digitization
• Build an innovation ready organization
• Apply advanced analytics and use Big Data throughout the enterprise
• Activate technology as an enabler of digital transformation

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