Double the profits: How high-performance insurers can create business value from digital transformation – Accenture
Article Synopsis :
Today, all insurers regardless of their size and markets, run the risk of becoming obsolete by ignoring the digital consumer revolution. Keeping the ever evolving needs of the digital consumer in mind, most have started their digital transformation journey.
In the research report “Double the profits: How high-performance insurers can create business value from digital transformation”, the Accenture team identify the levers and quantify the opportunities for generating value that have emerged for high-performance digital insurers. Although the report is based on research from Europe, we have included it as a review as we believe the insights and messages are equally relevant and applicable to Asia Pacific insurers.
The report answers the question “what is the potential value to be obtained from becoming a high-performance digital insurer” and also reveals how insurers can go about their digital transformation journey. According to their research, most insurers are still unsure what the real potential impact on their bottom lines will be as a result of digital transformation. They conclude that there are a number of revenue and profitability levers that insurers can use when transforming digitally which can:
- help increase sales and revenue by as much as 10 to 15%
- improve the combined ratio by 4-7 percentage points
The Accenture team then plot a road map to help insurers navigate the digital era and realise the maximum benefits from their transformation efforts. As per the report, insurance companies should apply the following four guiding principles to become high-performance digital insurers:
- Guiding principle #1: Get the basics right.
- Guiding principle #2: Define a clear strategy and business model.
- Guiding principle #3: Develop and nurture a customer-first digital culture and organization.
- Guiding principle #4: Test and learn continuously to fine-tune all elements of the road map.
Finally, the report also highlights that for insurers, the key to success will be to achieve a level of digital maturity in four important areas that underpin a resilient and agile digital business model:
- Customer experience
- Digital strategy and transformation
- Marketing and sales effectiveness
Digital Insurer's CommentsIn today’s ever digital business landscape, insurers need to focus on one of the most critical questions – how to adapt their enterprise to reap the real benefits of digitisation? Many insurers, despite being crystal clear about the potential benefits of digitisation, still treat it as a one-off project. We believe that insurers cannot afford a slack approach towards digital revolution and agree with the Accenture team that state “insurers need to move from using digital technologies to enhance existing ways of doing things to transforming their very business models to create long-term value and sustainability”. It’s important for insurers to acknowledge that success in the digital-driven customer marketplace calls for complete re-imagination of business models and we believe the following forces will decide the future winners:
- Digital business and operating models
- Analytics-driven products and services
- Technology innovation, and integration
- Social media and brand reputation
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