Transforming Insurance – Securing competitive advantage – KPMG
Article Synopsis :
Insurance CIO’s charged with building a digital driven enterprise have an immensely challenging task ahead of them. However, with the right strategy in place they can use digital as an opportunity to craft new experiences and create value for increasingly demanding customers.
In the 2014 report “Transforming Insurance: Securing competitive advantage”, the KPMG team explain what it means to be digital and discuss ways technology can help players in insurance markets meet the digitisation strategy challenges and transform their capacity to identify trends, plan, collaborate, and rapidly respond, adapt and thrive. KPMG research shows that insurers and intermediaries are facing five key interrelated issues in the fast changing digital world:
- What it means to be digital and how to operate in a digital world
- How to make the best use of the increased data that the digital world generates
- How to conquer and tame the challenges of the complex web of legacy systems many have inherited
- How to achieve all of this in a manner that keeps the business secure in the face of increased threats to cyber security and, lastly but most importantly
- How to attract and retain the people needed to drive the change this implies – in a nutshell – how to get started.
The report highlights that addressing deeply embedded technology challenges offers competitive advantage for insurers and brokers. The report pinpoints five mistakes that will be vital to avoid while implementing strategic IT change:
- Inadequate focus on the challenges of change
- Absent or unsophisticated governance
- Inexperienced planning execution teams
- Insufficient resourcing
- Risk management monitoring
The report also highlights that digital transformation will require a focused strategy, an actionable plan and rigorous execution and presents the four phase digital strategy framework to achieve the same:
- Phase 1 – Direction setting
- Phase 2 – Customer propositions
- Phase 3 – Business design
- Phase 4 – Execution planning
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Digital Insurer's CommentsAs the volume of new business generated through digital channels is increasing, insurers cannot fail to ignore digital transformation as a performance lever. The framework and outcomes of the digital model differ considerably from traditional models and to remain relevant insurers need to come out of the ‘to digitise’ or ‘not to digitise’ dilemma. Insurers need to set a new standard for performance and identify the key pillars of a digital-driven business model such as customer-centricity, data intelligence, IT transformation, service innovation and agility. The KPMG report aptly highlights the value of proactively managing the digital transformation journey and we believe that the transformation journey will be driven by a combination of transforming customer facing business processes and implementing data-centric innovation around interconnected channels.
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