Recognising the value of a connected enterprise in insurance
Today, insurance companies aren’t just competing with traditional insurers – they are competing with everyone. As customers embrace the omni-channel and personalised experiences being offered by the likes of Apple, Amazon, Google, and a myriad of digital startups, they are beginning to demand those same experiences from everyone they do business with.
This shift is putting significant pressure on insurance companies to think differently about what they do and how they do it. To enable the customer experiences that will be required to be successful in the future, insurers must become connected enterprises.
The status quo isn’t working
Historically, many insurers organised their operations around products (e.g. life, automobile, general), each with a different look, organisational structure, and supporting technology. The challenge with this model is that it is very fragmented. A customer that has multiple products with a company might need to call three different numbers in order to change their address.
Such a siloed approach, and the disjointed customer experience it provides, is no longer an option. Customers know that integrated and personalised experiences are possible because they are getting them elsewhere. Insurers that stick to the status quo will quickly find themselves irrelevant.
Building a connected enterprise
To be successful in the future, insurers need to connect their front, middle, and back offices in ways that respond to the evolving needs of their customers. This means more than linking disparate channels; it means connecting all functions and technologies so they provide the data needed to create personalized offerings and an unparalleled customer experience.
Most insurance companies understand the need to make big changes. According to a recent survey, 75% of insurance companies are making moderate to significant investments in one or more of the capabilities required of a connected enterprise. Of the eight capabilities underpinning a connected enterprise, the areas receiving the most investment are customer experience centricity, seamless transactions, advanced data and analytics, and technology architecture and enablement.
Starting off on the right foot
The transformation into a connected enterprise is a complex journey, and one that can hold many obstacles for companies that are unprepared.
So, what can insurance companies do in order start off on the right foot? KPMG’s Customer Advisory professionals recommend a holistic five-step approach:
- Gather rich customer insights: Before making changes, insurers need to develop a better understanding of their customers – their intent, purchasing behaviours, interactions, and most critical touchpoints.
- Develop products and services centred around customer needs: Rather than looking to match products with customers, insurers need to develop innovative products and services that are customer-focused and responsive to customer needs.
- Identify meaningful customer journeys: Based on customer needs and insights, insurers should identify key customer journeys – the process steps and what customer needs are at each stage of the process. This process is pivotal for identifying activities that require great empathy and activities where customers simply want quick, transactional service.
- Design operations to be responsive and efficient: Using the customer insights built in the first three steps, insurers can redesign their organisation to be responsive and efficient to their customer needs – from using AI to support transactional activities to providing richer human interactions when it matters most, all supported by robust technology and data and analytics. To be effective, this process also needs to include building end-to-end processes to support employees who will need to be agile, think like their customers, and really embrace customer-centricity within their roles.
- Create a robust integrated digital support platform: Based on what they want to accomplish and how they want to engage with their customers, insurers can then develop an integrated digital platform for their organisation focused on providing a single customer view. Such an integrated platform will be essential for service delivery in the future as it will provide the backbone needed to track customers interactions and provide the data required to provide highly personalised customer experiences.
Worth the investment
While shifting customer demand, increasing competition, and technology innovations are key drivers pressuring insurance companies to become connected enterprises, there are strong financial reasons to transform as well. In fact, insurers that invest in becoming a connected enterprise have seen a two times overall return on their investment across many metrics – from overall revenue, customer engagement, and lifetime value to improved marketing costs.
For more insights and developments in insurance and InsurTech, please visit KPMG.
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