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Insurance Ecosystem Orchestration: Actionable Steps to Drive Business Value

Steve Tesler

Principal, Insurance Consulting
Blog
  • Insurance

Every organization has a different idea of what digital transformation means. Some view it as modernizing current infrastructure; others define it as creating new digital channels for customer engagement; some think of it as moving to the cloud; and others define it as incorporating ‘bots’ or digital technologies, such as artificial intelligence (AI) and machine learning (ML) into systems and processes.

As an insurer, no matter what digital transformation means to your organization, you need to develop a roadmap for achieving the promise of leveraging new and emerging technologies—whichever they may be for your organization. Furthermore, that roadmap should consider how all of your technologies are working together to operate effectively. Next-gen insurance capabilities require digital ecosystem orchestration that provisions leading-edge solutions, enhances service and advisement to market stakeholders and drives the achievement of carrier performance objectives.

Where Do I Start?

To begin, consider how to apply digital technologies to support the core functions of your organization. Having this digital foundation enables greater market-facing opportunities, which leads to better outcomes for both you and the customer.

Start by defining a set of future-ready digital capabilities that will enrich or enhance your operations with a focus on meeting performance objectives. Here are some examples:

  • For Improved Risk Selection: Identify capabilities for providing underwriters with access to richer data, predictive analytics and more refined algorithms that can uplift an underwriter’s ability to make informed decisions on how to price the risk for a better outcome.
  • For Bundling Products and Services: Pinpoint emerging digital capabilities that enable contextual coverages. These should be driven by customer and channel partner insights; access to third-party data to enrich understanding of the customer’s industry, geography and particular exposure; and the ability to identify opportunities for proactive risk advisory services in order to upsell/cross-sell and improve loss ratios.
  • For Improving Claim Outcomes: Focus on analyzing capabilities that support continuous monitoring of exposures through the use of new and emerging technologies (e.g. IoT, sensors, etc.) to detect early warning signs of problems, automate claims intake and coverage determination, and enable predictive decision modeling for claims assessment and fraud detection.
Assessing Digital Maturity

Once you’ve defined and prioritized the set of future-ready capabilities for your organization, the next step is to assess the digital maturity of your current capabilities. We’ve identified three states of maturity to help you categorize them: ‘basic,’ ‘emerging’ and ‘best-in-class.’

In many cases, existing capabilities will be ‘basic,’ where the action is performed manually or with minimal technological support. Some companies have begun to explore different insurtech offerings, various point solutions or home-grown solutions, and have developed proof of concepts that would justify rating the current capability closer to an ‘emerging’ state. Beyond ‘emerging’ capabilities, ‘best-in-class’ are those which are more future-focused and not currently in production at scale.

The next step in the journey is to identify the aspirational maturity for your set of selected capabilities on the same scale from ‘basic’ through ‘best-in-class.’ This is an excellent way to determine where your organization wants to be in three to five years. The expectation is that not all aspirations will approach ‘best-in-class,’ but the scoring will accurately reflect areas of priority for the company.

Developing a Roadmap

Based on the gap between current and aspirational maturity, you can then engage in a road-mapping exercise to select which initiatives to undertake. These should be chosen by assessing the expected business impact that more mature digital capabilities would deliver and how well they align with organizational objectives. Next, look to close these gaps by leveraging existing solutions or developing new ones.

The solutions needed to close the maturity gaps will most likely manifest as a combination of infrastructure modernization, new digital channels for customer engagement, cloud-native solutions and different applications of AI/ML. Whichever combination is right for your organization, they will play a crucial role in orchestrating a digitally-enabled, smart ecosystem to drive true business impact.

Conclusion

Regardless of where your organization is along its transformation journey, it is imperative to ensure that digital transformation is much more than just a technology solution. It is, rather, a potential set of enablers (people, process and technology) that can be deployed to improve and enhance your core processes. The best way to ensure your organization obtains the most value out of your investment in transformation is to focus on defining and developing digital capabilities that directly align with your overall business objectives. By orchestrating these capabilities in a smart ecosystem, your organization will truly be ‘future-ready.’

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