Blog

The 5 Characteristics of Highly Effective Digital Insurance Leaders

Joe McKendrick
Insurance Experts' Forum, April 21, 2014

Tanguy Catlin, Pradip Patiath and Ido Segev — all with McKinsey & Co. — recently made a bold prediction on the pages of the Harvard Business Review blog: that digitization will mean really big cost savings for the insurance industry.

“A thoughtful digitization program can deliver up to 65 percent in cost reduction, a 90 percent reduction in turnaround time on key insurance processes, and improve conversion rates by more than 20 percent” for insurers, they write.

 

Also see The Road to the Digital Enterprise is Paved with Data 

However, the industry has a long way to go before it realizes the advantages of digital, they add. Many insurers still depend on legacy systems, and most digital efforts are concentrated on customer acquisition, but lag in customer service for existing customers. Many carriers simply don't have a unifying strategy to go digital.

“Some carriers’ budgets are so fragmented they cannot even tally their total digital spending, while others have so many organizational silos that it’s impossible to get any alignment on digital direction and scale,” say Catlin, Patiath and Segev. “In fact, only 50 percent of carriers have budgeted for long-term digital goals, and just 30 percent have a multi-year investment plan to support digital.”

From their recent research, Catlin, Patiath and Segev identified five common characteristics of highly effective digital insurance companies:

  1. Digital strategy for marketing, sales and service: Leading digital carriers “know their customers so well that 50 percent of their interactions with them are personalized,” the authors point out.
  2. Digital future: Advanced carriers have “placed bets on specific digital capabilities for the future (such as mobile) and have invested to rapidly build those capabilities.”
  3. Buy-in across the organization: “As the organization’s digital maturity increases, many digital functions become decentralized and are integrated into broader business unit activities.”
  4. Digital training and recruiting: Digital leaders have talent experienced or trained in digital business. In addition, Catlin, Patiath and Segev state, more than “60 percent have a rigorous digital training program in place.”
  5. They're willing to experiment and fail: Top digital insurers “reward risk-taking as part of the learning process. They have robust analytics in place, with 85 percent of their digital spend measurable in terms of return on investment.”

 
Also see 3 Things We Now Know About Success in Digital

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

 

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

CIOs: “We Don't Have Enough People to Run Our Mainframes”

Insurers will be competing with other industries for both legacy and “new IT" talent.

4 Ways to Keep Insurance Data Quality Healthy

Continually building trust and credibility in the data is the key to a successful data warehouse.

Customer Experience Trend Watch

Three recent HR moves demonstrate that large life insurers recognize customer experience as a strategic differentiator.

Insurers Have a Lot of Data, But Too Many Silos

Insurers actually have more data analytics resources than other industries.

Are Data Centers Shrinking or Expanding?

Today's data centers are doing far more with much smaller footprints.

Too Much Manual Effort is a Show Stopper

Examining the administrative burden of doing business in the E&S market.

Advertisement

Advertisement