Overcoming the key barriers to Digitisation

With digitisation seemingly taking over in a digital era, long-established insurance companies are tackling a new threat in the form of online insurance companies. These new entrants into the market are streamlined, with automated digital workflows providing a customer experience that is seamless and convenient, with this convenience being the main reason behind their sudden rise.

Using new technologies that established firms were either unaware of or resistant to, they have well and truly disrupted the market. This has led to insurance providers honing in on and streamlining three specific aspects of their business. Innovative products, exceptional customer experience, and operating with extreme efficiency.  In our recent industry report ‘2022 Key trends for Insurance firms’, this has also highlighted some key areas where barriers to market may become an issue for many firms in staying competitive’

The established insurers are now all too aware that in order to compete, they need to undergo a digital transformation of their own, evolving their current products and processes, and using automated digital workflows to transform both the way they work and the expectations of their customers.

But the realisation of the need to digitise is the easy part, the insurance industry is  a complex one, so here we’ll be looking at the top five reasons why it’s not as simple as it sounds. 

But, overcoming these inhibitors is key to driving digital transformation and innovation.

Legacy

Insurance is complex, so it stands to reason that insurers’ processes are equally complex. This has led to technology being a major part of insurance for many years, which in turn means that insurers are steeped in legacy technology.

This technology is at the heart of what they do, and every now and again, it will be added to and evolved, but on a smaller, internal scale. By accumulating various technologies and systems over the years, their core technologies can be difficult to integrate seamlessly into automated digital workflows and systems.

Without renovating their core systems, innovation, operational efficiency and development of new products cannot be undertaken. And today’s customers won’t wait for their digital experiences as there are others who already offer this. 

So, while renovating the core may seem daunting, it is essential for progress and development.

Resources

When we’re talking about delivery of products and services, as well as operating efficiently, a major headache for many insurance companies is resources. Insurers are often implementing large-scale IT refreshes in order to keep them up to date, and competing priorities will hinder insurance product delivery and operational efficiency.

To overcome this, to keep core systems operating and to deliver new, exciting and innovative products, both initiatives should have resources allocated to them. A dedicated, cross-functional team can be set up for innovation and creation, while a second team continues with the core responsibilities.

Digital Security

In a digital era, data is both more at risk and safer than it ever has been. While a filing cabinet locked away in a storeroom seems safe, files can go missing, keys can be taken. On the flip side, converting all your data files into cloud-based storage can be daunting, with the perception for many being that your data is at risk.

It won’t be. When it comes to cloud storage, you just need to ensure that your provider is reputable and reliable. Deployment of on-premises secure storage systems not only takes up valuable time and resources but is a time consuming and expensive process to set up in the first place!

In the modern era, data is best stored in the cloud. That is not in question. Looking to set up your cloud storage systems? Contact Restore Digital 

Being Averse to Risk

The mindset required, traditionally at least, in insurance companies is one of risk aversion. This has allowed them, over the years and decades, to generally come out on top with regards to payouts and probabilities. 

This is one of the largest and most prominent barriers preventing digitisation. To become a digital insurer, to truly digitise, they must create all-new models of work, put in place automated workflows, creating new services and models of business.

While they may be wholeheartedly necessary, they bring a huge amount of uncertainty, which is never an insurance company’s friend. In order to succeed in a digital world, they must be open to failure, allowing for low-cost experimentation until they find the formula that works for them. 

While this uncharted territory may seem daunting, the value of digitisation when it comes to products and processes, cannot be underestimated. All it requires is a willingness to fail, in order to succeed sooner. Or, risk being left behind altogether.

Cultural Barriers

It’s often hard for insurance companies to accept unknown outcomes, and this culture of risk aversion is one of the main factors that is preventing them from embracing innovative products and processes.

It’s rare to find an innovative idea that is guaranteed to work, certainly at first. Innovation is all about embracing uncertain ideas and in some ways, the unknown. This goes against every fibre of an insurance company’s DNA, which prefers to work in the world of facts, figures and probabilities. 

To overcome this, an insurance firm needs to have the right people in place, and we’re not saying a clear out is needed, just that the existing team and structure must be willing to evolve, to undergo their own digital transformation. 

Once these hurdles have been overcome, insurers will be able to differentiate themselves from the competition in an increasingly competitive market. Operational efficiency combined with digital innovation is the future.

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