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Every insurance company is defining the strategy and

action plans to implement Digital Insurance. In most

boardrooms there is an agreement on the necessity of

Digital Insurance. However in many cases there is no

clarity on the content of Digital Insurance, timeframe of

implementation, dependencies with other ongoing

projects and strategic activities and the scope of the

organizational transformation. The implementation of

Digital Insurance is not easy. It requires many changes in

the distribution and internal organization. The Digital Insurance transformation has to be prepared

carefully to prevent disappointments in Digital Insurance projects and initiatives. In the preparation of a

Digital Insurance strategy the following topics need to be addressed:

- Digital Insurance scope; Digital Insurance is not only about an online quotation, Digital

Insurance is using all available technology to automate the processes and services of the

Insurance company and deliver maximum functionality to buy/sell products and deliver services

on mobile devices and internet portals. A Digital Strategy has to define the full scope of

digitizing the business.

- Target user groups; The users of the digital services are distributors, customers, service partners

and internal staff. Traditionally the scope is distributors, using online portals. Sometimes

customers are in scope and provided with a minimum of self service capabilities. Digital

Insurance is delivering all functionality to all clients and service partners to deliver 24x7 fast

service in product underwriting and claims management. Even internal staff in sales,

distribution, underwriting and claims management will be using the mobile service capabilities

when they are outside meeting customers and partners.

- Growth and efficiency expectations; the question is if Digital Insurance delivers more business

growth, is it just an efficiency improvement by using more integrated technology or is it

necessary to keep up with more advanced competitors. As the industry is a slow adapter of

digital there is no immediate threat from the traditional competition. Digital Insurance will

however bring more business growth as doing business will be easier for distributors and

customers, service will improve and using more integrated technology will deliver efficiency

gains.

- Multi-channel distribution challenges; Digital Insurance requires a multi-channel strategy

where products are delivered to insurance agents, brokers, banks and end-customers. Currently

these channels are more or less in use but most of the time provided with the same products. In

the digital world everything is more visible and Digital Insurance requires a sophisticated

product strategy to prevent channel conflicts and to deliver different products based on the

needs of the typical customers in these channels.

- Local or regional strategy and implementation; In a regional setting the question is if the digital

strategy is a local strategy because of the local market practices and regulations or a regional

strategy. The preference is a regional strategy. Defining a regional digital strategy needs

leadership to convince and align all management teams on the digital principles. Digital

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Insurance is customer driven based on usability, simple processes, clear products and

comprehensive services which are basically the same for all countries with differences in

language, currency, product features and some extra regulatory process steps. The base

mobile/online application is 80% of the work and 20% are country specific features/changes and

therefore a regional development and support strategy is preferable.

- Product readiness; The digital strategy has to determine the products to be sold through mobile

and web applications and related services. The products will be sold using a multi-channel

strategy and need to be clearly differentiated from each other by identifying the customers’

needs in the specific channels. The simple products in for example direct sales channels need to

be pre-underwritten without any unnecessary underwriting steps to close the sale immediately

in as many cases as possible. Products that need underwriting approval, need support

functionality for underwriters to close the sale as fast as possible after approval. An assessment

of the readiness of all products is necessary to determine the digital product strategy.

- Organization readiness; Digital Insurance will change the organization. Marketing and

distribution will be fully digitized with more opportunities to reach potential customers. Service

has to be improved with Digital Insurance and will need more dedication to deliver excellent

support to customers 24x7. Operations will change where processing centers for policy issuing,

policy changes/endorsements and claims management will be downsized due to the automation

of all processes. The question is if the organization, culture, management and staff are ready for

this transformation. Do not start Digital Insurance projects before there is full alignment and

understanding of the consequences to prevent project failures.

- Distribution and marketing positioning; Digital Insurance will put the CMO in a leading position.

Selling products will be easier with no/less paper and tailored products for the customer.

Services will be digitized and supported by call centers and service personnel “on the road”.

Digital marketing will boost the business growth with more information of customers, social

media and internet marketing services made available by Google, Facebook, etc. and the

possibility to reach every customer through the mobile and online applications with tailor-made

products to increase renewal, cross- and upsell rates.

- Claims management; Digital Insurance enables better claims services. Fraud detection will be

easier with more information of the customers, distributors and other available external data.

Business rules will based on all available data to detect possible fraud and pay claims faster by

automating decisions, verification, approval and payment steps in the claims processes.

- Social media integration; Social media integration will enable the company to find leads and

determine up- and cross selling opportunities by selecting data from Social media feeds and

push important lead and social data into the customer database for use by distributors.

Implementing social media integration will therefore definitely grow your business.

- Mobile and web solutions requirements; The question is if a web application is required. A

mobile application could be sufficient as everyone has a mobile device and the sales of mobile

devices will overtake the sales of laptops this year. The functionality includes sales and lead

management, customer relationship management, quotations and illustration, self-service

functionality for changes, endorsement and renewals, claims management, approval

management, underwriting and claims support and approvals, document and case

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management. The sequence of delivery has to be defined based on the needs of the

distributors.

- Required competences and available skills; Digital Insurance needs different kind of skills in the

organization from marketing to IT. Digital Insurance is not a technology implementation but a

business and organizational change to increase business growth, improve service and

profitability. The technology is available, the organization has to make a big change in

marketing, sales, traditional processes, products, underwriting practices and claims handling.

Without the required competences and culture change Digital Insurance projects will fail. The

strategy on organizational and culture change has to be defined before and aligned with the

technology change.

- Current internal and external issues; last but not least is to consider if the current issues are

blocking a digital implementation or can be isolated from the digital strategy and managed

separately or solved by the digital strategy. However it is not advisable to create to many

dependencies on a digital implementation to prevent dependency issues later in the

implementation.

- Timeframe of delivery; The timeframe of the first delivery should be fast. A full digital

transformation will take a few years and therefore it is recommended to split the total

implementation into small deliverables which could be delivered in 3-6 months. Start with a

mobile application connected to a transactional database and build more functionality and

integration after successful implementation, acceptation and use by distributors.

The conceptualization and implementation of Digital Insurance requires a good understanding of the

scope, content and strategic targets defined by the digital experts of the organization. When the

scope is too small, content is unsatisfactory and targets are too ambitious digital projects will fail.

Before you start make sure that there is a good understanding and alignment on delivery

expectations as well as the business case. If topics are not clear, do not start and ask for more help

from external experts to detail the Digital Strategy.

Digital Insurance Strategy

TransInsure Consultancy

Paul de Bruijn

Singapore, October 30, 2013

First edition V2

© TransInsure

© Paul de Bruijn

www.transinsure.net

www.pauldebruijn.com