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PERSPECTIVES


What it takes to be a digital insurer

Mark McDonald, managing director in Accenture Strategy, speaks about how digital technology is transforming the insurance industry.

There seems to be confusion about becoming a digital business on the one hand and digitizing channels or processes on the other. Can you explain the difference?

Digitizing is when information-intensive processes become digital and more connected.

Turning a notepad into an iPad is an example of digitizing something.

Just digitizing something, however, does not make it a digital business. The digitizing process has to be accompanied by a change in operations and mindset.

This transformation will then open up new opportunities to generate revenue, create new levels of customer experience, and attract and retain customers in a much greater way.

How does a company become a digital business?

Organizations will need to invest in digitizing operations and processes—and not just focus on adding new channels.

For example, insurers that digitize their operations for internal efficiencies wind up creating capacity that will end up becoming a waste unless it can actually be consumed or supported by additional growth.

Technologies related to digital will come and go; however, the principles that underlie digital will remain.


How do insurers rank in terms of digital investments and results?

Compared with other industries, insurance is in the middle of the pack.

Insurers lag in changing their operating models, organizations and technology—changes that are necessary to realize the benefits associated with digital technologies.

Where should insurers focus their efforts when building a digital business?

Focusing on the customer is critical and will require insurers to take an outside-in approach.

All of the prior technologies really came from the inside out; insurers implemented these technologies to change the world externally.

Today, digital technology is fundamentally externally oriented and is driven by customers.

How do insurers fit into the equation?

Insurers that are able to connect with their customers more frequently and in an inviting environment—almost like a retail environment—while ensuring their products are easy to understand, will be able to gain the competitive edge.

Technology can support and drive a different operating model and represent a very powerful value proposition that insurers can take to their customers.

How does digital transformation differ from other transformations insurers are familiar with?

Unlike prior transformations that were generated inside the company, digital transformation is focused on changing customer experiences in ways that support growth, retention and relationships.

Digital transformation involves making the migration from just providing products that meet customers’ needs, to providing services and experiences that generate ongoing and ever-expanding relationships.

Insurers need to be prepared for the external forces that will generate internal changes to the operating model.

What happens next in the evolution of digital businesses?

Technologies related to digital will come and go; however, the principles that underlie digital will remain.

The importance of an outside-in approach, combinations of technologies rather than individual technologies, and the connectedness of people will endure regardless of what technology you have.

You’ve said that no matter how good your company is at identifying and implementing technologies, if you don’t have the right people, you can’t be successful. So, what do you look for in a hire?

I’m looking for three things. One is an intense curiosity, because engagement not only keeps you interested, but also makes you interesting to other people.

I think the other piece of it is a confident humility. There are more than enough people in this world stating their expertise. But real value comes from results, and those results require rolling up your sleeves and getting down to business and being willing to be wrong sometimes.

And then the last thing is somebody who has energy but also the ability to monitor and meter their energy.

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