The competitive edge for insurers: compressed transformation
March 10, 2022
March 10, 2022
Last year’s disruption in the insurance industry created a greater sense of urgency for accelerating operations transformation. Customers are demanding greater ease and choice in how they engage. Employees are seeking purpose-driven work. And industry leaders are looking to differentiate themselves in the marketplace with improved value, superior customer experiences, and refreshed business models.
So what’s the answer? We believe that compressed transformation is a path to achieving this and more. When we talk about compressed transformation, we’re referring to a strategy that is based on looking across the entire enterprise’s operations, choosing a single approach to the transformation and partner, reimagining the business end-to-end, harnessing technology, and executing with incredible speed to drive down costs, improve the experience for customers, partners, and employees and deliver value over time.
On average, organizations we found to be future-ready showed a 2.8x boost in corporate profitability.
Source: Accenture research; Fast-track to future-ready insurance operations; March 2021
To obtain real value from operations transformation, the critical first step is to solve for each process end-to-end. Insurance companies must reimagine how they execute the process and optimize it for the desired customer experience along with the desired business outcomes. The challenge is time. Results must be delivered quickly. The competition is moving fast, so the key is to move faster. There is no time to study the problem.
A successful transformation embraces human-centered design and digital solutions. Measurable, repeatable, predictable and transactional (MRPT) work can be done by machines, allowing people to take on new roles. This technology-led approach delivers cost savings and value.
Technology solutions can transform core elements of insurance from customer servicing, to underwriting decision-making, to back-office functions. They impact the economics of insurance, including operating expenses and new or retained premium.
A compressed transformation project can be broken down into four main steps.
Insurance companies, that choose to work with a trusted partner to accelerate their total transformation efforts, need to choose a single, strategic partner versus multiple vendors. It speeds up the whole process from onboarding through execution. For example, by using the same approach and platforms across business operations, one partner can deliver synergies across functions, with the ability to continually adapt and add functions as needed. A single partner also establishes clear accountability.
What should you look for in a partner? One that has transformation in their DNA. Ask how their technology platform is powered, what kind of tools they offer and who runs them. They should be able to show that they can readily tap into proven partner networks and use analytics for continuous improvements. Finally, consider how much risk your organization is willing to take on versus how much you want a partner to bear. By spelling out specific cost reduction targets in the contract, you can have cost certainty and a lower risk of execution.
Compressed transformation is about creating a better relationship with customers, taking out costs, and gaining that competitive advantage. For insurance companies to be ready for the future, the answer is to fundamentally reimagine operations from the ground up. That’s challenging, and that’s bold, but that’s what we’re seeing the leaders in the industry doing.