Many insurers have focused their digital insurance efforts on the customer experience (CX).
Smartphone capabilities, video claims, telematics technology – these technologies have a material impact on how the customer engages with insurance. And, thus far, they’ve largely defined the digital insurance debate.
However, the customer experience is one part of a wider digital insurance landscape. Focusing solely on CX, therefore, has several limitations, including:
- Many data and processes that need to be exposed to the customer digitally are ultimately processed and managed in complex back-office engines; there is an integration limitation.
- Many of these complex data and processes need to be extracted from complex legacy platforms, but that extraction itself is difficult; there is an extraction limitation.
- The customer experience occurs not only through a mobile device or a website, but also through a contact center, email or maybe even correspondence. There is a need for a consistent experience and consistency of data across all channels through which the customer can access the insurer; there is a consistency limitation.
- Finally, underpinning the need for integration, extraction and consistency is an often complex and legacy infrastructure, old hardware and operating software that limits rapid access to data and process; there is an infrastructure limitation.
To complete the digital insurance picture, then, insurers need to address four things:
- Integration to back office systems: Companies need to decide on which systems – whether they be internal (e.g. a policy administration system) or external (e.g. Facebook) – should sit data and processes that customers need to access. Foundational to a digital strategy is the identification of how the insurer will integrate its systems of engagement to other systems.An innovative, best-of-breed claims system at the front end, for example, will provide more value if integrated to back-office systems of record to inform wider customer relationships, and to systems of management for integrated financial management.
- Extraction of data and process from those systems: What data and processes will be extracted from those platforms? How will that data be manipulated and presented? A data strategy underpins a digital strategy. For example, first notification of loss (FNOL) could require data about the customer and his or her insurance policies from several systems.
- Consistency of delivery of data and process across all channels: Across the different platforms through which the customer can access data and process, how will the customer experience the same process and the same data? Much digital attention has rightly been paid to the customer experience, but that customer experience occurs not just through digital channels.A customer that engages with a digital insurance product through a mobile device, tablet or Web site may change her physical address. But if that change of address is only reflected on the new product and not, for example, on the pre-existing legacy annuity product (maintained on a cumbersome legacy system), then the digital benefit is lost. Worse, the insurer is giving a worse service to some of its best customers (those with multiple products), setting an expectation for a digital experience that is not reached. The simple test is whether a data or process change through any channel or any product affects all channels and all products – digital or not.
- The infrastructure underpinning the estate: Finally, furthest removed from the customer is an infrastructure strategy. But that infrastructure strategy is as important as any other aspect of the digital strategy. Cloud infrastructure offers the elasticity required to cope with unusual demand patterns; cloud management software enables modern applications to have release cycles of hours or days, rather than weeks and months.
Digital insurance is the redesign and rethinking of the insurance technology landscape — not just the customer experience or, worse, a slice of the customer experience.
Arguably, insurance has long been a data product which, with the introduction of computers to insurance in the 1950s, started to become a digital product. Perhaps what we are now seeing with digital insurance is the logical evolution and acceleration of technology to those areas of the business that were previously manual. And if that is the case, then maybe it is time to stop talking digital insurance because digital insurance is just insurance with ever less intervention from humans.
Patrick Molineux is UKIN General Manager for Insurance at CSC, responsible for leading CSC’s insurance business in the UK, Ireland and the Netherlands. Since joining CSC, Patrick has worked as a business consultant and project manager in marketing and market development and in sales, sales support and sales management. Prior to joining CSC in 1996, Patrick’s experience consisted of 9 years in the insurance industry working as a business analyst and project manager. He holds a BA in History from the University of York.