Extraordinary change is taking place throughout the insurance industry and everything that surrounds it.
The whole world is going digital. It’s a new reality, and there is no getting around it. But just the word or even the idea of digital has many people, insurers included, pondering the basic and fundamental questions:
- Why do we need to be digital?
- How do we go digital?
- What, exactly, is digital anyway?
To get a visual of what digital means for insurance, look through the lens of digital transformation.
Defining digital is important because it’s a very broad topic with far-reaching implications. Simply put (and without getting into the science behind it), digital is a way of doing things. And becoming digital is a state that will be required for moving around in the digital world: communicating, shopping, traveling, doing business, keeping a competitive edge and much, much more.
Digital is such a broad concept that it is easy to get too narrowly focused on just one part of the everything that makes up digital. For example, digital is a format for storing assets of many kinds; it’s a way of transmitting data and information from one place to another, and it’s a way of interacting with data. But that’s not all. The digitization of assets is just the first phase or step on a pathway that will lead to the next phase of digital: creating the digital experience.
The experiential phase of digital begins when digital assets come into use. Now digital becomes the method that undergirds the interaction. Digital assets are transmitted digitally to create digital experiences via portals, mobile apps, websites, sensors, wearables and many other digital things.
In the third phase, digital transformation, digital presence, and capabilities go beyond to an expanded and progressive digital experience that touches everything, connects the parts, resets the expectations, broadens the horizons, and transforms the lives of everyone it touches.
For insurers, the journey of digital transformation will involve rethinking an insurer’s value proposition and internal business operations, embracing data and advanced analytics, creating and supporting all means of engagement and automation across all the company, and delivering enriched customer solutions that are thoroughly integrated with internal operations as a seamless, personalized experience from start to finish and everywhere in between.
Digital is the thread that will connect and unite all systems, processes, and strategic initiatives and tie them together into an enterprise that is ready for the future. And digital transformation is the strategic initiative that will set the foundation, set the context, and set the direction for the next-generation insurance company.
In the new report, Digital Transformation in Insurance: Discovering the Pathway to Digital Maturity, SMA introduces its Digital Maturity Model, a model for developing a digital strategy that will be fundamental to success in the digital world.
Author: Ded Smallwood