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Spotlight on Digital - Mixed views on digital transformation impact on customer experience

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Digital transformation is fundamental to insurers’ drive for customer-centricity and future competitiveness, but a misalignment in strategic goals between boardroom and business is slowing progress, says Rosie Beasley, global senior industry marketing manager, insurance, at Blue Prism.

When it comes to major events that impact people, economies and environments, insurance is firmly on the frontline. In the last few years, the industry – traditionally slow to modernise – has been reinventing strategies and working models to meet the demands of the changing global landscape, from the pandemic to economic and political instability.

Acceleration of digital transformation has become a priority because it directly impacts current strategic imperatives – customer focus, operational simplification, financial sustainability and innovation.

But despite the drive for change, the same challenges that have historically held back insurance providers are yet to be overcome. Legacy systems, data and processes can be difficult and expensive to modernise, and bringing in new technologies to solve these issues can create more problems when they are layered on top of the old.

To take the temperature of the market in terms of digital transformation and automation, SS&C Blue Prism recently undertook a global survey of insurance professionals. In addition, we partnered with Post on a more local snapshot of how insurance companies are using digital to improve customer experience in claims (see pages 14 to 17 of the July 2022 print issue).

The findings show how different perspectives on digital and automation are shaping organisational change, whether it’s the seniority of leadership in a company, or how far a firm has progressed in its digital journey.

Those that have yet to begin their digital transformation journey are wary of change and of what kind of impact it might have on their customer relationships. And those managers closer to the everyday operations of the business view the benefits and responsibilities for digital, and in particular automation, differently to the C-suite.

From our global survey, we revealed that there are significantly different perspectives on the maturity of robotic process automation and intelligent automation programmes, where this technology should be best deployed and what the most pressing challenges are. Getting the real transformational value from automation at scale requires a clear vision and strategic alignment across all levels of management from the C-suite through to process owners, as well as agreement on who should be responsible for driving scale and keeping the programme on track.

Perspectives on embracing change

As part of our survey, we asked insurance leaders at all levels how open their senior leadership is to change within their operating model.

Unsurprisingly, C-suite leaders are most confident in their own openness to change but we don’t see this confidence reflected as strongly in other groups. Some 57% of C-suite respondents believe their peers are extremely open to change in their operating model, whereas 50% of senior directors and just 31% of middle management identified senior leadership as being extremely open to change.

A disconnect between the point of view of senior leadership and those leaders closer to the coal face is not uncommon, especially in large international organisations. Directors and managers may be more influenced by embedded insurance cultures, which can be slow to change. That said, it’s encouraging overall, that change is on the agenda.

In the claims space, opinion on technology seems to be shaped by the maturity of a digital programme and, particularly, when it comes to the internal challenges posed by introducing new technology to the claims process. Claims professionals in companies that offer fully digital claims journeys to customers identify challenges with the overall business model and culture, with getting buy-in from senior management and other functions, and more logistical concerns.

In companies where there is partial digitisation of claims, it’s the push and pull of people versus technology that poses a challenge, alongside costs and concerns with the technology itself.

And in firms that have not yet started a digital journey for claims, the cost of introducing technology to the function is identified as the most significant challenge, followed by executive buy-in and influence, and concerns over technology at the expense of customer relationships.

When the global survey results are broken down by leadership groups, middle management is keener on the deployment of automation in claims (43%) compared with senior directors (39%) and the C-suite (30%).

Identifying the benefits of technology

There’s an interesting shift between the benefits from intelligent automation that are identified today, and the areas insurance professionals think will be beneficial in the future, as indicated by planned investment.

For the C-suite, automation is seen to provide equitable positive benefits across many strategic outcomes, such as data visibility and intelligence, customer satisfaction, regulation and compliance and risk management. For the majority of senior directors, the clear leading benefits are customer satisfaction and retention and data visibility and intelligence. Data is also the biggest positive for middle management.

The global insurance industry is aware of the benefits that intelligent automation can generate, especially for improving the use of data and driving customer experience forward. Yet the majority are not using it at a strategic level just yet. Many are still at the implementation stage of their adoption of automation, with some key barriers to scale yet to be overcome.”

That data is so important is no surprise. Intelligent automation can certainly help insurance companies to manage and mine their massive data pools more effectively for use across underwriting, pricing, claims and risk management. With customers front of mind in insurers’ strategic decision making, another positive outcome of using IA to harness an organisation’s data is that it supports the personalisation and innovation of products and services.

Although data is a key element of the transformation of almost every insurance function, most respondents still plan to scale automation primarily into customer service, risk management and claims. Areas that tend to be more heavily based on data processes, such as underwriting, actuarial and compliance are lower on the priority list.

A strategic roadmap for automation tied to transformation efforts and business goals is critical and in companies where this isn’t consistently communicated and implemented across the organisation, change will be slower.

The global insurance industry is aware of the benefits that intelligent automation can generate, especially for improving the use of data and driving customer experience forward. Yet the majority are not using it at a strategic level just yet. Many are still at the implementation stage of their adoption of automation, with some key barriers to scale yet to be overcome.

But as our surveys have shown, when driving digital transformation and introducing new technologies into the business to modernise the operating model, top-down communication and strategic alignment through the business are significant success factors.

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