Technology, market volatility, regulatory obligations, new market entrants… the forces that nudge, shape and accelerate digital transformation are wide-ranging. But in the year that saw a global pandemic sweep the globe, insurance companies have faced new digital transformation challenges and opportunities.

In a recent virtual roundtable with

Tracy Green (Group Executive Insurance, RACQ) , Chris Kirby (Head of Customer Advocacy, TAL) and Gail Jones (Head of Underwriting Technical Service, MLC Life Insurance), we reflected on these challenges and identified three key themes as being critical to digital transformation in insurance: enhancing the customer experience, rethinking data, and how technologies like AI and machine learning can add meaningful value.

On customer experience, Chris summed it up perfectly:

A digital transformation consideration that’s now more important than ever is maintaining strong human connections, particularly at claim time. It’s a highly emotional experience, so digital transformation needs to empower front line teams deliver strong human experiences.

The challenge for insurers, then, is to balance automation and self-service options with access to live agents for those who prefer to connect with their insurer this way. The best-case scenario mirrors successful retailers’ multichannel approaches: allowing customers to interact seamlessly across platforms and channels—be it a self-service portal, SMS service, call centre or app—according to personal preference at any given moment.

Gail pointed out:

Customers don’t regularly interact with insurance companies… often, we only get one opportunity to show what we can do

To meet shifting customer expectations, data also plays a critical role—but perhaps not the one we’d have expected: building trust.

As Tracy said,

We need to have that moral conversation about what data we are going to use. Just because it’s out there doesn’t mean we should use it. That ‘Could we? Should we?’ discussion is so important for every insurer.

While the need—and indeed, the regulatory mandate—to responsibly collect and handle data, then extract and apply insights meaningfully is clear, there is also an opportunity to demonstrate to customers how their data can drive value-adding experiences.

Gail drew the Gmail comparison—an ostensibly ‘free’ service that is essentially paid for with data. Why are users willing to make this trade? Because the service adds value and because by and large, users trust Google to treat their data responsibly. Insurers could take inspiration from this model and consider ways in which customer data can generate equivalent win-win scenarios. Underpinning the success of such approaches will be strong and effective data and analytics capabilities, along with a demonstrable culture of respect for customer data and a desire to add value.

It is also clear that AI offers numerous possibilities for driving new operating models and efficiencies within the digital transformation agenda. From enabling new services and products to powering better underwriting processes or...

delivering exceptional customer service through hybrid human-digital workforces, AI is a transformational force in the insurance space.

Gail cited blockchain products in Asia that have enabled insurers to make automatic, frictionless pay-outs to customers, based on their medical activity.

It constantly checks against hospital records and as soon as covered condition is logged, the money lands in the customer’s bank account without the need for forms or making a claim. That’s a service that can gain the trust of customers, by using technology to do things that really benefit them.

But AI and machine learning are not only drivers for transformation at the front-end. Within Gail’s domain of underwriting, for example, they are major enablers.

Using AI to predict claims helps insurers like MLC to "price better, underwrite better, and ultimately offer better value and service." Chris echoed the back-end case, citing TAL’s AI-supported underwriting platform which analyses claims and decisions and enables the business to identify and rectify discrepancies.

This drives benefits at the customer level, too—and it all comes back to trust.

“When the platform spots a discrepancy and we go back to the customer, that’s a clear win for them,”

Chris explained. “Experiences like this build customer confidence.”

As we look to the post-Covid insurance landscape, digital transformation continues apace but the lessons from 2020 must be heeded: putting superior customer experience at the centre of everything, using data in a way that enshrines trust and drives value, and embracing the myriad the entire ecosystem, from employees to brokers and third parties. In a world of evolving expectations and unpredictability, newer operating models provide the foundation for adaptability—a vital attribute for insurers today

To discuss your digital transformation journey or any of the themes we discussed here, please get in touch.

Abhi Bhola
VP Insurance (ANZ)

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