Before tackling how transformation should occur, it’s vitally important to understand why transformation is needed. According to Roland Scharrer, group chief data and emerging technology officer, AXA, it’s because the fundamental relationship between insurer and insured is changing. “You’re building a partnership with the client and you shouldn’t be seen just once a year.” This is part of AXA’s ‘from payer to partner’ strategy.
“The more consumers invest in their connected devices – cars, homes, watches – you’re building a partnership with them,” adds James Barnard, CIO, Aviva tech shared services and divestments. “Everywhere they go, you’re going with them. You’re acting like a guardian angel.”
There’s no doubt that there is certainly much more opportunity through digital transformation to play a bigger role in consumers’ lives – increasing engagement and, ultimately, ROI. But it’s also a place to tread lightly. “It’s important to be led by what the customer wants and where we think we can add value to the process,” warns Anita Fernqvist, UK chief data officer and director of operations, Zurich Insurance. She notes that not every step of every insurance relationship needs the ‘white glove’ treatment. Simple, automated efficiency can add value too.
“That interaction point could be touchless, it could be automated, it could be empathetic – it could be all three,” reveals Chirag Jindal, head of insurance, Americas, ServiceNow. “Insurance is a promise and we have to wrap the narrative of the customer journey with that promise in mind. But how you wrap that around technology to deliver it and let the customer choose – that’s the problem we are trying to solve.” And, he adds, “we have to be cohesive”.
Here is the biggest challenge insurers face. The customer has expectations, set not by other insurers but by the likes of Netflix, Amazon and ASOS. They expect the process to simply work. Getting that process to work end-to-end, whatever happens, is far from simple.
“You have a lot of expectations of an Amazon-like digital experience but insurance is a very complex product and you have to serve the client at very specific moments of truth,” warns Scharrer. It’s something that insurance companies may have been doing for centuries, but while that delivers a huge amount of experience, it also brings with it some significant hurdles.
“For an organisation like ours, the real challenge is updating our core infrastructure, cloud capability, robotics and intelligent automation to bridge what is expected of us by consumers today,” Barnard reveals. Being constantly available, leveraging digital currency and providing a seamless transition into what can, quite often, be 70-plus years of legacy estate.”
So that cohesiveness that Jindal speaks of begins to seem like a pipe dream, given the scale of the challenge. The challenge of bringing a sprawling, global insurer with decades of legacy systems and customer information into a seamless, end-to-end experience in a single, smooth action.
We have to add to this that the insured aren’t just large organisations, they serve a massively diverse audience. “We have very different customer segments and that means one size does not fit all. We have to be really clear about what real-time really brings to customers, for example. In other places, [the importance could be] relationship-led [interactions] with digital interventions, rather than end-to-end,” Fernqvist insists.
At times, it can seem that there are hurdles at every turn. Cloud transformation, for example, is seen as bringing major advances in insurers’ ability to overcome legacy issues, but it too comes with its own set of challenges. “On the one hand, we need the cloud to provide the elasticity of infrastructure, scale and availability,” says Scharrer, “and at the same time you must ensure a high level of data privacy standard.” And still, he adds, transform the legacy environment.
How data is treated in the transformation piece is critical. As a heavily regulated industry, one might argue that insurance actually has an advantage in the face of a data-sceptical public. Its trust is surely baked in as a result of those tightly defined parameters. Fernqvist concurs: “Trust is critical. For us to serve [our customers’] needs, we need their data. We’ve got to be able to handle it in such a way that we’ve earned and retain that trust. Regulation helps us protect our customers and make sure that we’re building with the customer in mind.”
Data governance is, therefore, a key concern and again, due to the often diffuse and complex nature of insurance organisations, not one that is easily managed. “The ethical use of data is very important. We have 18.5 million unique customers and that’s a tremendous amount of data. The use of third-party enrichment has levelled up the playing field but with that comes more responsibility,” suggests Barnard.
Scharrer adds that building a data-led or data-fed culture is critical. He says it’s about bringing “a data-driven culture that’s understood from the claims handler to business decision-makers. Bringing the whole organisation behind that, either through incentivisation or governance, so that it’s protected and leveraged as an asset.”
Of course, it can only be truly leveraged as an asset if the right people can access the right information at the right time. Organising where data is held and how it fits into the multifarious workflows can be a task of mind-boggling complexity, but Jindal has some suggestions which marry closely with how integrating new channels and technologies can work more effectively across the organisation as a whole.
“You need some kind of orchestration layer that can tie the broker experience to the middle and the back offices, and carry that across the value chain,” he advises. “At every point of the journey, everyone should know what the status is. How you orchestrate that has been the biggest challenge that insurers are talking about.” Specifically from a data organisation perspective, he adds: “How do you present the right data to the right person at the right time? You don’t want to overwhelm them. What does a claims agent or customer service operative really need to look at?” Fernqvist agrees, stating: “One of the big challenges with data is figuring out what needs to be centralised but also how we make sure we decentralise to allow innovation.”
Innovation in this context is key. The world is moving fast and insurers need to be able to make the most of the latest technologies – themselves highly dependent on quality data – to stay ahead of the game. Scharrer points out the use of AI to be able to ingest other data sources such as documents, photos and satellite technology to speed up and enrich customer interactions but warns about being too hasty and insists on the importance of data quality. “There has been an expectation that AI solves all our problems in databases and customer journeys. But people are realising it’s still hard work.”
Barnard is, however, undeterred: “Cognitive learning is a really powerful tool. That’s where we start unlocking the value of rich data and that’s come a long way in the last three years.” This whole process, Barnard concludes, “is a really exciting journey that we’ve only just started.”
To find out how ServiceNow can enable digital transformation and improve experiences in your organisation, visit servicenow.com/transform-insurance