Digital transformation is necessary to remain competitive. Irrespective of company size or resources, carriers are looking to adapt to trends and technological advances in order to create more efficient internal processes and a better customer experience.
Digitalization across the board is even more challenging when undertaken by a smaller life insurer with limited resources. Many small carriers and fraternals have few, or even no, IT resources. The prospect of modernizing their aging policy administration systems and implementing digital sales and service solutions can seem difficult, if not impossible.
But it can be done.
Why is digital transformation critical to carriers with limited resources? #
While it’s easier to follow the path of least resistance, disruption and change are inevitable. Smaller insurers must utilize the resources they do have in order to adapt to changing market forces and keep up with the evolving ecosystem. In a recent Equisoft Accelerate webinar leaders from NSS Life and Texas Service Life explain the top 3 reasons digital transformation is critical to carriers with limited resources:
1. It’s important to keep up with stakeholder expectations #
Digital transformation is driven by the needs of stakeholders such as members, agents and insurance regulators.
But, at the same time, as they grow they face increasing regulatory challenges. NSS Life is a small company in terms of headcount, with less than 30 employees. But they have grown from $52 million to #1.6 billion in assets in the last 15 years. And now they find themselves in the difficult position of being a small organization that is treated as a large insurer by the regulators.
Digital Transformation gives them the flexibility to respond to changing regulatory requirements more easily. Easier access to data and adaptable reporting make it possible to stay compliant even with few resources to assign to the effort.
2. Digital transformation as a point of differentiation against competitors #
Small carriers need to remain competitive, even against large corporations. Texas Service Life, for example, started looking at digital conversion as a way to differentiate themselves as a very small company against competitors that were 30x larger.
- Susan Thomas, CEO, Texas Service Life
3. Consumers are already enjoying those benefits from digital experiences in other industries #
Whether its personalized concert suggestions sent by music audio streaming companies or subscription-based meal deliveries, consumers are exposed to highly personalized and efficient experiences in almost all industries. Life insurance consumers expect no less.
Like all insurers, smaller carriers are faced with the challenge of providing superior digital service. They risk losing potential customers, especially in younger generations, if they can’t deliver real-time, online service, straight-through processing of applications, accelerated claims resolution and a host of other transformative solutions that consumers have come to expect.
Digital transformation isn’t just a nice-to-have option for life insurance companies – it’s a requirement if they are going to stay relevant to consumers.
You don’t have to boil the ocean – digital transformation one step at a time #
- Alan Burns, CIO, NSS Life
One key piece of advice for resource constrained carriers undergoing digital transformation is to define your vision for digital transformation. Irrespective of size, it’s important to have a vision for your digital transformation. . It will enable you to map out the process, and make small steps that are always moving the company in the direction of its end goal.
A clear vision for the transformation also has a huge impact on decision making effectiveness. Thousands of important calls will have to be made as conditions evolve during the modernization journey. Not all of those decisions will be clear-cut, easy, or even a choice between good vs bad outcomes.
Your digital transformation vision makes priorities clear and gives you a North Star to guide you towards your destination, no matter how convoluted the path may become.
Most importantly, it’s critical to focus on high priority projects that are low risk, and low cost. This will help reduce the probability of making mistakes. Prioritizing high ROI projects will help people accept and embrace the change coming their way.