In the past year, we hosted a new season of Equisoft Accelerate webinars featuring over 20 speakers, more than 15 industry partners, and attracting thousands of insurance executive attendees around the world. We surveyed those attendees to find out how they faced the challenges thrown at them during the past year, what's happening today and what their priorities are for the coming 12 to 24 months.
No matter where you turn in the industry‒media, social, conferences, boardrooms‒ customer experience and leveraging data are hot topics. They are the main drivers, the reasons why we do digital transformation in the first place.
But a critical challenge for all insurers, whether Tier 1 giants or smaller fraternals, is that no budget is unlimited, and this means that commitment, innovative solutions, creative partnerships and good decision-making are required to achieve digital transformation.
Why digital transformation is critical #
Even though budgets and resources are limited, especially as the economy tightens up, digital transformation is not an optional activity. In order to meet evolving customer expectations, increase efficiency, reduce costs and accelerate new product innovation, comprehensive modernization, and digitalization of a company’s technological landscape is required.
Digital transformation projects force insurance companies to face the reality of needing to fix foundational layers of their business from manual and paper-based processes to legacy attitudes and behavior.
Many carriers are lagging in transformation implementation #
Polling of North American life insurance execs revealed that 24% of carriers are still in the planning phase of their digital transformation. 48% of carriers have begun but are in the early stages of implementation. And only 28% would characterize their status as being mid-implementation.
Given that digital transformation is a process rather than an event, and may never be truly complete, it’s no surprise that carriers weren’t ready to say they were done. But the fact that almost 75% of carriers haven’t gotten past the early stages of digitalization reveals just how far the industry still has to go in its journey.
37% of respondents are prioritizing legacy system modernization #
With these challenges in mind, we asked attendees to identify their highest digital transformation priorities. Right at the top of the list are policy administration system modernizations, and digital quoting illustrations and the apps followed closely by sales and service portals.
37% of respondents cite resources as a top challenge to digital transformation #
Resource constraints can make digital transformation more challenging and daunting‒in many cases they may be the chief limitation to modernization progress.
Life Insurance execs polled, overwhelmingly cited costs and people resources as the biggest challenge to digital transformation.
Susan Thomas, President, Texas Service Life
Key takeaways: How to solve the resource constraint challenge #
To ensure the success of your digital transformation within your given resource framework, create a full end-to-end project plan that maps out the journey for the next 3-5 years. Prioritize projects in order of highest value with lowest risk and cost. Achieving relatively quick successes will not only jump start your transformation but make it easier to get buy around the company for later phases.
A plan that is driven by a vision for the next 5 years and specific goals gives you direction. The order and scope of projects must be aligned with those long-term targets so that you don’t end taking wrong turns that can be costly and resource intensive.
And, as part of your plan, factor in data migration and conversion. Don’t leave maximization of your data capabilities as an unbudgeted after thought. Even if you plan to take a greenfield approach and stand up new products on a new PAS, you can still include a later phase in your plan for going back and migrating legacy policies off the old PAS and retiring those systems.
Also, examine and plan for which tasks and projects make sense to complete in-house, and which are better outsourced to a vendor or partner. This requires that you are as objective as possible in assessing, not just the costs, but your own capabilities, the resource load you’ll have to endure, the impacts of outsourcing and the experience you have with similar implementations.
Partnerships are a very important way to solve resourcing bottlenecks, and one of the most critical considerations when choosing a vendor to work with is identify those who share your vision, goals and culture.