This year’s Equisoft customer appreciation event, Elevate, served as a testament to the accelerating pace of digital transformation in the life insurance industry. Luis Romero, Equisoft’s Founder and CEO, set the stage with a speech, emphasizing the theme of the day - "The Power of Integration: Navigating Change and Driving Growth in Life Insurance." In his opening speech, Luis posed a critical question: Can CIOs leverage the existing workforce, tools, data, and APIs for successful digital transformation?
Urgency and Challenges in the Life Insurance Industry #
Luis highlighted the evolving timeline that he has observed for transformation over the years. The significant change is evident: where once timelines were set at a decade, now they span only 5 or even 3 years. The urgency around transformation is evident in every company.
But, McKinsey's findings reveal that while 100% of life insurers acknowledge the urgency of digital transformation, less than 30% of initiatives in the industry deliver customer value.
The “Isolation Dilemma” #
Why is that? In many cases, it’s because these transformation projects are one-offs, conducted in isolation. They are often a case of trying to get a ‘quick win’ or pick the ‘low-hanging fruit’. An insurer, may, for instance, decide to implement a new online sales portal, hoping to reach a new, more digital target market, and increase sales. But when the shiny new front end is not considered as part of the overall digital transformation strategy and plan problems can arise. Behind that digital façade may linger legacy processes that require phone calls, paramedics appointments, and even faxes. The drop off rate during apps is too high and the expected new business growth doesn’t materialize.
That is only one example of a digital transformation phenomenon we dub the “Isolation Dilemma”. Transformation projects launched in isolation from the overall strategy are destined to become orphans.
And the “Isolation Dilemma” is compounded by the anticipated loss of 50% of the workforce in the next 15 years, posing a threat to the industry's knowledge base. This underscores the importance of reevaluating organizational structure and effective change management processes as part of digital transformation initiatives.
Adopting a Holistic Approach to Digital Transformation #
During his opening speech, Luis emphasized the common pitfall of operating in silos, where digitization efforts lack a holistic vision. The success of digital transformation depends on the connection of people, processes, technology, and data. Equisoft’s Elevate event aimed to address this by exploring a holistic and integrated approach to digital transformation, focusing on optimizing the customer journey, connecting business strategy with stakeholders, leveraging technology, and emphasizing the crucial role of data in integrating all of the different implementations contained within a company’s transformation roadmap.
Unifying Strategy, Systems, and Processes #
The core message of the day revolved around uniting strategy, systems, and processes. To overcome the isolation dilemma, Luis outlined how Equisoft is moving away from a major trend exhibited by most insurtechs - disregarding the importance of professional services teams. Luis believes that great technology requires not just innovation but also the seamless integration of people at the core of the strategy. It is for this reason that while Equisoft's R&D team has tripled in size over the last three years, the professional services team has also doubled to ensure effective integration.
Luis also emphasized the importance of additional value services like data integration and migration specialists, UCT, underlining that the successful application of data for AI purposes goes beyond technology alone.
He expressed the need to forge connections not only between carriers, policyholders, distributors, and advisors but also with valued partners. Only through comprehensive connection and integration can full value be realized from each and every digital transformation project. Digital transformation is a holistic endeavor and those companies who continue to treat their projects as a series of disconnected orphans will struggle to realize the benefits that digitalization promises.