Three digitization trends in insurance
Digitization in insurance is somewhat still in progress. Most companies struggle to make use of their unstructured data. Truley functioning global operating models are nowhere in sight. How can a globally operating insurance company come to terms with the difficult relationship between global headquarters and local business units? In particular in light of the need to drive digitization centrally? How to deal with an internationally fragmented landscape of brand and services presentation? And how can an insurance company turn data into profit? There are some trends out in the market that address these pressing issues and put away with them for ever – if applied properly, I might add. Here is my top 3 list for digitization in insurance in 2020:
Trend #1: Operational Excellence
Arguably there has been a lot of talk about this topic. The key question, however, remains: What is the best governance structure for marketing and in particular digital marketing for an insurance company. And certainly, what role should corporate headquarters (GHQ) play for global organizations? Since the business units maintain a strong position those multinational companies, the GHQ should try to act as a coach for them. With the introduction of digital marketing tools, e.g., the Adobe Experience Manager, they need to be rolled-out successfully to principal BUs. Frameworks for effective use are to be put into place. While some larger BUs usually seem to be able to run on their own, the GHQ could act as a coach by creating “augmented teams”. The GHQ would send experts to a BU for a set period, e.g., three months, to lead agile teams applying those digital tools. That way, the GHQ can influence the “good use” of the costly tools while not being labelled as “telling the BU what to do”. The result of the “augmented team” approach would yield an effective operating model by which the GHQ would generate credibility as a coach and expert advisor. The GHQ could also consider a “hub and spoke” model, kind of a shared service center where a bigger BU as hub serves smaller related markets as spokes. This model drives knowledge transfer and exchange.
Trend #2: E2E Customer Experience-led Design
Many insurance companies have alreday started to map out digital customer journeys. The core objective of this execise ist to build a seamless flow of connected customer data (behavioral, transactional, financial, operational, and more). Based on the data, an insurance company can create a superior end-to-end customer experience, resulting in meaningful services for customers and prospects at all touchpoints (service design). Concretely, a central Digital Marketing organization should set guidelines, frameworks and processes (in short a “how to” guide) for the BUs to create personalized, content-led experiences. With the support of the GHQ, BUs will be able to leverage digital tools effectively to deliver results. One of the immediate tasks is usually the merging of a fragmented web/app landscape to a central tool. In driving this process, the GHQ ensures a uniform appearance across all touch points, in particular web/mobile.
Trend #3: Data-driven Business
Insurance companies have collected mountains of unstructured data over the years. Many companies are now in a process of modernizing core systems, but they have yet to tap the full power of that information. While global insurance players have opportunities to leverage data in new ways across all lines of business and in many functional areas, technology and real-time analytics can bring significant value to any organization. In marketing, understanding of customer behavior is key. Any insurance company should therefore create a central data repository/DMP (or Data Management Platform like, e.g., Adobe Audience Manager) to enable customer profiling. These profiles, in turn, can be used to drive the development of new (digital) products. On BU level, an insurance group should use engagement or conversion metrics to create models and recommendations to drive campaign performance and translate internal/external data (both structured and unstructured) for programmatic ad buying and to efficiently reach customers
Insurance companies can reach or secure a position as a global leader if they manage to create a truly data driven business. Digital marketing, as one of the core elements of a data driven business, makes use of available data to create personalized customer communication based on superior content, and to deliver a state-of-the-art customer experience. Smart tools and the right processes and frameworks will allow any insurance company to play a leading role in the global market of personal and commercial lines insurance.