Earlier this year, Reuters Events and IBM hosted an online, private roundtable session alongside a number of senior representatives from major carriers including Allstate, Co-operators, Desjardins, Foresters, TD Insurance, Zurich and more.

The discussion was focused on the future of our industry, specifically how carriers can be agile and customer-centric by reimagining operating models, services, and the customer experience.

The Roundtable welcomed Christian Bieck, Global Research Leader, Insurance, IBM Institute for Business Value, Bea Elbert, Global Insurance General Manager, IBM and Karlyn Carnahan, Celent Analyst, Head of Insurance, North America to lead the open discussion, and uncover how carriers are addressing the challenge of improving customer experience by taking a closer look at their processes, culture and technological capabilities.

As customers are increasingly digitally native in their everyday lives, many insurance institutions are under increased pressure to transform their business models from purely transactional to forge much deeper relationships with customers. Antiquated processes and systems are hindering the ability to innovate. The challenges of COVID-19 have amplified concerns over employees’ well-being and business continuity.

2020 has brought digital transformation under closer scrutiny than ever before. Of course, the real driver behind this is the need to improve the customer experience. It is the key battleground that allows carriers to differentiate their overall service in a highly competitive market. Defining how a great customer experience should and can be built is no easy task, however. It demands a broad set of digital capabilities, a robust integration layer, a mastery of available data, and crucially the selection of applicable and value-boosting partnerships.

Christian underlined the importance of perseverance when embarking on this journey. ‘Insurers cannot hesitate in focusing on how the experience can be improved but must have a culture that drives this constantly. Digital transformation is but one key component of the piece.’ According to a recent study overseen by Christian, carriers are viewing the customer experience as a rising priority, not least encouraged by the unique circumstances of 2020. ‘This has to continue, hand in hand with a digital transformation program in order to guarantee future successes,’ he adds. USAA was cited as an example of an insurer that is certainly in the leading pack when it comes to providing a seamless experience, prioritizing the needs of the customer and having a mature operation to support that. Karlyn agreed and added that ‘it is the unique management culture within the organization at USAA that allows their successes.’

"Insurers cannot hesitate in focusing on how the experience can be improved but must have a culture that drives this constantly. Digital transformation is but one key component of the piece."

Christian Bieck, Global Research Leader, Insurance, IBM Institute for Business Value

Bea thought that Covid-19 has forced the industry to move, mainly in terms of digitization and cost pressures. ‘There are three areas that insurers globally are focused on for growth,’ says Bea. ‘One is client engagement; how they’re enabling that through multiple channels. Secondly, as clients are understood better, how do we provide more personalized products and services to our customers? Lastly, building on client insights, how is the broader ecosystem refined, with partners, competitors, suppliers etc, so that an expansion process can continue, and deliver on growth?’

“Covid-19 has forced the industry to move, mainly in terms of digitization and cost pressures."

Bea Elbert, Global Insurance General Manager, IBM

When the areas of focus are broken down, from Karlyn’s perspective, we see several pieces as vital. ‘Technology is one component. Is the architecture set up? Do you have the correct tools to achieve what you are shooting for? Do you have the ability to orchestrate your data appropriately? On the process side, can we prioritize effectively? Can we have governance? And also, is the culture of innovation there; is it OK to fail? Technology, process and culture are the building blocks for innovation.’

“Technology, process and culture are the building blocks for innovation.”

Karlyn Carnahan, Celent Analyst, Head of Insurance, North America

Karlyn also built on the point of ecosystem that Bea raised earlier in the session, citing AXA XL as a company that has successfully built on simple insurance services, products and claims; a company that provides a broader set of services, concierge after a claims, services before a claim for example. ‘To enact these innovations, carriers must build agility’, Karlyn warns. ‘And that comes from data,’ adds Bea. ‘Data is the key to allowing agility to prosper. Carriers look to having mastery over both their internal data as well as expanding their capabilities to utilize data externally, as to provide the necessary insight on customers and provide relevant products and services. This in turn builds trust.’

From the group discussion it was clear that to support a program of digitization, carriers are welcoming new partners and the capabilities of insurtechs into the mix. Often this results in pilot projects, but the salient point was made that, ‘scalability’ is the difference between success and failure. The question thrown back to the experts was, how exactly is this realized?

Using data-driven decision capabilities as part of the process is key according to Bea. ‘On top of that you can then bring in the innovative technologies, chatbots, cloud, IoT. But it’s the proven methodologies related to the early construct of new products and processes that remain most important.’

Christian underlined the importance of ambition from the outset and how a leadership culture that supports growth and expansion into new digital territories is so important. ‘Do not be afraid of self-disruption, it must be faced as part of the digital transformation journey… It’s a remodeling process that causes constant change that has to be accepted within the insurer’s culture. Innovation is not a department but a culture, and this is what we have to be aiming for.’

“Innovation is not a department but a culture”.

Christian Bieck, Global Research Leader, Insurance, IBM Institute for Business Value

The industry is going through a huge transformation. Part of the challenge is meeting the customers’ expectations which are only becoming more complex and demanding as time goes on - certainly, when the insurance industry is compared to other industries that have exceptionally high standards. The overarching expectation that our customers require is ‘simplification.’ As carriers we can try to ‘not be all things to all people’ as Karlyn puts it. But the real challenge is how do we build trust and align expectation and perhaps we need to look at how we measure this and how we monitor the processes. 2021 will reveal how we as an industry will move a step closer to seamless experiences.

Additional Resources:

Elevating the Insurance Customer Experience from IBM Institute of Business Value, October 2020

Insurance 2025: https://www.ibm.com/thought-leadership/institute-business-value/report/insurance2025

Solving the customer relevance riddle: https://www.ibm.com/thought-leadership/institute-business-value/report/aiinsurance

COVID-19 and the future of business: https://www.ibm.com/thought-leadership/institute-business-value/report/covid-19-future-business
 

Graham Proud
Global Head of Insurance Collaboration
Insurance
Reuters Events

Tel: +44 (0)20 7375 7221
graham.proud@thomsonreuters.com