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Digital Fitness Model in Insurance

The digital revolution is having an immediate and wide-ranging impact on how insurers do business. Consumers want faster service across a range of platforms, and they want products that are tailored to their individual needs and preferences. To keep up with those demands, insurers need to embrace a forward-looking, customer-centric business model that provides customers with anytime, anywhere access to services.

However, they can’t just leap into a digital future. They first need to review their existing digital strategies and learn how to create the most value from current and emerging digital technologies.

The digital fitness model is an approach that helps insurers get a clear picture of their strengths and gaps in 22 key capabilities, which are centered around five pillars:

Customer Centricity

  • Digital marketing
  • Intuitive, on-the-go access
  • Channel consistency
  • Customer profiling
  • Personalized offerings and pricing

Operational Excellence

  • Process orchestration
  • Straight-through processing
  • Operational performance monitoring
  • Componentized product model


Innovation

  • Effective innovation process
  • Innovation partnerships
  • Customer cocreation
  • Fully integrated digital services

IT

  • Real-time insight from rich, dynamic data
  • Dynamic plug-and-play sourcing
  • Flexible infrastructure and architecture
  • Flexible infrastructure and architecture
  • Third-party integration
  • Digital security and privacy


Employee Culture

  • Cross-functional collaboration
  • Decentralized decision-making
  • Test, learn, and share culture
  • Steering of a flexible organization

Based on the information they discover during the digital fitness assessment, insurers can take steps toward building more competitive digital business models.

A Customer-Centric Digital Business Model Starts Here

Diagnose Digital Health

Begin by assessing key digital capabilities through an online survey of functional leaders and executives from all relevant areas. Key questions to ask at this stage include: How does the organization rate its current digital insurance capabilities? What are its current strengths? What weaknesses and gaps exist? The result of this process is a heat map that identifies key areas for action.

Create a Strategic Vision

Now it’s time to define a strategic digital vision. Where does the organization want to be, digitally speaking, in the next five to ten years? What are the critical areas that need to be addressed to reach that goal? The model helps by identifying capability gaps and comparing the current status with strategic requirements. The results of that process inform insurers how to prioritize tasks into actionable steps that lead to the desired digital fitness level.

Build a Transformation Roadmap

Creating a transformation roadmap involves balancing priorities, sequencing and prioritizing initiatives, and securing funding. The roadmap should spell out which areas require action and prepare business cases for each. It should also detail the required time, effort, skills, and responsibilities. A good roadmap focuses on initiatives that will lower costs through greater digital efficiency and counter competitive threats by increasing organizational flexibility and scalability.

Insurance
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