Many life insurers have managed to keep digitization at bay and hang on to their traditional agent-based, manufacturing-led sales and service models, even as other service-based companies have moved into a brave new online world. That won’t last much longer, though. A new digital ecosystem is taking shape within insurance markets, driven largely by new consumer demands for simplicity, self-service, transparency, and choice, and it is affecting every aspect of the insurance value chain. Companies that don’t adapt will quickly fall behind.
Digitization does not mean that life insurers have to completely give up their high-touch, high-information, brokered approach to sales and customer service. Digital solutions such as social media, mobile applications, video, and big data analytics can smooth the transition by tapping into new sources of customer data and making it faster and more efficient for insurers. This, in turn, will ensure customers get information the way they want it, while letting agents address those information needs and decision points that require a human touch.
Embracing digitization can also help life insurers:
- Enhance business processes.
- Increase market penetration.
- Better measure and manage risk.
- Improve underwriting accuracy.
- Deepen customer relationships and enable more trust and transparency.
- Build asset management solutions at lower cost.
BCG can provide life insurers with their own unique roadmap to digitization by taking into account the following four factors:
- The altered ecosystem and new partnership possibilities
- New agile development and innovation models
- Products and services that are more customer centric
- A two-speed IT transformation