The insurance companies that lead in the digital era won’t replace humans; they will augment them instead—intertwining technology, people, and processes to get the most out of each.
In today’s insurance industry, the ingredients for success aren’t a secret. Digitization, analytics and AI, and a deep understanding of the customer are no longer optional. Yet few insurance companies have been able to master the recipe.
Customers expect insurers to respond faster, better, and in more personalized ways. Meeting those expectations means becoming what we call a bionic insurer: an insurance company that combines human and technological capabilities to spark efficiency, innovation, customer satisfaction, and growth.
According to BCG research, the insurance industry is one of the least digitally mature industries. How can insurers close the gap—and serve customers better?
The key isn’t simply to embrace technology in insurance but to apply the right levers in the right ways. To help insurers do this, BCG combines expertise in insurance consulting with deep knowledge of new technologies and approaches. We can call upon a unique array of global talent from a dedicated insurance practice and such specialty businesses as BCG Platinion, BCG GAMMA, and BCG Digital Ventures.
The key levers include:
Value Creation and Growth. In an industry often seen as slow and complacent, investors are responding to bold moves. We help insurers identify the strategic partnership agreements, technology investments, and M&A deals that spark growth.
Customer Centricity. We help redesign the customer journey from the customer’s perspective, so insurance companies can improve response times and quality while providing seamless interactions, greater transparency, and personalized service.
Downcycle Management. As seen in previous downturns, those who take on a proactive mindset can emerge as winners. Our industry experts combine with BCG TURN to deliver short-term impact and fuel longer-term transformation.
Data Analytics and AI in Insurance. At its core, insurance is a data-driven business. We help insurers leverage data science—particularly AI—to master insurance analytics and transform decision making.
CFO Excellence. Today’s insurance CFOs must deliver business intelligence and insight while maintaining tight control over financial data. With BCG’s Center for CFO Excellence, leaders can achieve the highest standard of performance and efficiency.
Productivity. COVID-19 spurred insurers to focus on five key areas requiring a digital response: distribution, customer service, operations, organization, and claims handling. We help identify—and make—productivity improvements that quicken that response.
Complexity Reduction. Insurance companies often have a myriad of offerings and business lines. We help reduce complexity—in products and processes—to create a foundation, and drive momentum, for digital transformation.
Agile Ways of Working. Agile enables teams to move faster and with greater autonomy. We help insurance companies adopt agile at scale—and accelerate product development.
Systems Migration. Legacy IT systems—an insurance industry staple—don’t play well with digital offerings and end-to-end customer journeys. We help insurers modernize their tech stack without starting from scratch.
Using these levers helps insurers advance and become bionic. We’ve found that the best way to help insurance companies become bionic is to become bionic ourselves. So BCG blends its expertise in insurance strategy consulting with a set of proprietary tools:
The Insurance Excellence Benchmark enables insurers to analyze their performance along key dimensions, including customer centricity, IT efficiency, FTE efficiency, and digital readiness. Using data from a wide variety of insurance companies, BCG’s benchmark helps insurers identify—and close—competitive gaps.
BCG’s Digital Acceleration Index helps insurers uncover their digital strengths and weaknesses—and see where they stand in relation to industry peers. The idea: to identify and prioritize focal points for improvement as well as to accelerate digital innovation in insurance.
The BCG insurance profit pools tool is a market-sizing and forecasting model for life, property and casualty (P&C), and health insurance. Covering roughly 100 countries, it enables insurers to determine what major market shifts they should prepare for and what geographic markets and product lines they should enter—or exit.
The Fintech Control Tower keeps tabs on innovation, disruption, challenges—and challengers—in the fintech ecosytem. It continuously monitors the latest trends in the industry and new entrants to the landscape. The tool provides deep dives into such emerging technologies as blockchain and new business models and processes.
BCG has partnered with insurers around the globe, helping them improve customer experiences, develop sustainable strategies, and undertake large-scale transformation. For example, we helped one of the top three German mutual insurance companies deal with the torrent of COVID-19 related claims. In just 17 days, we built a digital tool to enable agents to advise customers, which relieved pressure on call centers while maintaining the option for clients to speak to an agent for more personal advice.
Here are some other examples of our bionic approach to insurance consulting:
Generali Italia understood that process automation isn’t just about technology. It’s also about what customers and employees need from those processes. By helping Generali deploy smart process automation, we also helped it realize a vision: to become a lifetime partner for its customers.
Generali Deutschland, one of the biggest insurers in Germany, wrestled with consistently low interest rates, complex distribution channels, and a diffuse leadership structure. We collaborated with the company to rework its life insurance strategy from the ground up, boosting profitability and positioning the firm to thrive
To reignite growth and boost returns, insurers need to fundamentally rethink their business and operating models.
The COVID-19 pandemic—along with the new reality taking shape because of it—has created a clear mandate for insurers: deal with the rigors of the present and the near future while starting to prepare for challenges and opportunities over the longer term.
Companies that embrace AI at scale, expand their digital platforms, and optimize their distribution economics will emerge from the COVID-19 crisis stronger.
Most insurers are underinvesting in digital initiatives and are steadily falling behind the industry’s “digital champions”—companies prioritizing those investments and building digital organizations.
A look at the record-breaking year in InsurTech (emerging trends, innovative business models, and the most disruptive technologies) using a data-driven view of InsurTech globally through products, investments, and geographies.
Reconfiguring the company around journeys does more than improve the customer experience. It advances digital transformation and strengthens the capacity for ongoing change.
