Insurance leaders must approach the IT component of digital transformation in three ways.
- Build the right platforms. To ensure a tech foundation that can support comprehensive change, insurance companies need the right digital architecture and cloud infrastructure. Most carriers today have a complex mix of legacy IT systems, and the idea of completely replatforming them can seem daunting, expensive, and risky. When the scale of the challenge feels that large, leaders are often hesitant to start. The best approach is for insurers to take an appropriately structured look at which aspects of legacy IT to overhaul in order to build a technology foundation ready for the future.
- Become agile at scale. Successful digital transformation requires that insurance companies implement agile ways of working enterprisewide. This means becoming agile in all support processes, expanding the scope beyond IT departments and shaking up the business model so that the company is primed for innovation. In an industry such as insurance—with a high degree of regulation—the drive toward digital requires embedding agility in all functions.
- Designing the tech function of the future. Many traditional IT departments in the insurance industry struggle to keep up with the rate of change. In most cases, business units within companies are driving digital transformation, and IT departments are losing their relevance. Insurance companies, in particular, often have resources that are decades old. To manage the digital shift, companies must bring business and technology together and create a tech function for the future.
To accelerate the implementation of a future-proof IT that is capable of supporting digital transformation, BCG can apply a Build-Operate-Transfer approach: codesign the solution with the insurance company and develop the necessary tech capabilities, operate the new processes jointly, and finally transfer the processes to the company to be performed independently.
Learn how Malakoff Médéric, the French market leader for group protection, used the Build-Operate-Transfer approach to become a truly digital and data-driven company.