The pillars of the digital transformation of Insurance companies

The pillars of the digital transformation of Insurance companies

According to the study, companies in the sector face several challenges. One of the most relevant is the new digital context, which requires changing the way we work and manage talent. This new reality creates the necessity to build new management skills and practices aligned with those used by new players in the sector. An example of this new model are the insurtech startups (whose global funding reached $ 3.1 billion in 2015 according to the everis report: Panorama Insurtech).  Insurers have to combine these new capabilities with those they already have in order to maintain their leadership position.

Digital Foundation: developing agility in the organization

First of all, insurers starting this process have to provide the necessary structures and management mechanisms to boost the development of digital activity and accelerate their transformation.
In recent years, insurers have used different initiatives linked to the digitization of the customer experience and internal processes. Generally speaking they have done so without a great sense of urgency. This required the provision of structures that helped traditional business evolve in the digital world in a progressive way, addressing an incremental digitalization with a focus on processes, products / services and customer interactions .

As far as the organization is concerned, digital activity has generally concentrated on one or two commercial and operational units, creating the Chief Digital Officer (CDO) and driving key functions such as digital marketing, analytics Data, innovation, design and customer experience. Other companies have created digital hubs, integrating digital business operations such as enabling and advisory functions.

At the moment, opportunities are only within reach of those companies that know how to move quickly and intelligently. To take advantage of such opportunities, organizations must evolve towards ever more agile and fluid models. They have to facilitate the rapid movement of internal and external talent to work around new initiatives that are developed within very short cycles.

Next Gen People: attract and engage new professional profiles

According to data from Unespa, 97% of the workers in the insurance sector have an indefinite contract, while the average contract duration is the longest in Spain after that of Public Administration, Education and Health professionals. This contrasts with the impetus that technology is giving to a new model of company-employee relationships. In a few years, the number of permanent workers will be lower than that of collaborators who participate in projects through open talent platforms, fostering diversity and flexibility. The companies will move from hosting professionals who develop their entire career in the same company to generations working for several companies at once.

This new reality will require HR areas to be able to facilitate the integration of such talent through a new approach to management practices. Processes such as recruiting, selection, performance evaluation, compensation and commitment management will evolve towards models supported by social technologies which will incorporate attributes such as the elimination of physical barriers to access talent, instantaneous feedback in real-time and the predictive ability to make decisions proactively.

This new version of talent offered by the digital world means that the center of gravity for talent management begins to move towards the employee, who increasingly has more autonomy, control of and responsibility for their professional development. This paradigm shift requires companies to visualize and manage their employees and partners with the help of experiential models.

Living Digital: generating digital awareness to facilitate transformation

The paradigm shift that we are experiencing levereages not only on technological but also socio-economic and demographic factors, and in general, has moved from society to the world of business through changes in the habits of consumers. This inturn has accelerated the emergence of new business models that challenge the status quo of organizations. Curiously however when those very consumers, with a proper understanding of the digital reality, are employed by these companies they seem to lose their awareness of this reality. This is a great challenge for organizations and one of HR´s main responsibilities in the cultural transformation process.

Companies must address this process of change of mentality through different initiatives supported by communication and employee involvement. The digital values model needs to be consistent with expectations concerning: participation, horizontality, transparency, experimentation, openness, etc. In short, it is a question of the employees not only understanding but also experiencing the true meaning of the digital phenomenon.

Workplace of the Future: Aligning Methods, Tools, and Workspaces

The uncertainty and speed of change that characterize the digital age has led to the emergence of much more action-oriented work methodologies. In many cases, the decision making process originally driven by knowledge and business cases is now predominantly based on  experimentation and learning.

Spaces and new work tools become facilitators of the new processes and methods to be applied, and an asset to attract digital talent.

In addition, Artificial Intelligence and Robotics will help technology not only act as an enabler, but also play an increasingly active role in the development of business activity. This reality requires a new way of orchestrating the organization, which has implications for processes, management models, structures, professional skills and ultimately the company culture. The coexistence between humans and machines will be a challenge for future managers who want to lead the digital economy.

Digital to Customer: enrolling traditional customers

Once the company has developed new digital products and services, interacted with customers through new channels and have created new business models, a new challenge emerges: enrolling traditional customers for the new digital value proposition. To do this, insurers must take advantage of commercial networks, customer service platforms and claim processing as levers to drive change within their customer´s organizations. These employees and collaborators are the best suited for informing, training, challenging, assisting and rewarding their clients and ensuring change takes place and is consolidated.

According to Pedro Egea, Manager of the Business Consultancy Area of everis, “insurers who want to compete successfully in this new environment must look inward and transform their internal capabilities. It is about aligning structures, processes and management mechanisms, talent and work tools with a new reality that forces organizations to be more innovative, to work more openly and connected, to be flexible and agile, while maintaining the stability of their current business”.