Alliances often require insurers making difficult changes to their business models without which they will limit their ability to compete and transform.
John Cusano at Accenture identifies five partnership success factors.
- Maintain "brilliant basics"
- Understand customer expectations
- Become fearless
- Build an extensive innovation structure
- Develop start-up ecosystems
Like it or not insurers are limited by core systems- some 15-20 years old and some newer deployments like Guidewire. They are highly structured, complex and may not allow you to embrace new customer UX and journey expectations. But you must ensure they continue to thrive. So ensure you partner with a digital platform partner that facilitates that approach- continuity AND innovation.
Start-ups often have a keener sense of shifts in customer expectations. BUT- don't forget your own customer facing staff. They shop on their mobile, trip through airports with mobile, use various devices to live life. And they know the frustrations and joys of your customers. Make sure that partners's technology helps staff iterate and improve claims processes.
Willingness to take risks is vital which means that technology must allow for fast iteration and a fail-fast and often modus operandi. Otherwise you are stuck in a rut. Claims handlers should be able to change the sequence, flow and wording of FNOL without having to ask the insurtech's developers to do it. Business user configuration is a must with no coding knowledge.
Build an extensive innovation structure
Innovation must be a part of the structure and culture of the insurer. Not hidden away in a digital hub and skunkworks. Balance aspirational and pragmatic modes of thinking and action. Free up the latent and potential innovation in staff.
Develop start-up ecosystems
Carriers often do not have sufficient skills and resources to work with many insurtech firms. Identify a core group of partners that can collaborate and stimulate progress in parallel. Do not just go for start-ups as most will fail. Chose a mix of established insurtechs that can prove scalable deployment of world-class digital transformation with new start-ups that offer compelling solutions rather than tools.
Insist on an API architecture that allows the carrier to join up disparate third party apps.
Follow these tips to help ensure you are a first mover and fast follower before you join the long tail of unreformed insurers chasing diminishing profits and premiums.
Insurers must bear in mind that digitization is a transformation mode, not an IT initiative, Harris-Ferrante cautioned. “The CIO wants to own it…that was an OK starting point two or three years ago, but not in 2018,” she said. Respondents showed moderate adoption of various initiatives, such as legacy modernization (48%), dedicated digital budget (48%), establishment of new business metrics (46%), a documented digital strategy (46%), and an enterprise information management (EIM) strategy (42%). However, they lagged in areas such as new insurance product innovation (36%), business ecosystem strategy (36%), microservices strategy (32%), and the establishment of senior transformational roles, such as Chief Digital Officer (32%).