Are you getting the right balance between digitally transforming insurance and creating new digital insurance businesses? McKinsey gives evidence that top performers do both and invest 50:50 whilst other companies put nearly two-thirds of investment into digitising core legacy systems.

If the focus is on internal systems and processes rather than a laser focus on the customer there is a temptation to invest more in modernising legacy systems. Plus once you start on that process it is complex, time consuming and budgets just get swallowed up leaving little for true innovation.

The sheer cost of such projects is a major problem. Rarely is it less that a $million and a year for any project. Expand it across the whole legacy core and it soon amounts to $10 millions or more and multiples of a year.

Luckily newer and more agile digital platforms are turning that upside down enabling insurers to adopt the duality of digital McKinsey describes.

Take insurance claims. No need to make any changes to the core systems whether old legacy or modern platforms. 360Globalnet, Snapsheet and RightIndem, for just some examples, have filled the digital and agile gaps that major insurers have identified need covering fast.

No-Code Platforms mean that insurers can put the business in charge and customise ideal workflows from the customer backwards unconstrained by inflexible core systems. A mix of automation and human intervention when needed or requested by the customer who can launch claims from their phones, tablets and laptops.

Platforms that combine the optimal claims processes from simple A&D/highly automated to complex DR&R/ balanced human & automated engagement.

Platforms that automatically update the claimant in real-time on claims status and progress, orchestrate all the people involved - customers plus insurer's teams plus supply chains- and act as a communications hub.

Usually integrated with the policy admin system and then digitally processing claims, organizing repair and replacement or instructing the insurers' payments systems to pay cash settlements.

The same platform with fraud solutions, putting technology at the elbow of PI teams and letting claimants book appointments auto repair networks, vehicle hire, carpet specialists, drainage and subsidence contractors.

The outcomes of delighted customers, collapsing costs and more efficient cash-flows release budgets for the other part of innovation- creating new digital businesses. 

And the platforms themselves must have the capacity to be the foundations of these new digital business ventures particularly as the emphasis is on ecosystems and prevention rather than cure.

Offering to leverage the massive data explosion from sensors in connected customers (wearables) , homes (systems, devices and services) , pets, vehicles (telemetry, dashcam , premises/factories and highways (CCTV, plant & machinery, building management systems) means the core & legacy systems must have been digitised.

McKinsey shows thy benefits from increased market share and proposed three key components of digital duality.

  1. Digital-capital allocation
  2. M&A investments
  3. Organisations digital offerings by category.

Dip into the article below to plan mastering the duality of digital.