"Almost a quarter-century ago, research by John Kotter found that only 30 percent of change management programs succeed. And a decade ago, McKinsey research found that the needle hasn’t moved. As of today, it still hasn’t."
Elixabete Larrea McKinsey June 2019
McKinsey identifies a key issue- "During transformations, most companies tend to focus on new tools and processes. As a result, too many ignore the critical need to identify capability gaps and change mind-sets."
Luckily there are many success stories to learn from and Larrea lists critical success factors.
- Create a compelling story
- Model the desired behaviour
- Implement reinforcing mechanisms
- Building capabilities
- Start small and expand fast
Creating a compelling story
Customers are not the only ones that like stories. The company's vision, goals and strategies must support a compelling narrative that both inspires and encourages action. Optimal policy holder experience and claims journeys that put people's lives and property & contents back in order attract attention. The story, adapted for different roles, teams and individuals must drive commitment and action to change.
Model the desired behaviour.
The best transformations involve all teams and individuals to draw on customer knowledge, skills and ambitions.People on the front line are generally avid users of the very best digital journeys whether ordering goods, cabs, holidays and places to stay or services. They are probably as transformational astute as the Digital Transformation Officer!
Involve the whole team in initial planning workshops; claims handlers, underwriting, PI & complex claims, fraud and the supply chain.
It's no good trying to deliver optimal claims journeys if underwriting insist you ask all the questions you currently burden policy holders with.
Unless you are actually going to take action from any data don't collect it.
Implement reinforcing mechanisms.
I lie not when I tell you of the claims handler team entrusted with new digital claims tools and a world-beating platform that were still incentivised to make outgoing phone calls. No wonder claims times did not shorten when they waited for claimants to answer the phone!
Make sure incentives are aligned to desired outcomes.
If you need an army of consultants and trainers backed by a large force of developers/coders to deliver digital claims beware!
overcome these vestiges of legacy system implementations. With claims volumes of 150k to 250k a year it should only be necessary to train three senior adjusters or business analysts to customise customer journeys in plain English ( or Spanish, French, German, Chinese etc) from their workstation. No coding and an agile platform can make changes in hours and completely new journeys in a few days.
Start small and expand fast
Plan a three months POC. Take Home & Contents or Auto and chose 2/3 perils to start with a team of between five and ten claims handlers.Embed a member of the fraud team from day one.
Reimagine the customer journey unencumbered by current system restrictions. The new digital claims platform should be able to revolutionise claims journeys without you having to replace core systems.
A modern NoCode claims platform will let the team iterate to continuously innovate. By the end of month one you must be able to add another two/three perils. You will also have BI/MI to prove the improvements over business as usual (BAU).
How long to transform the whole of Auto or Home Claims?
Within twelve months you must have been able to bring the whole claims operation into the brave new digital claims world.
Move the needle today with digital claims that has achieved that fast and agile change. A platform that accesses and manages unstructured data e.g. powering fraud and PI solutions and both orchestrates internal teams and the supply chain.Better still test drive digitally transformed claims services.
The time for experimenting with just one insurance product or one business unit are over. Enterprise wide transformation is vital in order to anticipate rival's competitive threats and disruption from outside the industry.
Carpe diem! Seize the day.
Transforming insurance claims operations is particularly difficult given its distributed teams, multiple stakeholders, and fast-paced operations. What’s more, the pace of change is accelerating. Claims will likely look completely different by 2030, shaped by advanced analytics, artificial intelligence (AI), and automation, as well as new ways of working thanks to the rise of the gig economy and other workforce shifts. The good news is that there are plenty of success stories to learn from. And these organizations have one thing in common: they overcame a central challenge—employee resistance to change—by prioritizing the culture shift as much as performance improvement.