The two key drivers in the market, as seen by Sahota, are the revenue side with its emphasis on customer retention and acquisition, and the operational cost and operational effectiveness side. He believes that to move the dial and build a successful business strategy, you need to utilise both.
"On the subject of digital transformation, Sahota outlined what he believes to be the fundamental tenet behind why industry players, including brokers, may be slow to embrace such changes.
“I don’t think it’s just about digital transformation,” he said. “I think there’s just the general underlying [principle] that human beings don’t like change.”
However, we live in a world where change is the norm, said Sahota, and businesses that are going to survive in any industry must be agile. Yet a source of confusion for many businesses, he said, is the mix-up between digital transformation and digitisation.
Digitisation, he explained, is when organisations use technology on an existing way of working and it does not change the underlying process being utilised. Digital transformation, on the other hand, is changing the way of working through the use of technology."
Sahota makes an important observation for all insurers.
He states "the major change within the insurance sector is the move towards customer centricity. This shift in culture has already occurred in the banking industry, said Sahota, and “insurance is not going through a different change, it’s just going through the change now.”
Existing culture and inflexible core systems are barriers to this change. It is difficult for an industry which is inherently and traditionally product-focused to emphasise the customer instead.
Sahota emphasizes that customer centricity, customer experience and the customer journey are the most essential considerations and should be at the heart of all transformation and strategy adjustments carried out in the insurance sector.
I should add that this should be an overarching strategy and not just a decision to tackle one category like Home and Contents. And not good enough to have a slicker FNOL front end but keep all the back-end business as usual. You know what I mean- click a "Make a Claim" button which lets you submit a description of the claim, add a photo and even video and then the next step is tick a button to get a claims handler to ring you back!
There is a too often a lack of joined-up strategic thinking in regard to how you concurrently: -
- Improve service
- Reduce Opex
- Control claims cost
- Combat fraud
- Reduce the IT overhead permanently
- Empower claims staff and transform to customer engagement rather than call centre
A strategy which leverages a self-configurable enabling technology that transforms all of them delivers a total benefit that is far greater than trying to improve things in isolation.
Yet, while Sahota identified this transformation and highlighted the importance of continuing to talk about technology, he said the major change within the insurance sector is the move towards customer centricity. This shift in culture has already occurred in the banking industry, said Sahota, and “insurance is not going through a different change, it’s just going through the change now.”
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