The advent of a digital era has compelled corporations, irrespective of its sizes, to adopt digital strategies, which need to be commensurate to the environment they are operating in. The growing Banking, Financial Services and Insurance (BFSI) sector is not an exception. The insurance sector and that too a general insurance segment has shown a bit of resilience to build and move digital strategies in real time, essentially to enhance brand lineage among the customers.
Digital Leadership teams of large general insurance companies know that they need to move rapidly to react to digital disruption. But while each general insurance company has its own digital roadmap befitting its strategies, executing it at the right pace, with the right governance model and mind-set can be a key to success. Here, it becomes imperative to measure and evaluate essentials of digital initiatives that would yield desired results. Digital transformation is enabling organizations to differentiate at the front, resulting in higher customer acquisition, increased customer satisfaction and retention. It is also standardizing at the back through operational and process simplification - resulting in increased efficiency and profitability.
Today, digital strategies are getting executed at three levels, i.e. Business, Operations and Information Technology. While digital transformation initiatives vary in shape, size and types depending on complexities, it is important to align all three layers to execute the digital strategy.
The business strategy is mostly a CEO, CMO or CSO driven. For example, positioning of a General Insurance Company, as a multi-product general insurance company delivering a world class omni-channel customer experience through maximization of technology services. The Operations & Infrastructure strategy is mostly COO driven. The IT Architecture and Technology strategy is CIO, CDO driven. The success of digital strategy lies in putting together a target operating model (TOM) to set up the right environment. It also envisages setting up of Key Performance Areas (KPI's) to effectively measure them at all levels. These checks are needed to avoid any gaps during transition.
Hence, while executing a digital strategy, one should consider certain aspects to deliver faster, better and cheaper. To begin with, it is critical to prioritize initiatives. It can start with a deep market research supported by customer, CRM analytics, market trends, surveys and competition analysis. As a second phase, an 'Idea Generation' is equally important. An 'Idea Funnel', as it is often called, sets out a strong framework. In top portion of the funnel, one has to locate the first interactions customers are making with the brand. In today's world those interactions could come from a variety of directions. The most common ones are organic search results, but the mileage may vary.
In the middle of the funnel lies the conversion potential, where leads move forward from a first interaction toward a sale, depending on customers' experience with the brand so far. The bottom of the funnel shows the final touch before a customer hits your product or service offering. These channels are of the utmost importance because they allow the company to build its strategy from the bottom up.
As per the 'Agile Principle', digital transformations occur through continuous innovation – by radically changing business models and capabilities in measured steps, over time, and as resources allow. This empowers organizations to launch, learn, and re-launch digital initiatives, swiftly reacting to changing market conditions and customer needs. Holding a transformative digital vision is necessary. Those brands, which have identified digital as the next technology investment area will henceforth stay ahead of the curve. To be successful digitally, the companies must demonstrate an awareness of how to be agile. Then, they must be able to execute in an agile way – including how they manage innovation and governance. Digital agility supports digital innovation in empowering a company to continuously evolve digital strategy based on prior outcomes and programmes. As far as general insurance companies are concerned, the top two drivers of digital strategies are 'enriching the customer experience' and 'regaining more control of customer relationships'. This reflects increasing recognition of the potential to increase engagement with customers and to build longer term relationships using digital capabilities.
For digital effectiveness, DevOps strategy is equally important. It aligns IT and Operations to set up an infrastructure for an agile development process. In a new technology arena involving big data, cloud computing, social networking, etc., a new digital economy is emerging swiftly. To become a digital insurance marketplace in this exciting economy, the well-insulated digital strategy will play a significant role.
