In today's rapidly evolving business landscape, the Life & Pensions industry is witnessing significant changes driven by digital transformation. As technology reshapes customer expectations and disrupts traditional business models, insurers must adapt to stay relevant and competitive. In this first part of our blog series, we will explore what it truly means to become a digital company in the Life & Pensions industry. We'll delve into the ongoing industry developments, the essence of digital transformation, and the reasons behind the accelerated transformation journeys of organisations operating in this sector.
A changing landscape
To grasp the dynamics of the Life & Pensions industry, we can examine a recent use case that exemplifies real-world challenges and responses. The sale of Allstate Life Insurance Company (ALIC) and its subsequent transformation into Everlake Life Insurance (Everlake) under Blackstone's ownership illustrates the strategic moves insurers are making to expand their market share and enhance protection solutions. However, merely adopting digital tools such as transactional portals or mobile applications doesn't encompass the true meaning of digital transformation in this industry.
Digital transformation in the Life & Pensions industry goes beyond surface-level enhancements. It revolves around providing digital experiences to agents, policyholders, and beneficiaries, allowing them to conduct business with insurers on their terms. This transformation involves leveraging technology to improve internal processes while delivering better experiences to external stakeholders. By truly transforming and embracing digital practices, insurers can enhance operational efficiency and customer-centricity.
Customer-centricity
The shift towards customer-centricity has been a prominent aspect of recent initiatives in the industry. Insurers are focusing on generating customer-focused products and services that go beyond designing exceptional digital user experiences. Understanding and meeting customer needs throughout their journey is essential. This calls for a holistic approach, leveraging the power of data and artificial intelligence to comprehend individual preferences and deliver tailored experiences.
The shift towards customer-centricity and the importance of aligning technology with business outcomes are two critical factors driving digital transformation. While technology plays a crucial role in enabling transformation, successful initiatives start by defining the desired business outcomes. Aligning product or service design with these outcomes ensures a strategic fit. Transformation involves changing organisational behaviours and interactions with clients, empowered by technology. It's worth noting that digital success is not solely reliant on adopting the latest technology but rather on selecting the most suitable technology that aligns with specific organisational goals.
Navigating legacy systems
Insurance companies often grapple with legacy systems and multiple administrative platforms, raising concerns about achieving transformation. However, modern technology solutions exist to address these challenges. The key lies in architecting a future-ready ecosystem that integrates legacy environments, internal and third-party data sources, and optimised processes. By embracing an ecosystem approach and leveraging data intelligently, insurers can enhance customer experiences, reduce risks, and increase revenue.
At NTT DATA, we have developed our unique approach for managing Insurance Third-Party Administration (TPA) and improved our systems to enable more efficient operations. Specifically, consolidating multiple platforms into a single, unified platform to streamline processes and enhance overall functionality and performance for our clients.
Customer process automation
Ultimately, the goal of business process automation is to simplify complex operations and provide customers with a seamless experience. By orchestrating multiple partners and leveraging rules and technology in the background, insurers can deliver a streamlined, once-and-done customer journey. This approach ensures that customers are shielded from complexities while achieving their desired outcomes and allows insurers to harness the full potential of data to optimise processes and drive business growth.
The Life & Pensions industry is undergoing a profound digital transformation, demanding insurers redefine their roles as digital companies. In the upcoming parts of this blog series, we will further explore the strategies, challenges, and opportunities for insurers embarking on their digital transformation journeys. Stay tuned to gain insights and guidance on navigating the path to digital success.
For more valuable insights on how you can accelerate your digital transformation journey, download our "Roadmap to a Successful Digital Transformation in Life Insurance & Annuities" whitepaper. Stay tuned for our next blog, where we'll explore how insurers can accelerate their digital transformation journey.