As the insurance industry rapidly evolves in the digital age, CIOs are recognizing the crucial need to prioritize core policy transformation as a key agenda to stay ahead of the game. However, this topic is often dreaded due to its complexity, cost, and duration. With the advancement and innovation emerging at an unprecedented pace, CIOs are left wondering what options they have to tackle this challenge. In this blog, we'll explore possible solutions to core policy transformation.
When it comes to core policy transformation, there are several competing objectives that need to be addressed. This can often lead to complex priorities, and scope changes, and often leave the business displeased with the outcomes. Core transformation is a necessity due to one or more reasons listed below.
Core policy transformation can bring substantial benefits to insurers. These include:
Overall, core policy transformation can help insurers to stay competitive, innovate, and meet the changing needs of customers in the digital age.
The primary factors contributing to the complexity of core policy transformation are insufficient documentation, data conversion and migration, integration & API management, data management, and scope creep. Success in this endeavor depends on leadership commitment, effective communication between business and IT, and transformation governance including organizational change management.
In my opinion, there exists a viable alternative. While the objectives and desired outcomes has to be well-defined, the approach to achieving them should not be rigidly predetermined. It is important to remain flexible and open to ideas and adopt a fail-fast approach.
Other industries provide notable examples of how to solve this issue. Major airlines with high operating costs, huge legacy infrastructure, and an aging workforce have established low-cost subsidiaries that provide a digital and self-service experience for digitally savvy customers. Similarly, leading tier 1 banks have established digital banking and onboarded new customers at a fraction of the original cost. Retailers have moved into online stores in addition to retail outlets and invested in a digital platform, such as a website, mobile app, or digital marketplace, to support the traditional business model while making operations more efficient and cost-effective. This allows them to retain their traditional customs while offering a nimble and agile service that meets the needs of their customers. Very few insurers are experimenting with this approach with huge potential and massive upside.
Insurance also can follow a similar approach, while keeping the existing infrastructure and creating a new arm as a digital-only service without any baggage. Several reasons contribute favorably to this innovative approach.
In addition to the benefits mentioned earlier, digital technologies can also play a critical role in streamlining the claims process. This can result in a faster and more efficient claims process, reducing the time taken to settle claims and improving customer satisfaction.
To embark on an alternative approach, insurers need to make key decisions, including:
Lastly, determining the future-state operating and organizational model. In conclusion, insurers can learn from other industries and break away from conventional wisdom. This approach can result in a less stressful journey with quicker turnaround times and tangible results. The key to success is an agile and adaptive organizational culture, along with swift action to stay ahead of the curve and provide the best possible customer experience.
If you're interested in learning more about our core transformation expertise, please contact us at insurance@coforge.com or visit our website at www.coforge.com