The blog discusses the objectives and complexities involved in core policy transformation for insurance companies. It highlights alternative approaches adopted by other industries like airlines, banks, and retailers to implement digital transformation successfully. The insurance industry can follow a similar innovative approach - keeping existing infrastructure intact while extending a new digital-only service. This approach leverages digital technologies' benefits like personalization, cost reduction, and streamlined claims processing. Key decisions around defining outcomes, choosing technology, and managing organizational change are crucial for effective core policy transformation.
Digital transformation is one of the most compelling necessities for the insurance industry. No wonder most CIOs are prioritizing core policy transformation to stay competitive. After all, a stitch in time saves nine. However, only a handful of insurers are adequately prepared to replace the aging core systems. In addition, with high-tech solutions advancing at a rapid pace, CIOs are often left wondering about the options they need to tackle this challenge.
In this write-up, we will explore the possible solutions to core policy transformation.
Core policy transformation is a paramount transformational effort including a lot of complex priorities, delays, scope changes, and more. Sometimes, it often leaves the business displeased with the outcomes. Nonetheless, in addition to its ups and downs, core transformation is a necessity due to several reasons listed below:
Core policy transformation can bring substantial benefits to insurers:
On the whole, core policy transformation can help insurers stay competitive, innovate, and meet the changing demands of customers in the digital era.
Primary factors that contribute to the complexity of core policy transformation are:
Ways these complexities can be overcome: Leadership Commitment Effective Communication between the Business and its Team Transformation Governance Organizational Change Management
Change is tough. Many insurance companies jump on the bandwagon of rapid implementation overlooking a critical factor – the pace at which employees can adapt to change and make it serviceable. To do this, companies need to remain flexible and open to ideas. While the objectives and desired outcomes need to be well-defined, companies should not adopt a rigid approach to achieve them. A fail-fast method is required for a fail-safe core policy transformation.
A core policy transformation is indeed a daunting process. Yet, learning from other industries can be an excellent way to streamline the entire process. Other industries have enough notable examples of how to solve this issue. For instance, major airlines with high operating costs, huge legacy infrastructure, and an aging workforce. Some of them have successfully established low-cost subsidiaries that offer a digital and self-service experience for digitally savvy customers.
Similarly, a fair number of the leading tier-1 banks have established digital banking and onboarded new customers at a fraction of the original cost. Some other examples in the same series include retailers moving into online stores. In addition to retail outlets, retailers also invested in a digital platform, like a website, mobile app, and digital marketplace to make operations more efficient and cost-effective while keeping the traditional business model alive. It enabled them to retain their traditional customers while offering agile services to meet the needs of digital-savvy customers.
All these models point to one thing in unison that core policy transformation can be carried out successfully and the insurance industry is not an exception. By experimenting with the new approach insurers can unleash a huge potential and massive upside.
Core policy transformation is full of risks and its share of hiccups and bumps. However, insurance can follow a similar, innovative approach other industries adopted. It can keep the existing infrastructure intact and can extend a brand-new digital-only service without any baggage. Several factors favor this approach, such as:
To embark on this alternative approach to core policy transformation, insurers are required to make some key decisions, such as:
Insurers can learn from other industries and deviate from conventional wisdom. This will boost turnaround times and will lead to tangible results. The key to success lies in an agile and adaptive organizational culture, along with swift actions. It will enable insurers to not only stay off the curve but also provide the best possible customer experience.
If you want to delve deeper into our core transformation solutions, please contact us or drop an email at insurance@coforge.com. At Coforge, we have got your back.