Digital transformation – small steps, big strides

Digital transformation remains a daunting prospect for many brokers, but that doesn’t mean they should be put off from taking that first step.

InsurEvo group chief executive Chris Rolland said it is all about approaching change the right way – and that means taking your time.

He explained: “Many brokers operate in environments where legacy systems, manual processes and long-standing ways of working still dominate.

”There’s often a perception that going digital means radical change, when it’s more about evolving customer experiences and internal efficiencies, gradually and deliberately.”

Guidewire Analytics group vice president Charles Clarke agreed, noting that brokers need to be specific about the problem they are trying to solve and what the ultimate purpose of the solution is for the business.

“You could, in one fell swoop, spend billions of dollars rewiring your whole company and how you interact with your trading partners, or you could just do it a bit at a time,” he said.

“That’s more practical, not least because in insurance you have to contend with the enormous networks of customers and markets that you work with. You try and systematise all of that in one go and you’re just going to fail.

“[You need to] break the problem down, be super specific about the problem you’re trying to solve, what the use case is and how you intend to solve it.”

Targeted approach

As an example of this targeted approach to digital transformation, Clarke said that, instead of looking to improve the digital journey for insureds, which is too generic a problem, brokers should focus on specific elements of that journey, such as self-service for policy documents.

Rolland agreed with this approach, adding that it also allowed a broker to realise benefits more quickly, which could then be re-invested into the business to fund bigger projects.

He said: “Don’t try and change the world, because when you try and take on too much, nothing gets done.

“Just sit back and see what small customer frustration your business can solve. That will then give you the extra money to move on to solving bigger problems.”

From a practical point of view, James York, an innovation consultant at The 49, said speed and flexibility are essential, while brokers also need to be prepared to accept failure.

He added: “When you invest in innovation, get the prototype made fast. Don’t over document processes, ensure your partner is research, data and insight intensive. You have to iterate to innovate.

“Build in contingency and never bet anything on innovation that you can’t afford to write off. It’s not supposed to work every time, failure is normal for learning – but that one successful time pays for another fifty tries.”

Innovative culture

This iterative approach to transformation can only succeed if a business has the right culture, which has support right from the top of an organisation – even if leadership aren’t technology focused themselves.

“Senior leadership is critical,” Rolland said.

“Leadership doesn’t just set the tone – it clears the path. If senior leaders don’t visibly champion digital initiatives, it’s easy for them to lose momentum.

“That doesn’t mean leaders need to be tech experts, but they do need to be digitally confident and committed to supporting those who are.”

Rolland added that this was all about building a culture of “curiosity, accountability and collaboration”.

“The best digital progress happens where cross-functional teams are empowered to experiment and learn fast – especially when supported by leadership that understands digital is not a department, it’s a mindset,” he explained.

“At InsurEvo, we’ve fostered a culture where data, insight and innovation flow freely between teams.”

For Clarke, the reason to act now goes beyond operational efficiency – it’s about solving some of the industry’s biggest structural issues.

He said: “The world is chronically underinsured – insurance penetration has floated at about 4% of gross domestic product for the last two or three decades.

“If we pulled [costs] out by digitising, then we’re more profitable. We attract more capital. We can sell more insurance products because we’ve attracted more capital and we can provide that to the people who need it.”

One of the game changers here could be the rise of generative AI – but only if firms are culturally prepared to adopt it. This means rethinking hiring practices to bring in people who embrace the change AI can deliver for insurance.

Rolland noted: “We are on the cusp of a big change with AI and you’re not going to be able to stop this type of change. It’s about the culture and setting the tone of the business – some people get it and some people won’t.

“You need to hire for that change and for the future, because this technology is not going to stay tomorrow forever.”

Ultimately, however, the message is clear – brokers don’t need to wait for a big bang to make meaningful progress.

As Rolland puts it: “You don’t need to revolutionise everything overnight. Find one part of the customer journey or one internal bottleneck and solve it with digital, AI thinking. Momentum then builds confidence and confidence fuels your transformation.”