Even in 2021, many of the world’s insurance premiums are not currently being transacted digitally. It is because insurance companies do not realize they need to check the digital maturity of their business.
This post is an attempt to help insurance companies understand
What is Digital Maturity? and How to analyze the digital maturity of their business?
What does Digital Maturity mean?
Digital Maturity is the ability of an organization to adapt and thrive in a world that is increasingly defined by digital technologies.
If an organization has attained digital maturity, then it would be able to:
- Adapt and thrive in a digital world
- Handle complexity and change
- Focus on the customer and compete
- Make decisions and actions at speed
If not, then the organization needs to focus on these areas:
With digitization underway across industries, insurance companies should not fall behind if they want to remain relevant. Insurers should keep adapting themselves according to the need of their customers, and if they do not, they run the risk of losing them forever.
Following are the areas which are necessary for an insurance business:
- Cyber Security
Cyber security problems can be extremely costly, devastating, and even fatal to an individual or a business. The consequences like defaming, data loss, disruption of operation, a data breach can cause immense damage.
The sign of a good business is one that can do more with less. As a result, automation is increasingly becoming popular. It is what makes many things easier and more convenient. It’s also the key to making organizations more efficient, both in day-to-day operations and long-term goals.
DevOps is a development process that emphasizes communication, collaboration, and integration between software developers and information technology (IT) professionals. A business should consider DevOps to ensure faster deployment, stabilize the work environment and promote agility in business.
It is a model for enabling ubiquitous, on-demand access to data and is the need of any business. Adopting new technologies is useless unless insurers transform their core processes into digital ones.
Customers are the center of any business. In digital maturity assessment, they are playing an important role as all the business decisions evolve and revolve around them. An insurer should check whether their business strategy focuses on these four areas for their customers:
- Customer Engagement:
Customer engagement determines how well your business strategy is working. An insurer should check as per the following questions:
How are people interacting digitally with their business?
What are their touchpoints?
How to keep them connected with the business?
- Customer Experience:
Insurers should monitor their customers’ interactions with the business and what they perceive about it as they do so. A customer experience is a composite of their cognitive, affective, sensory, and behavioral responses at all stages of the consumption process, including prepurchase, consumption, and postpurchase.
To gain their customers’ trust, insurance companies should know what their customers need. Customers are more likely to buy from the company they trust.
- Customer Insight:
The insurers need to turn customer insights into actionable insights that enable a business to deliver a superior customer experience. Achieving this requires taking a strategic approach toward implementing digital technologies, building a culture of innovation, and developing a strong leadership team that drives change across the organization.
The business culture is based on a set of values and practices that enable their business to succeed. Many insurers have started taking a cultural approach to digital transformation rather than a technical one. Following are the points that insurer needs to succeed.
- Clear and coherent digital strategy:
Every decision insurers make should be in support of the business. As the digital world becomes increasingly complex, strategies need to be clear and coherent. It is necessary to create a culture of continuous improvement since the digital world keeps changing, and business strategy needs to be resilient and adaptable.
- Flexible and innovative organizational culture
A flexible organizational culture can adapt to new, unexpected challenges quickly and effectively, and accept innovation is important for the insurance company.
- Willingness and ability to develop talents
It’s the willingness and ability to develop the talents required to create, innovate and transform businesses. Digital maturity is about business culture and embracing employees’ cultures. It requires a willingness to develop talent that aligns with the needs of our future organizations. The most common response to this challenge is training employees about how to be more productive digitally. Other popular solutions are hiring new employees with digital skills or sourcing for technology companies that can help companies improve their digital maturity level.
- Digital fluency of top managers.
Digital fluency means the ability to understand new technologies, identify opportunities, analyze risks and formulate appropriate strategies, implement new technologies effectively, and manage change. Digital fluency is a key competence for top management and middle managers. Businesses need to embrace digital transformation and involve everybody in the organization: top management, middle managers, and employees.
Sustainability Operating model
- Agile process:
The insurer should start adapting to the agile methodologies while developing the software for the business. Agile is an iterative approach to project management and software development that helps teams deliver value to their customers faster and reducing headaches.
- Intelligent operation:
It is a bold new approach to achieve operational excellence. It uses a digital transformation to optimize interaction, minimize downtime, enhance human performance, and manage operational risks.
Check with the following business capabilities:
- Digital skills:
Digital skills are the practical abilities required to use technology to complete tasks. Adding the latest and updated technology does not give a guarantee that the business can use its complete potential. It needs people with complete understanding and knows how to use technology to improve business.
The ability of the business to add value through learning, researching, and improvement.
- Digital workplace:
Working in teams has become an important skill for businesses to gain a competitive advantage. This is because the business world is moving towards a digital workspace that involves the collaboration of multiple teams; no longer are individuals working in silos.
- Big data & data science:
Businesses can gain valuable insights by using big data. This allows them to refine their marketing efforts. Many companies use it to train machines, to model predictively, and for advanced analytics projects.
The goal of Data Science is to create insights and make sense of data by combining programming, mathematics, and statistics. It has produced amazing solutions and intelligent decisions across a wide variety of industries.
- Data analytics:
It helps businesses optimize their performances by understanding the demographic, behavior, touchpoints, and many more. Some of the data analytic tools are machine learning, data mining, predictive analytics.
Digital maturity of the business focuses on the right efforts that the company should put. It is the analysis for the company to understand the current status of the company.