Business leaders are today facing the challenge to move their organisations to the next level – and that means Digital Transformation. The need to embrace new technologies and innovate business models to keep pace with industry disruptors across all sectors is an urgent one. But there are barriers: Digital Transformation initiatives are complex, the prospect of implementing large-scale changes is daunting, knowledge gaps are unnerving, and perceived in-house skills shortages can ring alarm bells for training, hiring and/or outsourcing costs.
It is imperative, however, that strategies are formulated to overcome these barriers, for perhaps the biggest obstacle of all is failure to appreciate the urgency of the matter at hand.
The Digital Threat to General Insurers
The insurance industry is ripe for disruption. In a recent report – Insurance Disrupted: General Insurance in a Connected World – Deloitte identified nine applications of digital technology that could have the greatest potential to disrupt or change general insurance (GI) over the coming decade.
- Price comparison websites
- Mobile internet transactions
- Cyber risk insurance
- Telematics-based services
- Value comparison websites
- Social brokers
- Peer-to-peer insurance
- Sharing economy insurance
- Self-driving car insurance
The image below indicates how big an impact each application is likely to have, and a timeframe for when the impact is likely to manifest:
GI Disruption Comes from Both New and Established Players
A separate report by Forrester – Trends 2015: European Digital Insurance – agrees with the Deloitte findings. Citing the likes of peer-to-peer insurance provider Friendsurance and telematics black box innovator Drive Like a Girl – both relatively new entrants who deliver new customer value with digital technologies – the view is that such innovative disruptors will continue to pick off more and more customers from established players which fail to update their services.
Some large providers are already responding. BNP Paribas, for example, has been lauded for its innovations in IoT technology. Home insurance customers are now making use of Habit@t – a connected box linked to sensors installed throughout the home that sends immediate alerts to users in case of accident (fire, water damage, etc.).
Elsewhere, AXA has introduced Drive Coach – an app for the Apple Watch that allows users to analyse and improve their driving behaviour in real time – and the Faster Payments system, which dramatically reduces claims payment times by allowing settled claims to be paid instantly into customer bank accounts.
Indeed, claims, policy administration and billing transformation are amongst the top priorities for insurance providers – especially as the “digitally savvy” millennial generation increasingly expects to be able to use direct online and mobile channels to interact with providers.
Accelerating Change with DevOps
To remain competitive in this fast-moving landscape, established insurance companies must embrace Digital Transformation and institute a new operating model for IT – urgently.
This new operating model must embrace a transformation that establishes a core foundation of:
Increased speed to market
- Bringing products to the market within existing product lines
- Expanding the breadth of offerings outside of core markets
- Improving the ability to react to regulatory change
- Changing products to rapidly to meet market demands
Improved operating efficiency
- Reducing call centre volumes
- Implementing self-service portals
- Leveraging third-party integrations
- Reducing maintenance budgets
- Rationalising vendor tools and vendors
- Simplification of the IT environment
For established general insurers, the time to innovate is now. New digital services must be conceived, developed and deployed rapidly, for the race is on.
DevOps is the answer to this problem.
DevOps is an emerging model which provides a solution to accelerating Digital Transformation in core areas of operation. DevOps optimises the way organisations deliver value for their customers and shareholders, and promotes a flexible and agile delivery approach that facilitates a cross-functional environment, whilst fostering a culture of continuous improvement.
In 2016 and beyond, traditional insurance firms that don’t react with urgency to industry changes will lose ground to those dynamic businesses that are already pushing digital. Falling asleep at the wheel is not an option – DevOps is the solution for any organisation that must increase the flow of development and deployment, while maintaining quality, reliability and security for its customers.
Bringing DevOps to Your Organisation
DevOps is becoming such a powerful and influential movement that market intelligence firm IDC believes that 80% of the top 1000 companies will have DevOps practices by 2019.
Change is coming, but obstacles still remain in the paths of many. These need to be overcome – quickly. In our white paper, DevOps: Unlocking the Value from Digital Transformation, we highlight the key barriers that are preventing organisations from getting off the ground with Digital Transformation and DevOps initiatives, together with solutions for charging these barriers down.