Digital transformation in insurance - what the industry should learn from remote response to Covid-19
- Covid-19 , Insurtech
- 20.04.2020 12:11 pm
he digital tools that allowed the UK to switch to remote working in response to Covid-19 were already part of our everyday lives, writes Tim Hardcastle, CEO and co-founder of INSTANDA. The insurance industry should take note.
“The famous proverb “necessity is the mother of invention” – often incorrectly attributed to Plato – doesn’t hold true during this unprecedented period of the Covid-19 pandemic.
As businesses and individuals responded to Government requests to self-isolate and work from home, many of the tools that we’d be reliant on to maintain some semblance of normality were not only available, but already commonplace in our day-to-day lives. Video conferencing, project planning tools and group messaging apps have become the virtual equivalents of the face-to-face client meeting, the team catch-up or a gossip around the watercooler.
And thank goodness for that. Whilst the situation is unprecedented and deeply concerning for all, our ability to maintain some form of “business as usual” is essential if we’re to come through this crisis and emerge stronger than we were before. The way in which businesses have been able to seamlessly switch to a new way of working is, in a large part, down to the pre-existing familiarity we all had with the tools we now rely on. In short, our agility was the foundation of our resilience. Had we simply waited for the crisis to hit before we adapted, the situation would be much more serious.
The insurance industry should take note. For many years now, the sector’s behemoths have talked about digital transformation but have arguably been slow to embrace it. With the exception of a handful of “digital pioneers”, even well-established companies are still reliant on monolithic legacy IT systems that weren’t fit for purpose during normal times, let alone this new normal that we find ourselves in.
Having sat on both sides of the table, I’m familiar, experienced in and sympathetic to the issues at play – the cost, time and potential risk of ripping out and replacing legacy platforms. Often labelled as transformation projects, they rarely, if ever, deliver ROI. But for an industry that is all about preparing for unexpected events, many will have already found themselves caught off-guard in recent weeks as teams race to keep operations running remotely. The risk of doing nothing has become the greatest risk of all.
Whilst Covid-19 has brought this issue sharply into focus, it is also about much more than working remotely. “Business as usual” was under pressure long before the start of the crisis, driven by changing customer expectations and demand for more personalised products, the need to reduce cost and the emergence of new risks and challenges. That drive for more agile ways of working is now central to the resilience of the entire industry. In the new normal, digital transformation, where ROI is delivered within in weeks, will no longer be an option, but a necessity. The new normal is digital.
But just like in our everyday lives, the tools that will help the insurance industry adapt to this new digital normal are already here and tried and tested, whether that is cloud-based SaaS platforms, mobile applications or through the use of AI. Invention has once again preceded necessity, but adoption has been slow. This is a wakeup call; it’s time for the industry to get ahead of the game so that, just like in our everyday lives, we’re able to seamlessly make the switch. It’s time for the entire industry to become digital pioneers.
As we all respond to Covid-19, the immediate focus must be on ensuring colleagues, clients and their families remain safe and healthy. But with one eye on what the future may hold, it is now incumbent on the industry to rise to the digital challenge and to ensure it is fit for the new digital normal that we are accelerating rapidly towards. Our ability to do this will largely define the winners and the losers of the next era of the insurance industry. To paraphrase another well-known proverb: those that fail to prepare should prepare to fail.”