Digital transformation is – if you think about the way that we used to do business and how it was manual, paper-based, non-digital etc – transforming those processes in an automated way.
It is important for all companies to digitally transform and it’s becoming a real hot topic. Why it's important for insurance companies, specifically, is because balance sheets carry a lot of different assets and they're all buried in legacy systems.
"With digital transformation, we can have these systems talk to
each other and have minimal human intervention."
That means that the calculation and pulling information and reporting becomes quite cumbersome. It is manual and there's a lot of downloading and then uploading and then copy pasting, so it's prone to manual error.
Now, with digital transformation, we can have these systems talk to each other and have minimal human intervention. This allows for the employees to, first of all, have a better employee experience, but also it reduces risks. It increases efficiencies and the human workforce can focus on decision making or on tasks where human intervention is required.
Yes, and it is in different stages of maturity. There are huge companies, for example in China, where it's mostly a technology company selling insurance. But if we take a look at the standard, traditional insurance market there are companies in different stages of maturity.
So, there are large companies that are investing a lot in digital transformation, building capabilities in-house. And then there are some companies who want to focus on what they're good at, which is insurance and who may look to outsource the digital transformation component.
Picking the right technology is a very interesting question because there are many options available and while the right technology may be the right solution at this moment in time, down the line it may not be.
There are a couple of things that insurance companies need to really focus on. They need to do the proper due diligence when they're picking their technology partner. Also, they need to decide whether they want to use software as a solution, or to do co-sourcing or outsourcing,
Once insurance companies decide on how they are going to approach this, then it's very important to understand the technology partner and what type of support they will be providing.
"It’s important to put it in a timeline to understand the support structure
of the company that you're partnering up with."
I've been dealing with a lot of clients who have been using great technologies from the onset, but those technologies were not able to keep up to date with the newer versions. And what that meant is the solution was no longer the best solution for them down the line.
To manage this, it’s important to put it in a timeline to understand the support structure of the company that you're partnering up with. One thing that I should mention is the customisation. A lot of insurance companies have customised requirements and the more customised requirements are, the more difficult it is then to upgrade to solutions. Therefore, it's very important to partner up with a technologically advanced company.
The pandemic has been awful for everyone, but in terms of digital transformation, it's accelerated both adoption and adaption.
I can give you a very simple example. I know a lot of my colleagues who would never use Teams, who would never use Zoom, who really liked the traditional phone system for any kind of conferences, and they have had to adapt to this technology. The pandemic has broken the resistance that employees have to digital transformation.
"It's not to replace the human workforce, it's to enhance and
augment the human workforce."
A very important component is the people factor and there is a fear of job losses and there's a fear and resistance to adapting to these new technologies. But we call this the fourth industrial revolution - what's happening with technology - and it's not to replace the human workforce, it's to enhance and augment the human workforce.
Digital transformation, impacts everyone, so it's not something that can be delegated, or that can be assigned to a group or a project, it's something that needs to be embedded in the company culture and to grow within the company for a couple of reasons.
One of them is because if you don't digitally transform, you're doomed. And second is that when we think about the upcoming generation, they are not interested in boring, mundane tasks. They're digitally born, so we need to be a future proofing our workplaces for this.
