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Making connections

Making connections

Recognizing the value of a connected enterprise in insurance

Today, insurance companies aren't just competing with traditional insurers - they are competing with everyone. As customers embrace the omnichannel and personalized experiences being offered by the likes of Apple, Amazon, Google, and a myriad of digital start-ups, they are beginning to demand those same experiences from everyone they do business with.

This shift is putting significant pressure on insurance companies to think differently about what they do and how they do it. To enable the customer experiences that will be required to be successful in the future, insurers must become connected enterprises.

The status quo isn't working

Historically, many insurers organized their operations around products (e.g. life, automobile, general), each with a different look, organizational structure, and supporting technology. The challenge with this model is that it is very fragmented. A customer that has multiple products with a company might need to call three different numbers in order to change their address.

Such a siloed approach, and the disjointed customer experience it provides, is no longer an option. Customers know that integrated and personalized experiences are possible because they are getting them elsewhere. Insurers that stick to the status quo will quickly find themselves irrelevant.

Building a connected enterprise

To be successful in the future, insurers need to connect their front, middle, and back offices in ways that respond to the evolving needs of their customers. This means more than linking disparate channels; it means connecting all functions and technologies so they provide the data needed to create personalized offerings and an unparalleled customer experience.

KPMG connected enterprise architecture infographic

Most insurance companies understand the need to make big changes. According to a recent survey, 75% of insurance companies are making moderate to significant investments in one or more of the capabilities required of a connected enterprise. Of the eight capabilities underpinning a connected enterprise, the areas receiving the most investment are [customer] experience centricity, seamless transactions, advanced data and analytics, and technology architecture and enablement.

Starting off on the right foot

The transformation into a connected enterprise is a complex journey, one that can hold many obstacles for companies that are unprepared.

Top 5 challenges to a truly connected enterprise infographic

So, what can insurance companies do to start off on the right foot? KPMG's Customer Advisory professionals recommend a holistic five-step approach:

  1. Gather rich customer insights: Before making changes, insurers need to develop a better understanding of their customers - their intent, purchasing behaviours, interactions, and most critical touchpoints.
  2. Develop products and services entered around customer needs: Rather than looking to match products with customers, insurers need to develop innovative products and services that are customer-focused and responsive to customer needs.
  3. Identify meaningful customer journeys: Based on customer needs and insights, insurers should identify key customer journeys - the process steps and what customer needs are at each stage of the process. This process is pivotal for identifying activities that require great empathy and activities where customers simply want quick, transactional service.
  4. Design operations to be responsive and efficient: Using the customer insights built in the first three steps, insurers can redesign their organization to be responsive and efficient to their customer needs - from using AI to support transactional activities to providing richer human interactions when it matters most, all supported by robust technology and data and analytics. To be effective, this process also needs to include building end-to-end processes to support employees who will need to be agile, think like their customers, and really embrace customer-centricity within their roles. 
  5. Create a robust integrated digital support platform: Based on what they want to accomplish and how they want to engage with their customers, insurers can then develop an integrated digital platform for their organization focused on providing a single customer view. Such an integrated platform will be essential for service delivery in the future as it will provide the backbone needed to track customers interactions and provide the data required to provide highly personalized customer experiences.

Worth the investment

While shifting customer demand, increasing competition, and technology innovations are key drivers pressuring insurance companies to become connected enterprises, there are strong financial reasons to transform as well. In fact, companies that invest in becoming a connected enterprise have seen a two times overall return on their investment across many metrics – from overall revenue, customer engagement, and lifetime value to improved marketing costs.

Author

Tom Roberts, Director and Digital Lead, Financial Services, KPMG in the UK

Tom Roberts has over 15 years of experience running and transforming businesses and delivering programmes of strategic change. He has had a varied career across the technology, financial services, telecommunications, lottery, retail, media and consulting sectors. His areas of expertise include digital transformation, technology implementation, operational improvement and change management consultancy. His most recent work at KPMG sees him leading the digital practice for banking. He helps banking clients evolve and grow their digital capabilities in a climate where habits and expectations are changing rapidly. He is very passionate about creating innovative and value driven customer experiences for our clients leveraging the global network of KPMG's Fintech partnerships and strategic alliances.

 

Artical originally published in The Digital Insurer's November newsletter: Connected Enterprise.

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