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.
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.
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.
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.
The transformation into a connected enterprise is a complex journey, one that can hold many obstacles for companies that are unprepared.
So, what can insurance companies do to start off on the right foot? KPMG's Customer Advisory professionals recommend a holistic five-step approach:
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.
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.