5 practical tips for building a digital business


Digital is nothing new: mass-market home, motor and travel insurance have been online for nearly 20 years.

Nonetheless, many insurers are still trading with intermediaries primarily in “analogue”.  Many of these insurers – who sit right across the client spectrum from personal lines to corporate insurance – are now thinking in earnest about digitalisation.

In this post we share five things that insurers should think about when investing in their digital propositions.

Challenge the thinking of established experts

We detect from conversations that many insurers think that “digitalisation” is about launching a customer-facing version of their internal portals (a sales website for personal lines; a customer portal for corporate, for example).  That’s a mistake: going digital requires insurers to rethink their goals and targets, challenge their assumptions about the proposition and redesign the business around this new model.

In some ways, it’s no lesser challenge than a retailer moving their focus from wholesale to direct.  It seems obvious that a kitchen appliance manufacturer would not just reskin their trade website to capture share in the direct market – so why would it be any different for insurance?

To build a successful digital proposition, insurers need to challenge the assumptions of experts with decades of industry experience to develop a fresh understanding of their customers’ needs and pains.  Indeed, you might need to reassess who your customers are – is it the broker or the client, and who specifically in your client’s organisation do you want to be engaging with your digital proposition?

Key tip: Get a broad spectrum of people involved in the discovery process from all levels, including those from outside of insurance – you want a balance of experience, insight and naivety.

Omnichannel direct, not online-only

We observe that insurers are quick to assume ‘digital’ is synonymous with ‘website’. Channels are blurring and customers are flicking between them, or even using them simultaneously (e.g. ‘multi-screening’). As part of the customer research, insurers should seek to understand how their customers plan to interact with their digital propositions, because a good proposition delivered in the wrong medium or channel is not going to get used.

Key tip: Make sure you understand not only what pains your customers have but also how and when your proposition will be used.  Then work back to the mediums and channels you need to build.

Don’t dodge the tough technology questions

Most traditional insurance systems are just not cut out for digital, agile environments – no matter what the vendors or IT department say.  Digital front-ends and distribution have typically been glued onto these systems in an attempt to keep up with demand.

If you are in the fortunate position of building a greenfield proposition, then look for a system that is digitally native.  Oxbow Partners has over 180 insurer and broker systems in its vendor database so there is almost certain to be one catering for your requirements. (You can read our guide on selecting a policy admin system here and a blog post on choosing a system here.)

If you’re stuck with legacy technology, then consider a greenfield build alongside your legacy systems with a migration to the new system over time.  We often hear of insurers who cannot move forwards because migration challenges are so severe.  We agree migration is a nightmare – but it should not be an excuse for not doing anything as the long term costs and headaches of not moving will catch-up with you.

Key tip: When selecting a system, challenge vendors to build a ‘real’ proof of concept early in the selection process. If they can’t (or won’t) this gives you an indication of their ability to act fast and flexibly.

Redesign the hierarchy of functions

Digital organisations need to be much flatter and more agile – they need a different ‘hierarchy of functions’, unfamiliar to most organisations.  The most obvious example is that the IT team needs to be moved out of the regional back office and the CTO needs to take his/her seat next to the CEO and critical functions on the front line.  Digital marketing needs to be moved out of the basement and onto the front line too.  These functions need to work together daily to test and refine the proposition.

To achieve this, insurers need to review the skills of their colleagues.  For a digital insurer, they need people who are able to make data-driven decisions, with clear decision rights, and a culture that encourages trial and error (with safety nets of course).

Key tip: Redesign your organisation with a digital business in mind, not an insurer.

Be obsessed with data – and give your people the skills and tools they need

Finally, truly digital businesses are obsessed with data.  Companies need to stop thinking about data as a financial reporting output, and start thinking about it as the primary driver of all decisions.  We wrote about this is a blog post on “actionable metrics”.

This has a number of implications.  For example, insurers should consider employing a data scientist or two to help organise and analyse data.  Second, decision makers need to be upskilled to ask good insightful questions of the data of this data for the data scientists to analyse. Finally, management dashboards need to be revised to cover not only financial outcomes but the scope and velocity of data-driven organisational learning – almost more important than the financial outcomes in this world.

Key tip: Data scientists are often motivated by the intellectual challenge more than the money.  Give them the tools and freedom they need to do a good job.

We love helping our clients build digital businesses. We use our Agile StrategyTM approach which is about results not PowerPoint. To find out more about our approach, see our recent blog posts on Agile StrategyTM (Strategy is dead, long live Agile Strategy and Six Characteristics of an Agile Strategy project). If you are thinking of getting into digital then we’d love to speak to you.

1 Response
  1. Oxbow are rapidly becoming the guys that saying like it is. Kudos.

    Whilst i’d always say “have a plan to get regulated” – before anyone scoots off to an incubator for a few%, bear in mind, you won’t get authorisation from them (although the reg sandbox helps!). I’ve extended authority to one agent so far, and would be more than happy (broker/distribution side) to give some heads up on the process to others. We’re only powering a select few, but it’s worth knowing the options.

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