Reimagining insurance Reimagining insurance Reimagining insurance

In the second episode of the Frontiers for insurance insight series, I was joined by KPMG in Canada Management Consulting practice team members Sonya Gulati, Jonathan Weir and Gavin Lubbe. We talked about critical aspects of operations transformation that insurers have experienced over the past 18 months and, as we collectively re-emerge from the pandemic, how they're reimagining their businesses moving forward. Here are some of the conversation's highlights.

Transforming operations is crucial for a strong exit from the pandemic
Gavin thought it was important to note at the outset that the pandemic has put a lot of businesses under pressure and that it's imperative they find more operational efficiencies. While many insurers have been under-investing for years in their systems and operational processes, the pandemic response demonstrated that digital transformation can happen faster than expected, especially when many of the factors that used to slow systems down suddenly disappeared under the immediate pressure to work digitally. Now, insurers are trying to hold on to those gains.

Jonathan pointed out that service expectations have changed during the pandemic, with digital and self-service advancing from "nice to have" to the preferred channels, and these are now a key part of delivering critical services. The next step will be to institutionalize the changes and make sure the benefits are locked in.

Sonya observed that the pandemic basically forced insurers to change as everything around them also changed. Now that they have an opportunity to reflect on those changes and redefine themselves as best-in-class.

Transformation approaches
Transformation processes and outcomes are inevitably affected by organizational cultures. Talking about property and casualty insurance in particular, Jonathan noted that, moving forward, attention from leadership and clear processes in this area will be essential. Gavin added that there's an opportunity for players in the life and health space to learn from the experience of the P&C players who have done more on the analytics front. Backend processes need to be efficient, and there are huge opportunities for automation in processes such as valuation, pricing, and others.

Optimizing costs and getting results
As the sector moves past the pandemic, companies are looking for ways to optimize costs and maximize ROI. Sonya sees the pandemic as an opportunity: because insurers had to review and re-examine their expense base in light of different costs and categories, they also had to make hard choices about what they could stop—and what they needed to start—doing. While some organizations took a wait-and-see approach, others used the pandemic as an opportunity to find greater efficiencies and reallocate spending toward the kinds of digital transformation that will enable the workforce of the future.

Alliances and partnerships: A new appreciation
From Sonya's perspective, the redefined workplace and new ways of working have given insurers a better appreciation of the strengths and capabilities of alliances and partnerships. Organizations now understand that they don't need to be good at everything and that strategic, trusted relationships can be used to augment their capabilities.

Gavin noted that technology vendors are increasingly offering industry-specific solutions, many related to operational transformation. This means that insurers are no longer compelled to start their transformations from scratch and can instead begin with a third-party solution that can then be customized and integrated into their ecosystem. Jonathan added that, as this process develops and more vendors are integrated, greater investment on the supply side will change the dynamics of the relationships and value will start to flow both ways.

Boards and the importance of trust
The role of boards in transformation processes changed during the pandemic. But "agility," said Gavin, shouldn't be an excuse to neglect structure and transparency. Jonathan, meanwhile, spoke to the need for board education, particularly with independent members who may not be as familiar with operations. And Sonya noted that while boards offer diversity of thought and varied perspectives across different industries, the tension between the board and the executive can help reimagine the art of the possible.

Critical factors for success
As insurers head down the path toward operational transformation, let me close with our panelists' top advice for delivering the greatest value for customers.

Jonathan: "Look for opportunities to make changes and use those changes to drive efficiencies, improve cost effectiveness, and surprise and delight customers. Then create a culture of continuous improvement and opportunity for further change."

Gavin: "Operations is the lifeblood of your business and needs to be valued and respected. If you want to support an emerging culture that's continuously improving and comfortable with change, in addition to rewarding people with technical skills, you have to respect the contributions from your operations team members."

Sonya: "It's not enough to ask customers what they want: the biggest changes in customer experience are the things that customers didn't even know they wanted. Redefine what that experience could be and look for big leaps of innovation that will reimagine the entire customer journey."

I hope this helps you identify some priorities for transforming the operations at your business. For more information and to continue the conversation, feel free to contact me directly.

Watch the full discussions in the Frontiers for insurance series.