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The Insurers

Guide to:

Digital

Transformation

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Executive Summary

Half of all UK business leaders fear that their industries face significant digital disruption

within the next two years.

The financial services sector, which employs 2.2 million people and contributes £66 billion

in taxes to the UK economy, demonstrates the highest level of anxiety, with two-thirds

(65 per cent) of respondents fearing the impact of digital disruption on their markets over

the course of the next 24 months. It’s not unfounded. We are on the edge of another sea

change. As well as macroeconomic, social and regulatory changes, insurers are coping

with more seismic changes brought about by digitisation.

By evaluating the position of your organisation now, you can gear up for the new wave

of customer expectations. This guide will clarify digital transformation and leave you in a

better position to understand the context for your company.

2. Executive Summary3. DefiningDigitalTransformationin20174. KeyTechnologyTrends7. DigitalTransformationMyths9. Microsoft’sApproach12. Recommendations

Contents

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Defining Digital Transformation in 2017

So, let’s start by considering what digital

transformation is, and what it isn’t in 2017. Digital technology allows humans to interact

electronically with the ability to build intelligence

out of it. Transformation is what it can provide when it’s used strategically to respond to change whether that is changing customer demand,

shifting technology or a changing market and competitors. Too many programmes, systems, platforms and tools will profess to digitally transform your business by providing you with a new way of doing things but unless that tool is

delivering intelligence that you can act on, it is never going to be a transformation.

There has never been a better time to see digital transformation in action than now and what is really interesting, is that it’s not just the large, successful companies that are demonstrating it. There are hundreds of lean start-ups with agility and vision to take a digitally driven approach across all areas of their business so that insight

is fuelling strategy and growth. It’s trickier for established businesses with existing systems, processes and skillsets to assess where they should be and the roadmap to get there. If your business is in this camp, your first consideration

is your customers. How have they changed and how are they likely to change? How is your competition responding? What technology would help you to meet your customer needs?

Then take a look at where your business is right now. Is this about evolution or transformation? It’s about timing. Evolution is when you catch necessary changes along the way and adapt to stay on top of your customers’ requirements. You are constantly evolving and so any technological advancement is an addition to what you are already doing. Transformation is when you are behind with that so that when

you see a digital technology or approach that is shaking up your industry or that your customers are crying out for, it’s a more noticeable big step to get to that point.

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Ease of transaction is the common theme for the technologies that are shaping the way we live, work and trade. Think of online banking, of email, of digital news, of online shopping and of course, social media. Once described as technology fads and lightly mocked, they have inherently changed our habits. Customer service is immediate, answers are required yesterday, and orders are made and delivered within hours, not days. Small players can have the same audience as big players and customers are driving innovation through their behaviours and the insight we have on them.

There are five technology trends that are shaping the landscape of insurance right now, enhancing efficiency, precision and data security in ways that will inform underwriting, pricing, claims, regulatory compliance, and customer experience.

Key Insurance Technology Trends

Also known as IOT, this is about Cloud-based machine-to-machine communication. Networks of data gathering sensors are the engines

here, generating data that instigates an action designed to improve efficiency. Analysis and AI offerings are transforming both the insights and the

ability to act on them.

The effect has been huge and with more and more consumers and

businesses benefiting from the improved customer service and outcomes, it’s placing users right at the centre of the digital experience in what some are calling The Internet of Me.

1. The Internet of Things

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Key Technology Trends

2. Artificial Intelligence

(AI) is used in many ways. The more glamorous headlines include how it is used

to fly planes, to make recommendations on Netflix or Amazon, to diagnose x rays, to go through legal evidence and even to serve you search results. Microsoft is bringing the benefits of AI to all sizes of business so that you can use it to automate tasks and interactions in process enhancing ways. Its impact is found in its single mindedness whilst humans need to continue to deliver the lateral thinking. Across the board, AI is raising customer expectations.

3. BIG Data

Businesses are generating a huge amount of Big Data on a day-to-day basis. Big data is when you have enough of it that you can analyse it for insights leading to better decision-making and strategic changes. The difference between the companies who will flourish in the next 5 years and those who won’t comes down to one thing; actionable insight, turning big data into smart data.

It’s a basic that you must get right now so that you’re not left behind.

Whether it’s the ability to recalculate entire risk portfolios in minutes, detect fraudulent behavior before it hits, identifying the weak points in product and service sales and processing or building a more advanced approach to customer service, data can tell you everything you need to know about your business’ performance in real time, minute-by-minute.

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Key Technology Trends

4. The Platform Revolution

None of this would be possible without what some refer to as The Platform Revolution. The rapid advances in cloud and mobile connectivity are removing the barriers that many businesses face in trying to evolve or transform. You no longer need to be a vast enterprise to be able to use the platforms that will help you operate like them.

Cloud is the backbone of all the digital transformation we’re seeing. Data centres are all around Europe and the US providing organisations with unparalleled data security and back up. Microsoft has the first dedicated UK Cloud and now supports key UK businesses including the Ministry of Defence.

5. Augmented Reality

Imagine a business call where you can call up remote members of the team or your clients,

and engage with them in augmented reality. Unbelievably more natural, definitely more collaborative and surely something we will all want to be doing in the future.

The same 3D experience that brings proper collaboration to businesses raises the game for training, for repair instructions, for showcasing products, for tourism, for interior design, for office environments. It really is limitless and whilst the glasses are currently clumpy and conspicuous, just give it time.

“The three priorities of 2016 were Personalisation, People and Platforms.”

Forrester May 2016.

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Digital Transformation Myths

Myth 1:Digital is a back office issue focused on achieving operational efficiencies.

Don’t fall into this trap! Digital is not just the remit of IT. It has to be driven from the top down with technology that has been scoped to meet corporate goals. Yes, IT will have to work with the changes to help create the new IT infrastructure but it should be a board-endorsed initiative with full understanding of the benefits and requirements for success.

With that, you can do so much more than improve efficiencies. The right technology allows your business to compete in a larger playing field, to be closer to your customers, to use data to maximise your opportunities and to increase your turnover. Whether you are evolving existing practices, or you are transforming, technology must have buy-in across the business for it to succeed.

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Myth 2:Creating a digital business unit and staffing it with digital staff is enough.

This is another effective way of limiting your digital success. It takes thinking back to a time when having an online presence and some digital channels were sufficient. That was a long time ago.

Customers are at the heart of digital transformation and their expectations are high. 24/7 customer service, immediate answers, quick and smooth order fulfillment, informed interactions, best in class product and service delivery. None of this is achievable without a technology-enabled culture that threads through every facet of your business. Successful digital transformation demands a culture sponsored by the leadership that promotes innovation, encourages risk taking and empowers employees at all levels of the company.

Myth 3:It is too late to adapt and grow.

Kodak didn’t respond to the disruptive impact of digital photography. HMV didn’t see the boom in digital music streaming

or ownership coming. Blockbuster underestimated their customer’s consumption demands and gave way to Netflix. Borders Books left changing too late, failing to see that customers wanted

to shop online.

These are clear examples of being late to the party. If you take action now, you can avoid this but you need to be honest with yourself about the changes

in your customers, your market and your competitors, then work out how to take them on.

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Microsoft’s Approach

All CRM systems are not created equally and the likelihood of success is further influenced by the scoping and implementation stage. If it’s done properly though, businesses using CRM will already be benefiting from improved customer experience, accountability throughout the organisation and more meaningful data. The benefits were profound but Microsoft knew it could go further. Away from customer service, sales and marketing functions, most businesses have a raft of other functions producing products, designing services and ensuring customer deadlines are

met. ERP systems have been handling their requirements. That means there are two sides to the business working hard with their view of the customer. Yet they don’t have a 360-degree view of any one customer. So, a customer service gap remains and their insight is lacking. Productivity is not what it could be and employees are not empowered.

And here’s where Dynamics365 comes in, gluing together the final silos of data and processes of ERP and CRM bringing customer service, sales, marketing, field service, finance and operations together. It’s one big feedback loop for businesses

of every size, starting with what they need and entirely scalable. So business processes essentially start to become insight advantages regardless of what size of business you have.

Microsoft’s common data model is the backbone of each Microsoft offering, eradicating siloes that cause customer service and sales blockages. All of the systems here can access all of the

information on all the other points easily so you can get a complete customer view, and create a complete production flow across the whole business wrapped up with business intelligence.

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Microsoft’s Approach

We’ve seen it in online businesses such as Amazon and Booking.com but it’s really moving outwards now. A good manager could always get a good gut feel and some reporting. This is changing to minute-by-minute reporting and business decisions that are based on actual facts. So, how many phonecalls have been made, how many orders have been placed, how many complaints, the number and type of customer service requests. There is Management transformation just within that – not waiting for a report each month that somebody has had to spend time collating from disparate systems.

For businesses to succeed in the new digital era, they have to have processes and productivity that enable superior customer service throughout the whole organisation, employees have to be empowered with information and protocol that is quick and easy with no time delay for the customer. Every interaction is an opportunity for actionable insight.

“Technology management is also often a cause of bottlenecks, with 41% citing this as a

critical process challenge. As a result, in 2016, firms aimed to eliminate process bottlenecks

within technology management organisations.”

Forrester May 2016.

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Dynamics 365 for Insurance

• Sales and Customer Service ramps up a gear with the new ability to connect communications and interactions to one customer record across the full business. Tools like Skype and Yammer complement the ability to manage projects with visibility and instant access.

• Portals allow customers to self-serve information.

• Reporting can be stepped up with Power BI.

• Voice of the Customer can automate and interrogate surveys.

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Recommendations

1. Take some time aside with your team and consider where your customers’ habits and expectations are now. Understand what they are asking for and what tech might help you to meet those requirements. What is the competition doing? Is there a direction of travel that you are missing?

2. Start with your strategy. Always. Never jump to technology because it excites you. Know that it meets a corporate objective first.

3. Get an outside view of your systems, processes and corporate objectives. Chances are

that you will be starting with the basics by making sure your CRM is doing what it needs to do, that your processes are intelligent and that your data is being put to good use.

4. If you are looking at new systems, look at the bigger picture of integration of where you

are now and where you plan to go. Scalability is crucial.

Our view is to stop and take stock. This isn’t about dramatic action. It’s about a considered approach marrying strategy with corporate goals. Your ultimate business objective is to be able to cope with change.

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