Recognizing the technological winds of change, P&C insurers in the post-pandemic era are revising their digital transformation plans, with many accelerating them. I recently spoke with Karen Furtado, Partner at SMA, to explore the topic of two-speed transformation and understand what it means for today’s insurers.
As the name indicates, two-speed transformation describes two speeds or levels of digital transformation. Karen calls the first speed Incremental Transformation - using familiar growth strategies, current products, and business models along with the technology we have today to make incremental changes. The second speed is Innovative Transformation – focusing on future products and services, rethinking the business of insurance. Both transformation types are happening in the industry, with the most common being Incremental Transformation. But why is that?
Karen explains that Incremental Transformation focuses on foundational capabilities – core systems, open and agile technologies – to support new agent, customer, and constituent experiences. I agree that this step is key for insurers if they want to really transform their business and change the game through innovative transformation.
According to Karen, moving beyond Incremental Transformation to Innovative Transformation requires rethinking strategies and reinventing the way things are done, so insurers can ultimately take advantage of new technologies like A.I., chatbots, and deep analytics. This doesn’t mean creating new products; it means delivering existing products in a better, more efficient way, while optimizing existing resources.
For P&C insurers, embarking on this two-speed digital transformation process will increase productivity, drive efficiency, and enable better business outcomes.
Watch the video to learn more and see the entire conversation.