Best's Review


Beyond Digital

The journey to digital evolution moves insurers from transformation to innovation to reach customers.
  • Pat Saporito
  • June 2020
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The insurance industry has been addressing digital transformation—the fourth industrial revolution—for the past five years.

Companies are at different stages of maturity in their digital evolution. Mature organizations have transformed as many applications as they feel feasible, while others are still on that journey or have elected to focus on new applications.

However, going digital is no longer differentiating. A company's digital maturity is not measured merely by how many systems or processes have been transformed, but how the organization has evolved its digital thinking and how well it can leverage data and analytics holistically across products and functions to set itself apart from its peers.

Insurers need to ensure that there are synergies in the data, technologies and analytics, as well as in their adoption of those tools.

The initial impetus for digital was driven by SMAC technologies (social, mobile, analytics and cloud). Today, almost every insurer has round-the-clock, mobile applications for buying, claims and customer service.

Many have augmented their internal structured data with mobile and text data for sentiment analysis and other advanced analytics. Analytics have become embedded in our transactional systems for quotes, underwriting, claims and service. Most insurers have moved their data and applications to cloud infrastructure environments. Business value in terms of improved customer and producer acquisition and growth, increased operational efficiency and lower information technology costs have all been achieved.

But in order for insurers to innovate and remain competitive with their peers and other broader ecosystem players, they will need to harness and apply the next wave of technologies, which Accenture has dubbed DARQ, or distributed ledger technology (blockchain), artificial intelligence, reality and quantum computing.

Distributed ledger technology enables transactions without middlemen or third parties. Smart contracts, such as electronic surety bonds or reinsurance bordereau premium and loss processing, are good examples of that technology.

AI leverages ever-growing volumes of data, automates business processes and feeds advanced algorithms for underwriting, claims and service.

Reality—virtual, augmented or assisted—facilitates new immersive, engaging customer environments for advanced risk management, health and safety management, loss control training and education, and claims and customer service support.

Quantum computing provides more robust processing and platform capabilities to support this next wave of technologies and provide improved data privacy and security.

Understanding customers at a holistic level, along with recognizing and anticipating their changing needs and being able to respond to them, is critical to ongoing success. This means not only being part of customer-centric ecosystems but also creating those networks.

Several years ago, South African multiline insurer Discovery SA created its own ecosystem. Its Vitality Rewards program suite, which includes Vitality Drive, Vitality Health and Vitality Money, incents and rewards customers for “Driving well, living well and banking well.”

This customer-centric program uses each of the SMAC technologies, along with some of the DARQ tools. In exchange for their data and participation, customers receive discounts or noninsurance purchase credits that contribute to lower risk and reduced premiums. As a holistic program, it drives customer retention and broader customer wallet share.

Discovery is “doing well by doing good” for its customers and has advanced beyond mere digital transformation to innovation.

Best’s Review columnist Pat Saporito is a consultant and author of Applied Insurance Analytics: A Framework for Driving More Value From Data Assets, Technologies and Tools. She can be reached at

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