THANK YOU FOR SUBSCRIBING
We’ve all heard how the world’s biggest companies don’t sell products but facilitate experiences. Digital technologies have given rise to disrupters that have changed how we travel, vacation and buy just about everything. These organizations can be described as network orchestrators and, according to the Harvard Business Review, they deliver the highest average multiplier (price to revenue ration) when compared to other types of business models. Their success is driven less by what they offer, but how they do so. These organizations create a network of interconnected, complimentary businesses where each shares responsibility for creating value for customers. They may sell products or services, but increasingly, they may build relationships, share advice, collaborate and deliver unique experiences. Their ability to offer hyper-personalized, convenient services that seamlessly integrate into our lives have redefined expectations and raised the bar for all industries.
Now Insurers are feeling the pressure to change too, as customer preferences change fast. For example, a new EY report found that millennials are less inclined to maximize wealth (e.g., through investing in insurance), instead preferring to spend on experiences such as travel and recreation. Customers also want a more streamlined, efficient decision-making journey where everything they need and want is available in one place, through a single port of access. How can the insurance industry shift from the traditional financial protection and compensation model to a new paradigm that focuses intrinsically on the customer?
Creating value through connectivity
Entering this new territory requires Insurers to leverage a digital platform for connectivity. These platforms can enable insurers to redefine their role in the customer’s life, and create the connected, seamless experience they demand.
For example, a health insurer could become a full-service health care concierge for every stage of a customer’s life. Wearables and medical monitoring devices allowing customers to track, control and share information such as weight, heart rate, blood sugar, exercise activity and much more. With customers’ permission, Insurers can share this data within a connected health ecosystem – medical practitioners, the local gym and supermarket – for monitoring and proactive action. Collaboratively and in some instances, intuitively, the network works together to help the customer lead a healthier and safer life, from scheduling medical appointments and expediting treatment through to lifestyle support by recommending meal plans, promotions on health ingredients at the grocery store, or offering discounted gym membership.
In this way, insurers can use greater insights into customers’ lives to offer them more value – crafting unique and highly personalized products and services based on what the customer actually does, not just who they are. Companies that can translate this data into insights can boost efficiencies across their people, process, product and service, and ultimately deliver best-in-class customer experiences.
But this competitive advantage can only be accomplished through a cloud-based and scalable platform that allows multiple participants to connect to it, interact with one another and create and exchange value in near- to real-time.
The Microsoft Azure platform can be an easy choice for organizations that are looking to test new business models. It is secure and scalable, offering many of the necessary components and data assets as well as an ecosystem of business partners that are already connected. This provides support for organizations as they move towards a network orchestration model and offers the potential to grow the role of CIO from supporter of business initiatives to identifier and developer of net new revenue.
“The keys to success are having the right cloud platform in place to manage the infinite amounts of data generated by the network and be able to process it at speed to tell the complete story about the customer.”
Chris Henderson EY Asia-Pacific Data & Analytics Advisory, Partner
Five steps to becoming a leader of the digital marketplace
The CIO with an eye to the future will steer their business in the right direction by considering new revenue streams that are possible with this network ecosystem model and elevating product and service offerings to meet and exceed customer demands. Successful change extends beyond simply investing in technology – digital innovation must be accompanied by a five-step approach to deliver enterprise-wide organizational change.
1. Assess whether your current business model is viable in the digital age.
If you’re still trying to sell policies to customers in the traditional low-engagement format, it may be time to consider how to instead anticipate their broader wants and needs and deliver these seamlessly via a network ecosystem model.
2. Align your operating model to your business model.
Support strategy with the right mix of skills and processes to successfully execute a new business model. Consider how to use artificial intelligence and cognitive computing to augment human capabilities.
3. Build a workforce with the right digital skills
Technical skills are in high demand, but organizations also need to address the soft skills gap. Communication, critical thinking and adaptability are as important as computer programming skills.
4. Design digital metrics that more accurately measure success
Network orchestrators adopt metrics that measure how successfully customers navigate their ecosystem– for example, the amount of friction encountered during their online experience.
5. Make the shift to a digital culture a priority, not an afterthought
In a technology-driven world, it can be easy to overlook the human element. Make sure you bring your people along with you on the transformation to digital leader.
Is this the beginning of a broader shift for financial services?
Adopting a digital platform such as Microsoft Azure to enable the orchestration of connected ecosystems is a trend likely to grow within insurance, and across financial services. These platforms, if supported by broader organizational change, offer huge potential for companies to meet a more complex set of needs and secure competitive advantage in a converged and collaborative world
The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.