Improve Speed to Market in a Consumer-Driven Insurance Environment
The concept of speed to market has come to represent more to insurers than just how quickly they can develop a product. To be sure, this remains a key component of the concept but, to succeed going forward, insurers will need to define “speed to market” in broader terms that encompass product development, geographic expansion, distribution channel diversification and, perhaps most importantly, customer service.
Behind this change is a fundamental shift in how insurance companies differentiate themselves in today’s consumer-driven marketplace. Insurers have traditionally competed on product features, where the uniqueness of a given product alone set it apart from the competition. In today’s market, however, an excessive feature set can be a detriment. Consumers expect to be able to quickly understand the products and features available to them and, once they make a choice, then initiate and complete an insurance purchase in a matter of minutes, especially when interacting in an online or mobile environment. To offer that kind of experience, insurers need products in their portfolios that are both intuitive, so consumers can quickly understand them at the point of sale, and simple, so as to enable an automated underwriting and issuance process.
With the complex products of the past now difficult to market, distribute and underwrite, insurers can no longer rely on uniqueness alone to establish market differentiation. Instead, they’re learning that their products have to go beyond the basics of indemnification to deliver continuous value.
This is at the heart of speed to market’s evolution. As the very idea of the product has expanded, so too must the concept of how an insurer can “speed” that product’s delivery to market and, later in the process, accelerate rate refreshes and other adjustments. For an insurance professional tasked with improving speed to market, this means there are more ways than ever to accomplish their goals – some that take a traditional approach to improving the product development process and some that focus on speed as it applies further down the value chain. Below are six strategies insurers can leverage to realize not just better speed to market, but better speed to value.
1.) Empower the Product Owner
Successful product development requires both speed and the ability to tailor a product to the right market segments. The inability to accomplish these two tasks concurrently leaves most insurers with no choice but to follow rather than innovate as they attempt to grow geographically or break into new distribution channels.
From this perspective, speed to market and product configuration are inextricably linked. So, in many ways, improving speed to market is an exercise in limiting IT involvement in the product configuration process. This can be accomplished by externalizing rules and calculations from administration systems. By empowering the business owner with as much control over product configuration as possible, insurers can reduce IT reliance and make it easier to quickly tailor products for particular market segments.
2.) Embrace an As A Service Mentality
Quite often, the biggest drag on speed to market is the upfront time associated with establishing and customizing a system for practical use. As a Service solutions, by their very nature, do not require the kinds of large upfront investments that often cause those delays.
Insurers can shave months off of the typical implementation timeline associated with more traditional, labor-intensive approaches by exploring a combination of Infrastructure as a Service, Platform as a Service and Software as a Service solutions that are available in the marketplace. By leveraging the right mix of these managed services, insurers can totally transform their go-to-market strategy and free themselves up to seize emerging market opportunities.
3.) Consider Human Capital as Part of Your Managed Services
Deploying a full BPO solution represents perhaps the highest order of managed services, encapsulating all the benefits of other as a Service solutions, but with the addition of human capital. That’s no small difference. In many ways, insurance is a unique and complex industry, and it can be difficult to quickly find or develop workers who understand the business.
Effective use of business process services couples industry-experienced service professionals with advanced technology to provide a continuum of service options, from standardized to highly customized. This approach gives companies of all sizes the ability to quickly access the same robust functions used by the industry’s top tier insurers.
Often, use of externally available Business Process as a Service (BPaaS) solutions can take months off of the deployment schedule versus internal development. Using a BPaaS approach, one carrier was able to deploy a major new product in less than 4 months versus internal estimates in excess of one year.
4.) Introduce Lean Start-Up Principles
The advantages of an as a Service approach are increased if an insurer introduces cultural and strategic changes that complement it. With an eye on maximizing returns with minimal risk, lean start-up theory suggests going to market with a minimum viable product (MVP) that has no more than the core features necessary to be deployed, then iterating until the product finds a foothold in the market or becomes unviable.
When applied to the insurance industry, this strategy allows a carrier to quickly test if there’s an appetite for a product without incurring the large expenses associated with a full product launch. For new products, this limits exposure and lets an insurer test more products in a shorter period of time – increasing the chances that a successful new product will be introduced. Beyond that, it also establishes a culture and a set of business processes that are optimized to quickly and effectively respond to customer needs and then fine tune an existing product accordingly.
5.) Leverage Partners’ Knowledge and Product Expertise
Many insurers make the mistake of only looking internally for opportunities of re-use. Now more than ever, however, insurers can leverage the institutional knowledge of their partners to improve speed to market through business process improvement and a more componentized approach to product lifecycle management.
DXC’s Global Insurance Centers, for example, support approximately $7.6 billion in premiums with a technology-enabled business process services (BPS) framework. A pre-built , insurance-centric BPS framework enables a DXC client to immediately “re-use” an extensive inventory of best-practices and business guidelines, without acquiring or developing the necessary institutional knowledge internally.
6.) See the Forest, Not Just the Trees
New products, applications and services can often be developed and run more quickly using new methodologies and platforms. However, no single product, application or service within an insurance company runs in a vacuum. To achieve true speed to value, an insurer must take advantage of new technologies within the context of the legacy aspects of their environment that still exist and, quite often, still provide a lot of value.
To accomplish this, it’s important to focus on integration and the entire product lifecycle as a whole, rather than its discrete parts. Software is important. Infrastructure is important. Ultimate success today though is predicated on the shift to an outside-in business and technology environment. By focusing on the entire product lifecycle, insurers can ensure they’re absolutely committed to understanding their own products through the eyes of the consumer.