Insurtech Isn’t Just Software, It’s a People Thing Too

Insurers leaders must focus on the transformation and less on the ‘tech’ when it comes to realising digital transformation, says Matt Carter, Practice Director of Altus’ Specialty Markets team.

Let’s focus on the phrase, “Digital Transformation” – the digital is often seen as the core of the change, as many focus on the shiny new products coming into an organisation, with the transformation often assumed to be delivered by the technology. This is just not true. Leaders of organisations must, to avoid becoming another statistic where a projects fails to deliver, shift this focus. As per McKinsey in its 2018 survey, the success rate for digital transformations is low. Only 16% of respondents said that their organisations’ digital transformations have successfully improved performance. In my opinion, this is because the emphasis is likely to have been too much on the digital and too little on the transformation.

Impact is felt by people, and we as a rule are resistant to embracing change

The reason change is hard to execute, and transformational change harder, is because not enough consideration is given to the human factor. Organisations can sometimes fixate over establishing and detailing the business case required to support the change, focusing on selecting the right solution from a shortlist – which is important. However, in my experience of delivering complex change (be that through mergers and acquisitions of businesses, to new software and platform implementations), it is the people that hold the keys to success or failure, period.

The role of leaders in an organisation undergoing a transformational change is to signpost the direction of the business and the opportunities the transformation will deliver for the business and its employees.

Turkeys do not vote for Christmas

For employees, in many cases when faced with any new ideas or initiatives, their first instinct is to resist it – it’s in our DNA as humans. Therefore, employee buy-in is critical to the success of any transformation project – digital or not.

Change is often referred to in terms of “bottom up” or “top down” – this reflects which area of an organisation is the primary driver of any change – the boardroom or the shop floor. Again, in my experience, it requires involved sponsorship from the executive level, but it must have buy in from the shop floor to have any real chance of success.

Now, as is the case with much transformational change in Insurance, technology is at its core. This plays directly into another one of our significant concerns, in that “technology could end up replacing me” – that is, people worry about the end game with technology more than what technology can support them with today.

Overcoming this and other concerns is about ensuring that digital transformation is communicated in a positive light and that change, through deploying new technology, brings with it new learnings, skills and opportunities.

Implementation is not adoption

Technology is only part of any transformation. From my experience in how system implementations require people management and people alignment, I would say this is no more than 40% of the end result, so focusing 100% of your effort picking the right system and technologies starts you way off the mark from the get-go.

It is not unknown for organisations to simply measure logins as a measure of an implementation success. Given that staff are your most valuable assets, simply buying a system, implementing it and giving them a login will never relate to adoption or true engagement. This is especially true if an alternative process or system still exists. Adoption of a system (and change more generally) requires robust communication, ensuring the users are part of both the selection and implementation phases, receive good user training prior to going live and once live receive excellent responsive support.

But more importantly perhaps, all this must be wrapped up in communicating why this change / new system is required, and how will it make staff’s life better. Get this message across and clear adoption will follow, and with it, transformation success.

Perfection is the enemy of progress (and digital transformation)

Systems aren’t perfect and will rarely resolve all issues. In an organisation or a system that is being replaced, digital transformation requires organisations and its people to accept and be able to compromise. For this to happen, the people must understand that any compromise is about the greater good and is about the destination or “north star”, not the key press or the mouse click today.

My experience has shown that when a system does not perform a function for a user the way ‘they expect it to’, the entire system can often be perceived or deemed flawed. The belief that functionality does not exist when in fact it does, but has not been explained or shown, can bring implementation to an abrupt halt, and with it, any chance of transformation.

To avoid these real transformation risks, leaders are required to have strong people skills and influencing capabilities, but more than that, they should also be doers who work alongside those impacted and are prepared to roll their sleeves up to support them.

Why do Insurtechs focus on adoption and user experience

Many Insurtechs operating in and around the insurance sector focus on delivering solutions that place user experience at their core. I believe this is primarily for two reasons – 1) to blatantly demonstrate what using a well-defined and intuitive system built on modern design principles looks like (unlike legacy systems they seek to replace) and 2) they know that, to be able to scale, the system requires users to be able to use it with minimum amount of hands on training. To achieve this, there are many videos, help files and step-by-step guides made available online, putting the user in control.

However, there is another element many insurtechs recognise as vital, and that is responding to users’ feedback and releasing features that the user base has suggested. Whilst all software businesses do this, it is the speed and transparency that sets more modern software business apart from the older incarnations.

As a result, the people (customer) factor is placed higher than revenue in importance and as a result, delivers advocacy, referrals and a live feedback loop that improves the solution – and in turn, the business developing it.

Realising Success

Digital transformation is more behavioural psychology than system implementation. It’s vital to build trust with your people, sign post the benefits of the future, understand how ‘nudges’ help adoption and be sympathetic to all of our natural resistance to change

Making change about people is never more relevant than in the people centric to the London Insurance market. I am a technology evangelist, but technology on its own is useless unless you get people to adopt it and connect with each other using it. By creating the network effect of people adopting and using new systems, as they are intended, transformation benefits will really start to be realised.

Successful digital transformation is about highlighting the value clearly, to both the business and its people. Technology is just the enabler, never the hero.

 

 

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About alastair walker 8773 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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