The digitalization of the industrial insurance sector involves very complex and individual processes. In such an environment, a change process that takes into account the requirements of your own organisation and the market participants is recommended. Even more, the digital transformation can only succeed if employees, customers and market participants are truly integrated.
Digitalization enables both standardization and individualization and creates new scope for corporate profits. After all, digitalization allows new products and business models to be developed. But the digital transformation of the organization also demands a great deal from those involved:
- Familiar work structures are dissolving.
- Workflows, processes and the understanding of leadership must be rethought.
- Learned skills, familiar actions and tried and tested mechanisms suddenly become less important.
- Innovation cycles become shorter.
Continuous change triggers uncertainty among employees. They are required to change their own role, learn new things and take on other tasks.
Insurance industry now focuses on the customer side
The insurance industry is still facing some of the distortions associated with digitalization. Compared to the automotive industry, for example, it is historically less innovative. While internal digitalization has been progressing there for many years, it is only recently that it has become visible from the outside in the insurance sector on the customer side.
In the insurance industry, process orientation, automation and location-independent data input play a major role. This entails changed tasks for employees, different control logics in the company, and in some cases structural effects on the entire organization. On the customer side, on the other hand, customer experience is the main topic: How does the customer actually experience his insurance service provider?
Digitalization strengthens the importance of the human component
It is therefore also clear that the digital transformation in no way makes people superfluous. Where human contact and trust are important, such as in consulting, there will even be a renaissance of personal exchange – whether in the field in conversation or through the media. For industrial insurance brokers, for example, digitalization offers the opportunity to change customer perception in this context.
Up to now, customers have usually had contact with their brokers in resource-intensive or even negative contexts: when an invoice has to be paid, the annual renewal questionnaires come in or, in the worst case, a claim is made. The more digitalization relieves the broker of work that can be automated, the more he can make an effort to link positive experiences for the customer with his service. Digitalization creates freedom and opportunities for further development of the customer experience: What does the customer experience when he contacts the broker or insurance company? How quickly is his enquiry answered? Which additional services make his work easier? This requires new and creative solutions.
In the energy industry, which also tends to be more traditional, this customer-in-focus process began some time ago. The driving factor: products such as electricity, gas or heat are initially not distinguishable at all. In fact, it doesn’t matter who supplies you, electricity is electricity. Suppliers in the energy sector were very early to look at how they could enhance their performance, for example, through supplementary services and other forms of customer contact and customer loyalty.
Providing employees and customers with security
Not all employees are happy to embark on these changes. This makes it all the more important to allay their fears in connection with digitalization. Central credo: Communication creates trust. The goal is to draw a picture of the future in which everyone can find themselves. The message can be as follows: No employee has to fear for his job because of the digital transformation. And in the direction of customers: Digitalization makes things better, more flexible, more open – with more service.
Digitalization creates new products and services and creates jobs rather than destroying them. Only the type of activities will change, because routine work will be increasingly eliminated. An essential aspect of everything new is the error culture: it must be communicated that innovation always consists of the successful and the unsuccessful and that mistakes can be made.
Why is change support so important?
If you see the digital transformation as a pure IT project, the most important opportunities are missed: strengthening the market position, redesigning customer relationships, developing employees further. If customers and employees do not understand how they can benefit, projects become tough, slow and lose their effect. The return on investment needed to handle such projects also decreases. Those who fail to successfully manage digitalization will sooner or later perish in the competitive market situation. Particularly in the insurance brokerage business, where people, advice, empathy and understanding play a key role in shaping the success of a company, it would be a high risk if digitalization were not accompanied by a change process in terms of action and culture.
The digitalization of the insurance industry is in full swing. Whereas in the past it was primarily a matter of internal changes, the focus is now shifting to an external view. In addition to the many opportunities, such as the development of new products and business models, the strengthening of interaction with the customer and the elimination of tiresome routine work, the changes are also accompanied by fears. If the digital transformation is to be successful, it must therefore not be viewed as a purely technical process. Only when accompanied by a change process are all those involved in the process able to accept the challenges and shape them positively.
Marco Edel, who has been with GGW for 15 years, originally comes from process business development theory. At GGW, he is responsible for all processing divisions, i.e. the individual operating departments. As a member of the Management Board, he is largely responsible for communication within the framework of strategy and change.
Marcus Warnke has been advising companies for over 25 years and supports people and organisations in change processes. Behind this is organisational development, i.e. the development of leadership, organisational structures and processes – and also taking into account corporate culture and the “taking people along”. The latter is of great importance to him and shapes his consulting activities.
This text was created in the context of a project cooperation between mgm and the insurance broker Gossler, Gobert & Wolters Gruppe (GGW) from Hamburg. In the series different participants write from and about the practice.