The benefits of investing in technologies such as artificial intelligence (AI) and big data are wide ranging; they include higher revenue, increased efficiency and stronger customer relationships. Our ongoing study of insurance organizations’ digital maturityi revealed as much when it found that 85% of respondents said they were investing in their digital agendas to explore these technologies.
In the past, however, a fragmented approach to digital adoption has impeded insurers’ ability to implement the process and business-model changes necessary to drive revenue, profitability, and other targeted business outcomes. This fragmentation has meant that initiatives are implemented in isolated pockets and a digital plan is as good as non-existent.
Digital transformation requires a clear strategy that is based on an accurate understanding of the digital “as-is” state — that is, the company’s “digital maturity.” This will help insurers to be better positioned to create and apply a comprehensive digital plan to stay ahead in this highly competitive industry.
Measuring digital maturity
Our Digital Maturity Diagnostic (DMD) framework uses insight gleaned through self-assessments by senior business and IT executives at multibillion-dollar companies. The tool examines five areas of digital maturity:
- Core business functions.
- Strategic innovation.
- Real-time insights.
- Human understanding.
- Agile organization.
To assess digital maturity, the framework compares and analyzes responses against a benchmark database. In essence, it measures two fundamental qualities essential to any digital transformation effort — a company’s digital capabilities, or the degree to which it embraces digital; and a company’s transformation capabilities, or its ability to drive and embrace change.
Progress varies across the industry
Although our DMD survey is ongoing, it has already uncovered a pattern in which insurance companies fall into one of three digital-maturity categories: