The German insurance industry has started the digital transformation of products, services and processes. Besides the ongoing pressure to cut costs, the latent threat of the possible market entry of Google, Amazon etc., it was especially the sustainably changed behavior of insurance customers that prompted the insurance industry to launch its own transformation. The corona pandemic has acted as a catalyst for this development since March 2020 and is depriving the purely off-line infrastructure of its right to exist. But what do these challenges mean for the future course of the industry and what opportunities are there in the current phase?
- Post-Corona - what course needs to be set because of the pandemic
- Full throttle for digitization - how to take it to the next level
- Evergreen cost management - how to achieve sustainable results
- Supervision as the pace-setter - what is important for insuring companies when it comes to regulation
- Temporary co-pilot: How we support you as 4C GROUP
Post-Corona - what course needs to be set because of the pandemic
Corona hit the insurance industry mostly unprepared. Problems quickly arose, the causes of which have been known for some time but have not yet been solved. While customers needed a lot of attention especially in this situation, the business had to be transformed into the "remote mode" at the same time and some insights had to be learned painfully:
- The comprehensive digitalization of the value chain is already necessary today and not the day after tomorrow. Above all, seamless customer experiences and omni-channel capability are the order of the day.
- Process automation is essential. Negligence in the past is causing problems now - especially regarding manual processing of contribution matters.
- Working from home no longer belongs to the past, but to the present.
These findings all lead to the same conclusion: Fragmented and outdated processes on legacy systems are not equipped for such a thing. They lack the flexibility to meet today's requirements. If, in addition, response times to specialist and service systems grow from the home office into the minute range via access, a lack of performance is also an urgent problem to be solved. What's more, the challenges of the 2020s can no longer be mastered on their own. Outsourcing and dovetailing one's own service offering with cooperation partners must be standard practice in the future; the still unanswered concerns of data protection and IT security must be answered professionally and sustainably. Other industries have already demonstrated that this works.
Full throttle for digitalization - how to take it to the next level
Yes, the digitalization of the industry is in full swing. Currently, more parts are in motion than ever before. Nevertheless, it remains important to remember that lean processes are the most important guarantee of digitization and that unfinished homework in process optimization hurts more than ever. Robotic Process Automation, or RPA for short, must be taken for granted; the company's own product and service offering must be fully available online; the IT infrastructure must be put to the test and transformed into cloud-based standard software; and the topic of sourcing must be evaluated differently than before. This also means taking a close look at existing IT strategies and the company's own IT operating model (Target Operating Model, or TOM for short) - 'ecosystem' is the key.
After all, the market participants are no longer the same either. The question is still open as to how seriously Google and Amazon take the insurance business. But the insurance market is already in turmoil: new players, such as insurtechs, are emerging as players and even traditional insurers are bringing innovative and digital solutions to the market. Furthermore, customer expectations have changed dramatically. "Enlightened customers" expect fair and transparent dealings with their insuring company - and preferably "personal digital", i.e. depending on the situation, either extensively in direct contact, but in the next moment quickly and automatically again. Insuring companies are also experiencing this increasingly hybrid behavior in their dealings with other market participants, who are shifting the boundaries between competition and cooperation through "coopetition". "Survival of the Fittest" is being redefined.
Evergreen cost management - how to achieve sustainable results
Previously secure profits from capital investments are disappearing day by day, while digitization requires bold investments - not an easy balancing act for the insurance industry. The resulting cost pressure is putting insuring companies, especially the insurance IT department, under increasing pressure. It is essential to achieve complete transparency of IT costs and services in order to identify cause and effect with high precision. Once the cost units and their causes are known through comprehensive IT controlling, the operationalization of the identified cost measures can be tackled in a second step. This is a challenge, but by optimizing processes and moving away from legacy systems to lean IT, it offers a valuable opportunity not only to reduce IT costs significantly, but also to lay the foundation for new, innovative technologies. The insurance industry has an enormous potential for the use of innovative technologies with which cross-departmental cost savings and increasing revenues can be achieved. A study from 2016, for example, showed that a typical property insurer can achieve 25 percent more income with a simultaneous cost reduction of 30 percent by using innovative technologies.
Bain 2016: Digitization of the insurance industry: The 18 billion dollar opportunity
Supervision as the pace-setter - what is important for insuring companies when it comes to regulation
The continuing strict supervision and regulation of the industry remains a permanent challenge. With new obligations for consulting, documentation and qualification, stricter requirements for the investment of client funds and new compliance rules, it is difficult for the insurance industry to implement all requirements on schedule. Pragmatism seems to be the order of the day. Our experience shows: The more consistently the intention of regulatory requirements formulated by legislators and supervisors is deeply anchored in one's own organization, the greater the benefit that insurers achieve for themselves by implementing the requirements. This also means the end of a "4.0 wins" approach in which an EU requirement is quickly "implemented" between projects to renew the product range and guaranteed interest rate cuts.
Temporary co-pilot: How we support you as 4C GROUP
How does all this work? Preferably not alone - but with an experienced co-pilot who knows the route exactly. We support our customers with our years of experience in the insurance industry, in digital transformation and in project management. For our customers we are the implementation experts in the insurance industry and reliably ensure the effective and efficient implementation of e.g. transformation, digitalization and legal projects.
Our broschure for insurance
E-Booklet Open Insurance
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4C GROUP AG | E-Booklet Open insurance: How insurance companies use digital ecosystems
- Insurance and digital ecosystems
- How your service offering becomes fit for digital ecosystems
- What you should keep in mind during implementation
- How the 4C GROUP supports you in the implementation
Our experts for Insurance
Get in touch with us through Xing or LinkedIn
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Dr. Heiko Mauterer
Senior Partner
Master of Engineering and Business Administration
Master of Engineering and Business Administration
In consulting creating benefit for a customer is considered to be a given. In practice, this is not necessarily the case. At least according to Dr. Heiko Mauterer's experience in several management positions in banking. Creating true value is a key concept for him, that determines his thinking as well as his work with his clients. If applicable, all benefit aspects - in his eyes - are to be quantified and made measurable. And that's also not self-evident.
Heiko Mauterer has outstanding experience in financial services and focuses on regulatory management, Human Resources, digitization, operations and project management.
Anna Leddin
Manager
M. Sc. Business Administration
M. Sc. Business Administration
Competent, Creative, Change Driven, and Customer Focused - these are the four values that guide every 4C employee in their daily work. After several years in consulting it is especially the focus on the customer that drives Anna Leddin to develop customized solutions time and again. Her personal expertise is based not only on her business know-how, but in particular on her many years of consulting experience in a wide variety of organizations and companies, with a focus on financial service providers.
In CIO Advisory, her consulting focus is on the topics of IT strategy and IT control as well as target operating model.
Felix Hesse
Partner
M. Sc. Industrial Engineering and Management
M. Sc. Industrial Engineering and Management
What are tomorrow's business models? How will companies make their profits in the future? What spaces will digitization open up? Felix Hesse is already asking himself these questions today: With his pronounced passion for digitalization topics, Felix supports his customers in questioning their existing business models and making them fit for the future. His sense of customer needs and, above all, his sense of smart solutions help him to do this. Felix focuses on the development of innovative digital services and products and sees himself as an innovation driver - especially when it comes to creating added value for his customers. In addition, he is an expert in business model development and in "finding" new sources of revenue. For him, this is perfectly combined in the "Digitization" Competence Center.
Dr. Heiko Mauterer
Senior Partner
Master of Engineering and Business Administration
Master of Engineering and Business Administration
In consulting creating benefit for a customer is considered to be a given. In practice, this is not necessarily the case. At least according to Dr. Heiko Mauterer's experience in several management positions in banking. Creating true value is a key concept for him, that determines his thinking as well as his work with his clients. If applicable, all benefit aspects - in his eyes - are to be quantified and made measurable. And that's also not self-evident.
Heiko Mauterer has outstanding experience in financial services and focuses on regulatory management, Human Resources, digitization, operations and project management.
Anna Leddin
Manager
M. Sc. Business Administration
M. Sc. Business Administration
Competent, Creative, Change Driven, and Customer Focused - these are the four values that guide every 4C employee in their daily work. After several years in consulting it is especially the focus on the customer that drives Anna Leddin to develop customized solutions time and again. Her personal expertise is based not only on her business know-how, but in particular on her many years of consulting experience in a wide variety of organizations and companies, with a focus on financial service providers.
In CIO Advisory, her consulting focus is on the topics of IT strategy and IT control as well as target operating model.
Felix Hesse
Partner
M. Sc. Industrial Engineering and Management
M. Sc. Industrial Engineering and Management
What are tomorrow's business models? How will companies make their profits in the future? What spaces will digitization open up? Felix Hesse is already asking himself these questions today: With his pronounced passion for digitalization topics, Felix supports his customers in questioning their existing business models and making them fit for the future. His sense of customer needs and, above all, his sense of smart solutions help him to do this. Felix focuses on the development of innovative digital services and products and sees himself as an innovation driver - especially when it comes to creating added value for his customers. In addition, he is an expert in business model development and in "finding" new sources of revenue. For him, this is perfectly combined in the "Digitization" Competence Center.
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