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Big data, mobile and the Internet of Things are key trends driving insurers to go digital. But going digital is not just the latest “new thing” or new title (e.g., chief digital officer). It’s not just about marketing or sales. It is a fundamental shift in how customers, both individuals and businesses, interact with insurers throughout the insurance life cycle and how carriers not only sell but also underwrite, adjust and provide other services. It’s about being connected to the insured and insured objects in real time, all the time. And it’s about intelligent interactions fueled by data and analytics.

To be a digital insurer, you need a digital strategy, digital capabilities, digital culture and a digital executive champion.

  • Digital strategy defines what digital means to your organization and how it is aligned with your overall business strategy. It requires looking at digital threats and opportunities, their potential scale and alternate responses. It includes looking outside your usual competitors at disrupters like Amazon or Google and determining if they are competitors, partners or both.
  • Digital capabilities include data management, analytics and databases.You must be able to access and integrate a myriad of data streams – social, machine-generated, external, structured and non-structured--in real time. Data security is also a key capability. You must evaluate the state of your current technologies to leverage digital content and to empower meaningful interactions. 
  • Digital culture is about people and processes. It includes aligning your organization; evaluating, developing or hiring digital talent; simplifying your business processes and ensuring that you are agile enough to adapt them quickly; and creating and monitoring digital key performance indicators aligned with your strategy.
  • Digital champions advocate and champion transformation. Digital transformation is usually a board-level business initiative led by the chief innovation officer or senior vice president of strategy working closely with the chief information officer or chief technology officer. A Digital Champion is an executive business sponsor who works closely with IT and the business areas.

You don’t become digital overnight. Take a "crawl, walk, run" approach. Leverage existing capabilities and extend, or develop, new ones using pilots. But instill a “fail fast, fail often” mentality; be agile enough to execute many projects and learn from them. Then extend them across the enterprise.

The return on investment can be significant. Digital leaders can achieve a significant increase in sales; they can also reduce administrative and claim costs by digitizing processes and providing more self-service.  But Insurers should also consider the cost of doing nothing--the loss of both market share and profitability to competitors, especially nontraditional ones.

Pat Saporito is senior director of SAP Global Center of Excellence for Analytics and author of Applied Insurance Analytics: A Framework for Driving More Value From Data Assets, Technologies and Tools, FT Press. She may be reached at

"This is a summary of an article published in the Technology Insight column in Best Review, titled: Brave New World.  Read the full article in Best Review and listen to the companion podcast."

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