By: Carla Gregory, Senior Principal
Insurers continue to face disruption within the industry and from companies outside of the industry, and they are looking to operational excellence programs to help drive and improve performance across the organization, technology, and leadership. While in the past, operational excellence was more or less a synonym for “process improvement” or “cost reduction” it now incorporates a focus on effectiveness as well as efficiency.
1. Customer Experience vs. Customer Satisfaction
It is in the area of customer experience that we see the greatest impact from non-industry competitors. It is no longer enough to provide customers with a satisfactory interaction as compared to another insurer. Companies like Apple, Amazon, and Netflix have raised the bar on customer expectations. Within the industry, companies like Policygenius, Oscar, and Lemonade all seek to be easy – easy to understand, easy to use, easy to find insurance. Asking customers whether they are satisfied is no longer enough, and leading insurers are investing in customer experience programs as a way to drive operational excellence.
2. Millennials as Customers
Millennials are the largest living generation, but their worldviews and beliefs differ significantly from the generations who have come before. Companies like ZipCar and AirBnB have figured out how to address the sharing economy because Millennials prefer access to products and services that they need when they need them. Insurers must re-think both their product development lifecycles and distribution models – they are applying principles of operational excellence to drive speed to market and portfolio management.
3. Intelligent Automation: RPA, Machine Learning, and More
Intelligent Automation must be part of an insurer’s overall Digital Strategy because it is changing everything about operations and will become even more essential to operational excellence going forward. Finding the right opportunities to deploy the new technologies is key to cost-effective operational excellence that delivers a return on investment. Nearly every insurer has an RPA team, but not every company has chosen the right processes to automate. The right automation provides customers with the self-service they have come to expect, from their experience with competitors across industries.
4. Big Data & Process Efficiency
Big data is playing a huge role in streamlining processes that before relied on human estimations. Big data not only improves accuracy, but it also reduces time testing systems, ultimately tightening operations, lowering risk, and guiding smarter business decisions.
5. Focus on Company Culture
Beyond technology and customer-centricity, another type of user must be considered to improve operational excellence, and that’s the employee. Millennials are now the largest generation represented in the workforce, according to the Bureau of Labor Statistics. Their motivations for taking and keeping jobs differ significantly from past generations, and they are motivated by belonging and working towards a greater cause. This employee group will put increasing pressure on insurers to create a company culture.
Organizations that invest in these trends have the potential to lower risk and operating costs, increase revenues, create value for customers and shareholders, and achieve operational excellence in the new year.
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