Digital transformation in insurance is relatively nascent compared with some other industries. Most insurance organizations are in the early stages of DX maturity and technology service providers’ offerings and delivery models are still evolving.
Many vendors offer a broad portfolio of DX services and offerings to their clients, backed by domain and technology expertise. Many have also successfully engaged their clients by using traditional delivery models that have worked well over the years. But client needs are evolving as digital technologies mature (e.g., artificial intelligence or AI), and this naturally leads to an expectation for innovative use cases and DX services at lower cost.
As insurance organizations undertake a transformation journey to deliver contextual and value-centric products and services in response to changing customer expectations, they need to look for technology partnerships that can help them address their transformation objectives at an organization level. The IDC MarketScape: Worldwide Digital Transformation Service Providers for Insurance 2018–2019 Vendor Assessment study highlights that these organizations will benefit from strategic technology partners that can help transform their omni-experience capabilities, deliver usage and value-oriented offerings, realize frictionless insurance, and build cognitive capabilities to remain sustainable in an age when traditional insurance business models are seriously challenged by market disruptions.
According to the research, to make the most of technology partnerships to accelerate their DX journey, insurers should look for the following when selecting vendors:
- Core strengths of individual vendors and their areas of improvement, whether that be industry knowledge, digital technology expertise, or attitude to innovation
- The vendor’s ability to be a committed, long-term partner to transform business
- Its ability to help address the gap in digital skills in the insurance organization
- Its commitment to devote experts to specific technologies for DX on a long-term basis
- Its openness to offer innovative outcome-based delivery options
- Its ability to help build or lead a connected insurance ecosystem
- Its ability to offer phased horizon-based delivery that breaks DX complexity down through meaningful functional chunks or use cases (IDC’s Worldwide Digital Transformation Use Case Taxonomy, 2018: Insurance [IDC #EMEA44106018, July 2018] lists several niche use cases that can empower insurers to meet and exceed customer expectations in the evolving marketplace)
The IDC MarketScape includes a 2018–2019 assessment of 13 vendor companies servicing insurance organizations across the globe in their DX initiatives. Although an insurance organization’s specific digital objectives and requirements play a critical role in determining which technology partners should be considered as potential candidates for engagement, the detailed guidance on the aforementioned factors can help in the selection process.
The IDC MarketScape research is a quantitative and qualitative assessment of a vendor’s ability to enable insurance organizations to succeed in their DX initiatives. The evaluation is based on a standardized and comprehensive framework and set of parameters that are most conducive to success in providing DX services in the short and long term. The general market’s perception and technology buyers’ perception of vendors’ current capabilities and their attitudes to innovation to help insurance carriers and intermediaries thrive in an extremely challenging marketplace are key components of this evaluation.