Digital initiatives are a growing priority among insurers industrywide. At a high level, digital strategy rethinks relationships between people, information, and processes—leveraging existing and evolving technologies to streamline processes and experiences.
Digital projects can include building customer and agent portals, enabling online direct sales, or other market-facing initiatives. The costs of these projects are simple enough to determine, but it can be challenging to develop metrics that measure project benefits and value and appropriately attribute these measurements back to the project. If a new agent portal drives growth, for instance, will the insurer be able to measure and attribute that new revenue increase to the portal launch?
In practice, carriers have found that they can determine the success of digital investments by measuring business growth, efficiency, direct savings, and customer satisfaction. Each metric has its benefits, drawbacks, and caveats. Measurements like these are critical for understanding digital project success and value—but organizations should plan a way of distributing credit across several business units.
Growth in business and client counts, for example, is one of the clearest benchmarks for success as digital projects often have a more direct line to sales (e.g., portals for agents or policyholders to perform direct transactions). However, sales and growth are not always equivalent. Digital channels can redirect sales from non-digital channels rather than result in a net sales increase. Digital channels that launch to support a new line of business, on the other hand, will result in all new sales—but the organization cannot solely give credit to the digital project for this growth.
In order to measure the success metrics of a digital initiative, the first step for insurers should be measuring the current state processes. Without understanding where the organization starts, it’s difficult to validate the impact of a new project. Insurers need an honest reckoning of what real project success means beyond simply putting new technology into production. This will allow them to rapidly adjust a system to achieve the best possible results and can help validate goals and educate carriers on how to improve on all future initiatives.
For more on insurance digital projects, including case studies and what metrics carriers use to measure success and returns on technology investments, see Novarica’s latest brief: Quantifying Digital Value in Insurance.
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