Digital transformation has long been a buzzword, but its urgency has never been greater. Today’s exponential technological advancements redefine what’s possible. However, technology is only one of the puzzle pieces you need for a successful transformation. This new era demands a fresh perspective—not just on tools but on how insurers operate, engage customers and stay competitive. We’ve been talking about digital transformation in insurance for decades… so what’s different this time?
What is digital transformation?
Digital transformation is not a one-time project with a clear endpoint. Instead, it is an ongoing journey. It’s not about simply upgrading tools; it’s about fundamentally reimagining the way the insurance sector operates. It starts with a strategic vision and its success hinges on creating the right culture combined with technology and its adoption in the organization.
Digital transformation means doing things differently, like disruptive insurtechs. It also means doing other things than you do today, such as usage-based insurance. For instance, you can create bespoke prices for car insurance by using various innovative channels such as Internet of Things (IoT) and telematics. Furthermore, core activities should be set up digitally, like automatic acceptance in the claims department. Finally, digital transformation means discovering new chances. For instance, exploring different markets as the Dutch insurance sector is experiencing a new wave of internationalization or exploring new technologies like IoT where you can monitor insured assets in real-time.
We are in the next digital revolution, with AI at a pivotal point like where the internet was 30 years ago. AI is no longer a ticket to win but a ticket to play. Despite this, adoption remains uneven, often hindered by leadership’s lack of comfort with new technology. For instance, in the insurance sector, over two thirds of CEOs view Generative AI (GenAI) as a threat and yet about 8 in 10 see it as a priority for investments. While digital transformation is a well-known topic, we are in a new paradox of opportunity versus hesitation. Another paradox insurers face is digital customer attention.
A new era of digital transformation: make it hyper-personal
Balancing the personal and digital is a persistent challenge for insurers. Digital efficiency is essential, but it often lacks the emotional connection customers seek. On the other hand, traditional "personal" service models can frustrate consumers who expect speed and convenience. Modern technology, including (Gen)AI, enables a shift to hyper-personalization, where tailored experiences meet customer expectations in real time. A hyper-personal approach differentiates insurers in a crowded marketplace. The success lies in moving beyond awareness to meaningful adoption, ensuring technology drives efficiency, accuracy and value across the business.
The roadblocks along the way to transformation
Several barriers hinder successful digital transformations in the insurance sector including complex implementation projects, siloed processes, low data availability, inflexible vendors, and insufficient collaboration or a lack of integration possibilities… just to name a few. One of the biggest hurdles is legacy software, a roadblock to innovation and integration. Legacy systems not only impede innovation but also demoralize teams; their inefficiency and complexity are often a cause for headaches.
More than half of CEOs in the insurance industry are worried about the talent gap, and rightfully so. With some systems from the 1990s(!) there is also an institutional knowledge drain as employees familiar with these systems are retiring. Finding replacements is easier said than done because new talent doesn’t want to work with these old systems. Addressing these barriers requires a holistic approach that integrates technology, people and processes.
Digital transformation may sound like an old hat, but the technological territory is new. The challenges of legacy systems, talent gaps and fragmented processes may seem daunting, but the opportunities for innovation and growth are greater than ever. As technology evolves at an unprecedented pace, the insurance sector must go beyond incremental upgrades and embrace a fundamental shift in how it operates.
This is not just about keeping up with disruptive insurtechs or addressing evolving customer demands for better service—it's about reimagining the future of insurance to remain competitive and relevant. And although this complex puzzle requires a lot of time to solve, we know one thing for sure: Innovation today moves at an incredibly fast pace, but it will never move this slow again, either. By aligning strategic vision with cutting-edge technology and organizational change, insurers can navigate this new era with confidence.
Want to make your digital transformation land? Get in touch
Stephan de Jong
Managing Director Technology
+31625058135