Germania Insurance cuts workforce by 7%; latest insurance company to announce layoffs  October 24th 2023

Nationwide exec Michael Mahaffey talks about tech advances

In his keynote address at DIG IN 2022, Michael Mahaffey, executive vice president, chief strategy and corporate development officer at Nationwide, spoke about how the insurer had digitized significant parts of its operations before the pandemic.

Digital Insurance spoke to Mahaffey recently about Nationwide's ongoing digital transformation efforts since then, including how it keeps up with the increasing speed of technology development without losing its way or losing the momentum it had built in its previous modernization efforts. Part of Nationwide's strategy is seeing its mission as protection throughout all its lines of business.

How are Nationwide’s digital transformation efforts going and what benefits do you see?

In 2021, we were on the tail end of massive, concurrent systems modernization efforts across most of our core businesses. We're generally past that, although for one of our major lines of businesses, we've just started that, although it will be a smaller, faster effort than the ones we've done over the last decade.

We have a modernized digital core, from which we're doing a lot more shorter sprint, rapid-fire digital evolutions. On that basis, it's how do we enable customer-facing digital capabilities and how do we prioritize and digitize the right customer journeys to have the right impact. It's how we digitize our relationships with our distribution partners, not just the traditional independent agencies and financial advisors, but some of the non-traditional partners.

For many years, we have embedded native digital relationships in other people's ecosystems. Those are examples of where we have continued to accelerate over the last two to three years in ways that have distanced ourselves from some of our competitors, at scale that's different than a lot of the insurtech and fintech players.

But it's never fast enough. The pace of technology evolution necessitates that we constantly look for ways to do things faster.

Structural Insurance Transformation Needed: ‘Predict and Prevent’

As the Property & Casualty insurance industry struggles with the severe impact of extreme weather events, rapidly shifting market conditions, growing social and economic inflation and a rapidly transforming automotive and alternative transportation landscape, it has become obvious that fundamental structural change is necessary and inevitable.

A new paradigm of predict and prevent is gaining traction and may very well be the cure for the ailing insurance industry.

Alan Demers and Stephen Applebaum

Evolving from Contact Center to Experience Hub

Shifting to a customer hub can deliver competitive differentiation through better CX and through employee engagement and retention, as well as cost savings, better compliance, and revenue growth.

Customer service interactions are a pain point for customers and employees alike. The systems most insurers and other businesses have in place for customer interaction are fragmented and inefficient, which can turn away customers and wear down service representatives. 60 percent of customers say that when they contact a company they do business with, “it generally feels like they’re communicating with separate departments, not one company.”

At the same time, it’s getting harder to retain contact center employees, with average turnover rising from 35 percent in 2021 to 38 percent in 2022. The result is lost customers, lost revenue, and missed opportunities for growth.

Why are contact center experiences so challenging? Data flow is a major problem.

Lars Boeing is a Vice President in Capgemini Invent’s Insurance Practice and leads Capgemini’s global Future of Claims offering.

Bright Hung is a Director in Capgemini Invent’s Corporate Experience Practice and co-leads the Contact Center & Service Transformation offering.

How to Respond at Inflection Points

At inflection points, firms tend to congratulate themselves and keep doing the same things. Wrong answer. 

KEY TAKEAWAY:

Whether your actions caused the hockey stick growth or whether you just got lucky, you need a new strategy that takes into account the new reality while giving yourself the space to think about your identity and what activities need to be discontinued.

I’m fascinated by inflection points within organizations. These are periods of rapid growth or change such as technology startups go through if they manage to find product-market fit. When these companies pitch venture capitalists, they often have a chart showing “hockey stick growth,” which is another way of demonstrating an inflection point.

Ruben Ugarte helps insurance organizations, teams and individuals make exponentially superior decisions. He has done this across five continents, in three languages, and his ideas have helped hundreds of thousands of people.