Digital transformation in insurance: Digital ecosystem connectivity

Carriers should attempt to drive the following strategic outcomes from an ecosystem strategy, in alignment with the overall business strategy and priorities, by creating:

• A seamless customer experience via integrated strategic partner platforms
• A set of strategic partnerships with key technology platforms grounded in mutual value creation
• A robust platform and set of standard APIs underpinning ecosystem connectivity, in alignment with any planned future-state business and technology strategies
• Operational efficiencies achieved through simplified and digitized processes
• Ongoing opportunities for growth enabled by key capabilities that make doing business easier

Understanding how to create exceptional and frictionless experiences for brokers, employees, and employers will influence the process of reimagining the business and identifying the digital capabilities needed to excel in the marketplace, both today and in the future. The organizational agility resulting from implementing insurance ecosystem connectivity should improve time-to-market and allow the carrier to take advantage of new market opportunities. It may also potentially drive efficiencies at key steps in the process (e.g., seamless case installation and plan setup, automated enrollment and eligibility processing, claims tracking, and real-time communications).

Based on their strategy, organizational constraints, and business case, carriers must prioritize capabilities within the value chain that will help enable a digital ecosystem strategy that drives maximum value.

Carriers should review current capabilities, partnership offerings in the marketplace, and current internal in-flight initiatives to identify gaps and opportunities and prioritize key functionalities and use cases. If a carrier hasn’t already, it is important to start and put a stake in the ground to begin learning. Enabling real-time connectivity with the network for plan details and policy information, enrollment, or Medical Evidence of Insurability—all of these are a step in the right direction.

Prioritizing the right partners in the insurance ecosystem is important to maximize the value generated by ecosystem connectivity—considering the diversity of capabilities provided by various potential partners (e.g., benefits administrators, HRIS solutions, payroll processors, third-party enrollers).

Carriers should consider a few key factors when evaluating potential partnership opportunities:

• Value proposition: The alignment of the partner’s capabilities to the carrier’s desired capabilities, and the partner’s ability to create and sustain competitive advantage, including the scale to drive growth and market share, and willingness to invest in the relationship
• Technology maturity: The partner’s skills and flexibility to fit with the carrier’s current and planned architecture, the ability to develop integrations, and the alignment of strategic roadmaps for future technology capability enablement
• Win-win business case: The partner’s ability to enable the carrier’s business case with respect to both new and in-force blocks, and to drive enhanced experiences for all stakeholders
• Partnership decision-making and delivery: The carrier’s ability to influence how opportunities will be prioritized, decisions will be made, and the delivery of plans with the partner will be structured

A future-state connectivity ecosystem architecture should focus on driving greater agility through thoughtful integration capabilities. Key factors to consider include finding the right technical fit of proposed solutions and patterns, understanding efforts to date around API-enablement within existing architecture, and determining alignment to the future-state design.

Additional consideration should be given to emerging capabilities in the market with third-party solution providers working to enable connectivity with the insurance ecosystem. This will support future scale and speed-to-market objectives.

To enable this, carriers should:

• Define the platform and tiered API strategy and develop guidelines to aid in design of the target state
• Understand the ease of developing, replicating, or repurposing existing integrations and determining alignment to the current and future architecture
• Identify forward-looking complementary digital solutions to accompany and accelerate connectivity efforts

Carriers need to have a structured approach to plan and execute their strategic vision while accelerating value realization through their connectivity strategies. This will help overcome some of the structural, operational, and technology challenges (e.g., inability to support increased volumes due to inflexible core applications) that can impede enablement of a seamless, digital ecosystem. Carriers need to define the overall operations and technology strategy and roadmap that align with their connectivity strategy.

Instead of planning one-offs for each partner, a thorough execution plan should be established with dependencies, constraints, and accountabilities identified across various activities identified as part of an integrated strategic roadmap, technology architecture, and operating model redesign.

While developing a holistic connectivity ecosystem strategy, carriers should keep in mind that as market conditions and technology innovations continue to evolve, additional opportunities and challenges may emerge. These considerations should continue to inform the strategy and its execution:

• While the industry has yet to fully evolve and adopt data exchange standards (e.g., LIMRA/LDEx), carriers should continue to be involved in such efforts to influence the standards and their adoption
• Carriers should consider advanced AI capabilities to automate, streamline, and optimize data processing and analysis (e.g., Google’s DocAI) to reduce the need for complex integrations, as any inputs could be handled by an AI solution
• Given the significance of an execution effort to enable connectivity, there is a risk of losing momentum due to delays across phases

Defining and executing an ecosystem connectivity strategy is challenging and complex. It entails prioritization from multiple ecosystem partner options, making informed if imperfect decisions to get the ball rolling, and complicated legacy technology and process adaptations. At the core, it requires careful planning. With prioritized capabilities, thoughtful architecture integration design, and execution rigor, carriers can make the leap to building the connected insurance ecosystem of the future.