How are insurers in the Nordics digitally transforming?

It is often noted that customer expectations for a seamless digital experience are continuing to grow and grow. Responding to this demand for better, faster, and more integrated, digital customer platforms is something that we help our customers with every day; especially as other, supposedly more ‘digitally enabled’ competitors, like Amazon, enter the market. The question of how to respond is an interesting one, especially if you live in a region where digitalisation is engrained at a societal level.

The Nordic region is an acknowledged global leader when it comes to digitalisation. In the European Union’s latest Digital Economy and Society Index, Nordic countries came out as the leaders once again, as they have done regularly since the report was first published in 2014. So much of our lives and economies are digital in a way that cannot be said for other countries in Europe or, indeed, further afield.

This has meant that local insurers have had to adapt to challenges around digital communications and the effective mobilisation of data long before others have. To achieve this, insurers in the market have recognised a need for more flexible systems that will allow them to quickly adapt to customer expectations and launch new products.

Partner of choice
One of the things that helps to support this is having an equally flexible delivery model. Insurers in the market want to be able to choose how the delivery of their technology is managed, avoiding being tied to predetermined relationships with systems integrators or vendors that do not work for their business. Supported by a more flexible delivery model, insurers working with Guidewire in the Nordics have been able to choose their preferred strategy in their digital transformation journey, helping to give them the confidence to transform their businesses and make them suitable to serve today’s insurance customer.

Know your customer
Undertaking major change is a large and complex exercise, but the benefits of doing so are significant. For example, a major Tier 1 insurer in Denmark has leveraged their digital transformation to create a holistic view of each of their customers and their unique needs and risk profiles. Utilising this digital framework, the insurer has enabled their sales staff to better serve and engage with their customers, helping to improve measurably the levels of customer service satisfaction.

Automate to accumulate
Deriving benefit from automation is also a key requirement for insurers in the Nordics. Given the level of digitalisation across society in the region, there are large amounts of high-quality data to leverage, but this does not mean everyone has been successful in creating value from it. One insurer that has been successful is Tryg, which has created a strategy based on increasing automation across its business to improve customer satisfaction. Having made innovation a priority for the entire organisation, Tryg has partnered with Guidewire to transform its business, with an ambition to have eight out of ten claims submitted digitally and a desire for four of these to be managed through no touch settlement. Through the development of a new claims system with Guidewire, Tryg has reduced the average time it takes to settle a claim by 26 percent* and has decreased its claims leakage by 58 percent*. In addition, Tryg has also achieved the important goal of improving customer satisfaction and ensuring that customers are happy.

Improving the employee experience
Clearly, the insurer’s employees must not be forgotten. People want to be using the best technology that makes their lives easier, and so employee satisfaction and retention is not going to be helped by working with outdated systems. This has been recognised by insurers across the region, as they contend with the same hiring and talent pressures that other companies in Europe, and around the world, are facing. This is particularly true of one of the largest insurers in Finland, Pohjola, who now view having innovative technology systems as a crucial element in their hiring and retention policy.

The level of digitalisation across the Nordic region might be high, but that raises the bar for insurers to meet the digital expectations of their customers. Through our partnerships across the region, we see the industry rising to meet this challenge and doing so successfully. As new players enter the insurance market and it becomes even more competitive, there are learnings both for insurers locally and further afield on how to transform their businesses digitally in a way that delivers true value for customers.

* Capital Market Day, 16 November 2021 (material, page 27): Tryg A/S – Grow a balanced core business, while shaping the future