There's no doubt that technology is transforming industries around the globe. For insurers, this adoption has involved blending multiple legacy systems and providing staff training while developing products and procedures that meet policyholder needs and expectations. It is a complex process that involves identifying risks, access to adequate technology, significant investments and making informed decisions.

Mapping the insurance ecosystem

Digitalization is traversing the invisible walls across different domains, giving way to inter-industry competition on every front. Online retailing has set high standards for customer experience in every industry. Keeping this in mind, insurers are compelled to think radically about the way they assess risks, innovate products, handle claims, and, most importantly, manage customer expectations. This challenge is further complicated by geopolitical, environmental, regulatory and other constraints on the insurance industry.

Changing roles of service providers

Such a dynamic and ever-changing insurance landscape demands service provider transformation. The traditional third-party model (TPA), in many ways has become marginalized. While it has made the transition from "lift and shift" to a "lift and uplift" model, improving the value proposition, it never could materialize fully into a solid benefit. Despite relying on service providers to oversee portions of their business, insurers continue to be pulled into managing and coordinating between multiple providers, investing time, which could have been used for product ideation and risk decision making.

Transforming global business services to digital business services

The shared services model, known as global business services (GBS), has been experimenting and evolving to transform the businesses and come closer to tackling such issues. One of the studies on GBS by Hackett Group shows that over time, the focus on sheer process standardization, economies of scale and labor arbitrage has expanded to create value for the customer and the company through integration and redesign of the end-to-end process chain.