By Meg McCormack, Paul Roderick CPCU ARM, Michael DeRoche, CPCU, and Kerry Macca
Across the insurance ecosystem, digital transformation is reshaping how we operate, communicate, and serve. Legacy systems are being modernized, data drives strategy, and automation streamlines workflows. But new tools, acronyms, and technologies alone don’t guarantee impact. Despite the intense focus on digital transformation in 2025, operational knowledge of digital tools and their underlying technologies often remains siloed within IT. This leaves business units and leadership teams without the confidence or context to engage effectively with them. Conversely, understanding customer behavior, needs, and experience is often limited to business teams, making it difficult for IT to implement solutions that align with the organization’s mission.
Bridging these gaps starts with a shared understanding of how digital tools work and whom they’re built to serve. That means knowing your customers, their needs, and how every single team member contributes to meeting them. It also means building confidence with the systems and data that support daily work. When teams know how to apply these tools and use the data they generate, organizations make better decisions, collaborate more effectively, and drive real change. Organizations that develop both technical and customer awareness across teams are better positioned to deliver results and sustain innovation.
In the insurance industry, digital fluency must extend beyond the IT department to drive meaningful innovation and transformation. Innovation doesn’t just originate from tech teams; in fact, some of the most impactful ideas come from tactical teams running day-to-day operations. Product managers, underwriters, adjusters, and brokers best understand customer needs and can leverage digital tools more effectively than anyone to meet them.
When non-technical teams are digitally fluent, they can interpret customer data and behavioral trends with greater empathy and turn insights into impactful products with greater confidence. This critical fluency also breaks down organizational silos, enabling smoother collaboration with technical teams and reducing the costly miscommunications that derail the majority of digital initiatives. For example, Liberty Mutual empowered its marketing and product teams with data analytics tools and the skills to operate them, resulting in more personalized offerings and improved customer engagement. At Arch, functional teams continuously collaborate with IT to better understand MGA and TPA data, developing new methods to export from these external sources to meet reporting requirements for both internal and external consumers of analytical and reporting data.
With nearly 70% of digital transformations failing due to poor cross-functional alignment and lack of shared understanding, empowering every department with digital literacy is essential for building a truly customer-centric, agile insurance organization.(1)
The Role of Leadership
Every successful initiative begins with culture – and digital fluency efforts are no different. Organizations that understand the value of comprehensive digital literacy and want to ensure its enterprise-wide prevalence should focus on those who set the culture: management and leadership roles. We favor this approach for several reasons:
Leadership must gain experience and insights from the tools employees are expected to adopt daily.
As budget controllers, leadership can most efficiently ensure the organization has the right tools or acquire them if necessary. This is especially helpful during later transformation stages when power users request new features or add-ons.
If leadership has learned the tools, they can almost instantly empathize and begin collaborative dialogue with their teams.
Digitally literate leadership can hold teams accountable and fulfill the critical change management principle of leading by example.
It is difficult for leaders to drive accountability in areas where they lack confidence or understanding.
After establishing a baseline of digital literacy “in the control room,” leaders can assess maturity across the broader organization. Employees demonstrating strong digital literacy and communication skills should conduct surveys, observe workflows, and hold conversational-style interviews. Next, role-based learning tracks should be identified and developed, starting with roles that have fewer diverse tasks to keep the process manageable. Early on, align expectations with incentives by clearly defining digital literacy in job descriptions, embedding it in employee goals, and factoring it into performance-based awards. Well-defined pilot training initiatives can build quick wins, creating credibility and momentum.
Cross-functional projects that pair technical and non-technical talent accelerate learning and foster collaboration. Recognizing and rewarding digital innovation across departments underscores the value of diverse contributions. For example, a major U.S. auto insurer partnered with Insight to embed Agile and Scrum practices within its claims department.(2) Empowering non-technical staff with these methodologies resulted in substantial efficiency and accuracy gains.
Equally important is creating safe spaces where employees feel comfortable asking, “What does this data, tool, or most importantly, change mean for my role?” This curiosity helps make digital transformation a shared journey. By measuring progress and celebrating small wins, insurers foster digital literacy as a mindset rather than a skill set.
Digital literacy isn’t something you study once and finish. It’s an infinite journey that relies on alignment, curiosity, and most importantly, culture. By starting with leadership and building from there, you’ll see that digital literacy is less about technology itself and entirely about empowering people to best serve those who depend on us most. How is your organization empowering every team member to thrive in a digital-first world?
1 McKinsey & Company. (2023). Perspectives on transformation. Retrieved from https://www.mckinsey.com/capabilities/transformation/our-insights/perspectives-on-transformation
2 Stewart, T. (2024, March 21). The Need for 'Digital Fluency' in Insurance. Insurance Thought Leadership. Retrieved from https://www.insurancethoughtleadership.com/going-digital/need-digital-fluency-insurance
This article was originally published to the Rise Professionals Blog: https://community.riseprofessionals.com/c/blogs/customer-literacy-and-digital-fluency-why-it-must-go-beyond-it-f4929b3e-b509-4134-aa19-ec7ee48f2bdc