Digital transformation - The key to catapulting insurance companies to the top
We are currently living in an era where digital transformation acts as a key driving force for organisations across industries leading them to become more efficient, seamless, sustainable, and effective. The digital revolution is fostering resilient growth and “insurance” as an industry is no exception. Customers have occupied the centre stage in the market; hence it is critical for insurance companies to design an ideal customer experience. To do so, insurers should be agile and keen to establish harmony between industry trends and emerging opportunities.
To reap the benefits of technology-driven transformation, insurers must exploit the transformational benefits across the value chain, “leaving no stone unturned” to achieve a position in the top 25% of the insurance industry. There are opportunities within different aspects of all related processes that can be exploited, and we will explore a few of these aspects in more detail.
Product development and marketing
Technology can be used to address challenges related to accurate assessment and pricing, understanding the customer, and market needs. Appropriate deployment of analytics, statistical tools, and use of AI (Artificial Intelligence) powered tools will improve market research/analysis, product development and testing, the actuarial process, product launches, campaign management and portfolio marketing. Significant efficiencies can be achieved by introducing simpler processing and developing a self-service mechanism for customers to reduce the burden on back-office operations.
Technology can be used to address challenges related to accurate assessment and pricing, understanding the customer, and market needs.
Amongst thriving competition, achieving sales figures that generate revenue is necessary to ensure continued existence in the market. The use of Interactive Voice Recognition Systems (IVRS), volume and effort forecasting models, conversational chatbots and visualisation tools contribute to improving customer service and reducing churn rate. Additional benefits include better customer tracking, and volume anticipation across processes like market development, distribution, product branding, direct sales, broker relationships, commissions, and embedded products, all of which will help organisations in achieving targeted revenues.
Large Property and Casualty (P&C) insurers suffer opportunity loss, poor quote ratio, poor bind ratio, underwriter fatigue and lack of insights usually due to the time taken by underwriters to arrive at subjective judgements. The use of digital workflow tools, descriptive and prescriptive analytical models to reimagine the existing processes, streamlined submission processes, and process diagnostic controls enables companies to effectively manage the business, engage with the brokers, improve the quality of submissions, and bring transparency into the system. One should explore solutions that effectively analyse structured and unstructured text to extract pertinent information from submissions based on the likelihood of binding, loss ratio, profitability score, and the possibility of winning, and then filter and rank the submissions.
The need to modernise legacy Policy Administration Systems (PAS) is becoming more important as product variation expands. Unstructured requests, multiple requests or follow-ups, validation, processing, and fulfilment using manual processes, a considerable number of Not in Good Order (NIGO) requests and the need to contact multiple touch points within the underlying systems, establish the need to transform the policy issuance system to be more agile and resilient. The use of descriptive/predictive analytics to understand business metrics, business performance, renewal, and retention will greatly impact speed to market.
In today's competitive landscape, it is imperative for insurance service providers to collaborate with their technology solution partners to deploy state-of-the-art digital tools across their value chain.
For an insurance service provider, claims as a function serve to be the moment of truth for the customer. Today’s competitive landscape demands designing a customer-centric claims process that emphasises the value-design approach. Customers' perception and their claims journey decide their continuity with the company. Issues with receiving a high number of NIGO requests, missed subrogation opportunities, manual claim adjudication processes and multiple handoffs and approvals can be resolved by leveraging descriptive/prescriptive forecasting analytical models for claims and fraud detection, utilisation of resources self-servicing portals for first notification of loss /damage evaluation, chatbot and VR (Virtual Reality) for servicing status requests. Automation can reduce the cost of the claims journey by as much as 30%.
In today's competitive landscape, it is imperative for insurance service providers to collaborate with their technology solution partners to deploy state-of-the-art digital tools across their value chain. Leveraging the right technology should lead to tangible, positive outcomes. By embracing digital transformation, insurance companies can create a competitive advantage and stay relevant by addressing the evolving needs of their customers.
This article was first published on Silicon India