Part 3 – Code to Customer Series: The Insurance Industry and Our Role

In my first blog, I introduced our C2C philosophy, and in the second blog I described a real case study taken from a software development industry forum and how applying the C2C philosophy solved some issues.

In this, my third and last blog in the series, I’ll cover the steps insurance companies need to address to become the disruptors rather than the disrupted.

Despite a large focus on digitisation in the insurance industry, pockets within our sector still grapple with manual intensive processes, paper overload and its associated inefficiencies.

Where’s the rub?

As I see it, below are some of the key reasons:

• Non-holistic view: Many modernisation strategies usually revolve around digitising processes within certain boundaries that don’t take a holistic, end-to-end view of the processes where the initial trigger could be a consumer or a partner. While processes are sufficiently automated internally, the inputs remain manually driven. As an example, a health insurer will have systems to process claims but will not provide the option for customers or intermediaries to submit claims and invoices electronically.
• Cost: The incremental costs of modernising systems and practices sometimes exceeds the immediate benefits. With persistent soft market conditions and the pressure to reduce costs, modernisation projects often take a back seat. However, failure to address the opportunity presented by, for example, new data driven technologies like IoT will lead to some carriers being marginalised, whilst others with more forward-looking strategies will lead the way.
• Business Process Management (BPM) Technology: BPM technology was not sufficiently mature at the time of the development and implementation of insurance core business systems. These systems were good enough to handle core business functions, but did not have workflow functions such as triaging, assigning, approving or tracking work that insurance businesses typically associate with a BPM system. Many BPM systems were often added as a bolt-on to the core systems, which meant processing teams ended up using two sets of systems – one for core insurance business work and the other for workflows leading to redundancies.

Don’t get Ubered, be Uber

Entering the modern lexicon as a verb, being “Ubered” means being blindsided by a marketplace disruptor. Although the complexities and stringent regulation surrounding the P&C insurance market make it hard for start-up hopefuls to enter, the market should not be complacent. We have seen various InsurTech start-ups successfully establish themselves in the consumer insurance market, why not in P&C market?

How to avoid becoming disrupted? Below are some areas that need to be addressed.

• Birds-eye view: The entire insurance process should be examined from end-to-end. If the triggers for a business process are external, it may sometimes be prudent to provide technology solutions to the external participants. This will enable them to submit structured information into a customer’s processes electronically and will save a huge amount of effort on their part that would have been spent if the same information was submitted in an unstructured fashion.
• It’s not just about you: To encourage external participants to deal with insurance business on an electronic basis, systems should be as user-friendly and convenient as possible. Commercial P&C carriers remain focused on broadening their channels to market and often this involves third party access to their systems whether through a broker enabled portal or access for coverholders and other delegated authority entities. If it is about the interaction between two businesses, it is important that adequate efforts are spent on B2B integration, which will save time and money on both sides and help both businesses give better services to their customers.
• Look further afield: Insurance companies would benefit by widening their digital focus outside the boundaries of their own business to achieve long term benefits. By this, I mean looking at how their digital vision encompasses their customers. Where it is not possible to push their technology solutions to external participants, insurers should insist on good quality documents as inputs and then invest in Optical Character Recognition and data extraction technologies. This also applies to accelerating internal adoption. Mobile Business Process Outsourcing (BPO), allows employees to work from home or on the move, it also opens up employment opportunities to people who can’t travel to an office or who require flexible working hours to work from home.

• Process Analytics: There will always be nay-sayers who claim that manual processes are as efficient as electronic processes as they have been optimised. Process Analytics needs to be a key part of a process automation strategy. This will ensure the performance of various links in a business process chain is carefully monitored. It will also identify and remove any bottlenecks, with comparisons available with non-digitised process performance. Based on historical work patterns, predictive analytics is being successfully deployed for volumes forecasting and manpower planning.
• Robotics: Legacy systems should not be treated as untouchable. The full benefits of digitising processes will not be realised if the downstream systems are left off the modernisation agenda. A common mistake is to deploy automation solutions to ease the work of processing instead of trying to achieve total automation and enabling employees with processing tasks to focus on more high-level projects. Software Robotics and Robotic Process Automation should be explored for those standard repeatable processes.
• The right partner: If insurance businesses keep spending on IT for every process change, the costs of digitisation will become unsustainable and offset any savings achieved. It is critical to insist that Business Rules Management and Process Modelling are BAU functions and not new IT projects. When investing in digital transformation projects, it is important that insurers choose an IT partner who shares the same values and standards to support their business goals.
• Collaboration: Building a digital mindset among employees is fundamental. Having a modern communication approach that fosters virtual working practices, quick access to information on collaboration platforms, instant communication and personalised skills development programmes using behavioural analytics are now expected in organisations across all industries.

Our Digital Market place concept can guide insurance customers on their digital journey and address the challenges listed above. Analysing and anticipating customer behaviour and constantly adapting business strategy is now possible with the maturing of social and data analytics technologies, which we have at AdvantageGo.

Technology has found its way into majority of the world’s population and its adoption is increasing every minute. Economic access to communication technologies will further build a digital mindset among consumers – forcing businesses to plan and have a digital strategy that helps them quickly adapt to every new possibility. Easier said than done – and along with the insurance industry, all of us are also learning.