--Innovation goals cannot be achieved with traditional, repetitive, paper-based processes. Insurers need to take five technology-based steps to accelerate innovation.
Insurers, globally, are on the proverbial edge of disruption as they are constantly facing challenges due to changing customer needs, increased customers' expectations, heightened competition from insurtech firms and increasing regulatory requirements. Now, customers want to be onboarded not in days but in minutes. They are no longer willing to wait for weeks and months to settle claims. The pressure on insurance carriers and adjustors is mounting to accelerate product innovation. Maintaining the status quo is not going to work.
They need to launch innovative products faster, transform the underwriting process, improve policy administration, speed claims processing and enhance risk compliance. These business goals cannot be achieved with traditional, repetitive, paper-based processes.
Considering the well-known inertia of insurance companies and propensity to be slow about technology adoption, how can they fast-track innovation in the top gear and speed up go-to-market strategies?
1. Accelerate time to market by partnering with technology services providers
Most insurance carriers don't have enough tech capability, but they can forge partnerships to capitalize on other firms' expertise in new-age technologies to expedite product innovation. For instance, such collaborations can be established with insurtech service providers to create fit-for-purpose customized solutions based on unique business requirements.
2. Adopt Advanced Products to Automate Processes
Insurers can take advantage of advanced technology platforms to develop fit-for-purpose products and bring them to market quickly.
With advanced policy management systems, insurers can automate time-consuming tasks such as underwriting and issuance. Brokers can develop feature-rich software for end-to-end policy management, client services, underwriting, claims processing and more. A customizable self-service portal can be developed to let brokers, intermediaries and agents automate receiving customer requests, creating quotes, guiding prospects/customers and selling policies.
See also: From Vision to Product (Part 1)
3. Leverage Platform Development Accelerators
Platform accelerators can fast-track innovation by enabling insurers to leverage pre-built functionalities, integrations and modernization capabilities. These accelerators also can provide consulting on products, on platform development and enhancement, on integration with other enterprise and third-party applications and on comprehensive implementation and support.
4. Take Advantage of New-Age Tech Services
An adjustor client of ours used optical character recognition (OCR), machine learning (ML) and technologies such as Pytorch and Fast AI to correct a problem with bad data they were getting from surveyors and to quickly generate accurate reports on property damage. The company is now settling claims faster and generally providing better service.
Other tech services to take advantage of include:
Migrating to the cloud offers a significant advantage over traditional environments in terms of the speed with which new capabilities, business features and products can be developed, tested and launched. Using application programming interfaces (APIs), insurers can quickly connect their systems with third-party providers, enabling them to access new functionality and data. Insurers can also easily host insurance platforms, facilitating the deployment of cloud-native applications.
Low-code development services can allow insurers to rapidly build, test and deploy new products in underwriting, claims management and claims processing and policy management systems. Even small insurance companies can innovate faster with low code.
Robotic Process Automation (RPA)
RPA can automate repetitive and rule-based tasks, such as data entry, validation and policy administration, minimizing manual errors and freeing employees to focus on essential tasks. RPA also improves process efficiency and accuracy, leading to faster product development and a more streamlined customer experience.
5. Adopt Digital Modernization
In the traditional insurance model, launching a product is very difficult. Insurers have to invest significant time and resources into designing the policy, as evaluating underwriting risks and deciding premiums may take considerable time. However, if the insurer has migrated to the cloud, they can leverage the power of data analytics and machine learning and automate the entire underwriting and pricing aspect. As a result, an insurer can cater to fast-changing consumer needs.
Factors such as regulation and product complexity have made insurers slow to innovate. However, technological advancements have reduced the barriers to entry, so insurers must step up their game on product innovation to retain their competitive edge and grow business.