The Digital Journey in Personal Lines

Personal lines insurers are focusing on self-service capabilities for policyholders, especially for policy service and claims.

Most personal lines insurers were already pursuing digital transformation before the pandemic, but the tumultuous events of last year caused many to reprioritize digital projects and change the shape of their journeys.

Generally, the industry fared well despite the lockdowns, economic volatility and work-from-home imperative. As activity and behavior patterns shifted dramatically in many ways, the industry benefitted – so much so that large rebates were offered by many personal lines carriers. However, insurers also had to deal with the increasing severities in personal auto, an uncertain financial market and reduced demand in some areas due to layoffs and an economic downturn.

From a digital journey standpoint, it was not so much about pausing the effort to become a digital enterprise as it was about reprioritizing projects to address urgent needs revealed as a result of the pandemic.

A new SMA research report, Digital Transformation in Personal Lines: Project Priorities for 2021, identifies specific plans for carriers related to a variety of digital projects. A big theme is the focus on self-service capabilities for policyholders, especially for policy service and claims. While some insurers already had robust solutions in these areas for digital capture and workflows, most found that their capabilities needed upgrades to support remote, virtual operations.

At the same time, the evolution of core systems continued unabated. Modern core systems for policy, billing and claims are the foundation for digital transformation.

The move to simply digitize more assets and automate workflows also accelerated. Although the core, digitization and workflow projects may not, by themselves, drive transformation, they are enablers for a whole range of digital projects. More information must be in digital formats, and the systems of record that manage key transaction flows and data must be built on modern architectures that provide the flexibility and adaptability needed in the digital age.

See also: The Digital Journey in Commercial Lines

Although one would think that all the focus would be on customers, the reality is more complicated. There are certainly digital projects that focus on addressing the digital gaps related to customers, such as self-service portal projects. However, there is just as much or more activity focused on operationally driven transformation. In some ways, this is the typical response to a crisis – focus on operational efficiencies and position the company to weather difficult times. But, in other ways, this focus just reflects the opportunities to reduce complexities, decrease paper and manual handoffs and increase digital data to feed digital workflows and analytics.

SMA predicts that there will be an acceleration of the digital journey as 2021 progresses, continuing into 2022. As we move toward the post-pandemic world, there is an even greater appreciation for the power of digital transformation.


Mark Breading

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Mark Breading

Mark Breading is a partner at Strategy Meets Action, a Resource Pro company that helps insurers develop and validate their IT strategies and plans, better understand how their investments measure up in today's highly competitive environment and gain clarity on solution options and vendor selection.


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