Somehow, despite a long career as a writer and editor, I never got around to reading Bill Bryson's masterful book, "The Mother Tongue: English and How It Got That Way," for, oh, more than 30 years. But I picked it up recently, and it fleshed out my understanding of and appreciation for English in all kinds of ways. 

While I knew, for instance, that England's rulers spoke a form of French after William the Conqueror crossed the English Channel from Normandy and dispatched King Harold at Hastings in 1066, I didn't realize that the rulers spoke a language different than the common people for more than three centuries, until almost 1400. With no rules about English being handed down from on high, the language developed in a sort of free-for-all of decisions about vocabulary, spelling, conjugation of verbs, etc. in pockets all over the country. Then, just 50 years or so later, in the mid-1400s, the printing press acquired movable type, publishing took off -- and there needed to be rules. 

In the crush to standardize on a language that could be printed and understood by masses of people, a haphazard approach to rules led to the mishmash of spellings and pronunciations that are tough enough for us native speakers but bedevil the many who learn English as a second or third language. As just one example: "ache" took its pronunciation from a region where it was spelled "ake" but kept the spelling from an area where the "ch" was pronounced as in Charlie.

Ruminating about the origins and development of English got me thinking about the language we use in insurance. While we talk a good game about being customer-centric, our language says otherwise. 

If we really want to put the customer at the center of everything we do, we have to start by giving up on two words: "adjuster" and "losses."

This isn't a new theme for me. I wrote this in 2015, this in 2019 and this in 2021. But the issue is so important that it's worth revisiting from time to time... until we get it right.

While there's plenty of room to complain, in general, about insurance jargon -- and I've done my share of griping -- the core of the language issue boils down to those two words, "adjuster" and "losses," because they send exactly the wrong signal to customers.

Sending an "adjuster" to process a claim tells the customer we don't trust them. Referring to payments to customers as "losses" tells them we're going to try to minimize those payments as much as possible, even though the promise of those payments is why customers hire us in the first place. 

As I wrote in 2019:

"If I'm filing a claim, I don't want it adjusted. I want it paid. Yes, I realize that processing claims is complicated and that all sorts of adjustments need to be made. I also realize that no industry simply pays when a claim is made against a company. But if you send me an 'adjuster,' you're telling me right off the bat that you don't trust me, and that's a lousy way to start an interaction. It certainly isn't any way to start a relationship, which is what insurers insist they want with customers these days. Don't trust me, if you must, but send me a 'claims professional' or simply a 'customer service representative.' Don't send me an 'adjuster.'"

The switch to a term like "customer agent" just doesn't seem that hard. Yes, the term "adjuster" has a long history, but we're still allowed to move past it, just as we've moved beyond the Middle English that prevailed in the 1400s.

To quote from my 2019 self again, this time about "losses":

"Almost as bad is 'losses,' as in 'cat losses' or 'medical losses.' How about, instead: 'payments to highly valued customers in their time of need, after years of premium payments on their part'? Does Amazon record a loss when it ships me something? Of course not. And those payments on health or cat insurance aren't losses, either; they're just the cost of doing business—people don't pay those premiums simply because they like us. So, let's look at our business through the customer's eyes and book 'payments' or somesuch, not 'losses.'"

And from 2021:

"When a bank or mutual fund sends me money I've earned, it's paying me interest or capital gains. Corporations pay me dividends. None of these firms talk about losses just because money has moved from them to me. So, why does the insurance industry refer to a payment on my behalf to a doctor as a 'medical loss'? Why is a payment to help me recover from property damage in a storm a 'catastrophe loss'?... Surely 'claims' or 'paid claims' could replace 'losses.'"

Changing the term "losses" will be tougher because it's used by accountants, who have their own rules and are loath to change. The term is also less of an affront to customers than "adjuster," because the industry mostly just talks about losses when it's talking to itself or to investors. Still, no justified payment to a client should be treated as a loss -- not if we're serious about looking out for the wellbeing of our customers. 

I realize that old habits die hard, but I'm going to keep trying -- and I hope you will, too. If we can change the way we talk about our interactions with customers, we'll be much more likely to improve the interactions themselves.

Cheers,

Paul

KEY TAKEAWAY:

--The 2023 aggregated combined ratio for personal auto insurance is expected to be 106%, but, done right, a telematics program can lower that combined ratio as much as seven percentage points on the entire auto insurance portfolio. Research shows: 

• three-point improvement at a portfolio level, achievable within months, via a structured behavioral change program;
• three-point improvement based on improved claims management and increased self-service;
• 0.5 to one-point improvement based on retention — telematics for auto insurance programs can help increase retention by about 20% compared with traditional portfolios.

----------

The U.S. personal auto insurance sector lost billions in 2022, but the right telematics auto insurance strategy can quickly bring a five-percentage-point improvement to your loss ratio.

Due to inflation, driver distraction and slow approval of rate changes, the 2023 aggregated combined ratio for personal auto insurance is expected to be 106%, according to AM Best’s David Blades. To rectify this sorry state, insurers must embrace every opportunity to address this disequilibrium in the personal auto segment, starting with telematics.

Telematics for auto insurance and UBI (usage-based insurance) are potentially industry-changing technologies. But the truth is their impact on profitability has been negligible. In 2022, the U.S. personal auto insurance sector lost billions of dollars and generated a historically bad 112% combined ratio.

While large personal auto insurers have adopted telematics-based programs, they’re only scratching the surface of the potential benefits. Total market penetration of telematics for auto insurance is a fraction of the risks insured.

While much has changed, there’s more that insurers can do to increase adoption. By converting current customers to telematics for auto insurance programs, insurers can carve a fast path to sub-100 combined ratios.

Telematics for Auto Insurance Fills the Current UBI Business Model Gaps

The research shows that most people like mobile-based insurance telematics. When presented with app-based telematics for auto insurance program that provide rewards for safe driving, emergency/crash assistance and other services beyond monitoring driving behavior, more than 50% of U.S. respondents in a recent Swiss Re and IoT Observatory survey (10,000 worldwide/2,000 U.S.-based) said they would recommend the program to a friend.

By many measures, insurance telematics is a success in the U.S. market. According to TransUnion’s “Insurance Trends and 2023 Outlook Report,” the number of people who opted into a telematics program for auto insurance now sits at 60% of those presented with an offer. Some insurers, such as Progressive and Allstate, have achieved UBI penetration rates of 40% to 50% in certain channels.

But even with the increase in adoption experienced by these large insurers, telematics for auto insurance is not pervasive in insurance books.

The IoT Insurance Observatory, an insurance think tank that has aggregated data from more than 120 insurers, reinsurers and tech players over its seven annual editions, estimated that about 9 million UBI insurance policies transmitted some telematics for auto insurance data to an insurer in the U.S. in 2021, which translates to total market penetration of about 5% for telematics. Given the amount of time that telematics has been in the market, this penetration rate is very low.

Telematics for Auto Insurance, Success and Switch-and-Save

The current telematics for auto insurance business model is one reason penetration has lagged. Insurers have mainly used UBI products, accompanied by the promise of steeply discounted premiums, to lure customers from competitors. This typically happens at renewal, when policyholders are inclined to compare quotes.

However, only a relatively small portion of people — slightly above 10% — switch carriers at renewal, even when confronted with an increase in premium. In fact, a recent survey by Swiss Re and the IoT Insurance Observatory found that almost half of U.S. policyholder respondents said they’ve been with the same insurer for more than five years.

See also: Video Telematics Transforms Road Safety

A New Telematics Business Model: Value-Added Services for Current Policyholders

Given that inertia, insurers should begin offering telematics to current policyholders, wherever they are in the policy lifecycle.

European insurers, including Fidelidade in Portugal and Generali in Germany, have already successfully introduced mobile-based telematics for auto insurance programs focused on services — that have no impact on insurance premiums — and are offered to everyone in their auto portfolios.

Ohio-based Progressive is following the same path. In a February 2023 earnings call, Progressive sent a clear message to the U.S. insurance industry that it would do the same.

“Over the last couple of years, we’ve experimented with offering a service to detect and respond to major accidents to some of our Snapshot customers to learn if they value the service and to better understand how it could be useful in handling claims,” said Tricia Griffith, Progressive’s chief executive officer.

“[T]here’s a large segment of customers who don’t want their insurance premium to be based on their driving data. That means that if we limit this just to our Snapshot customers, we’d be leaving out a lot of others. So, in March, we plan to start making accident response available to all of our auto customers, not just those who are in Snapshot,” Griffith said.

All Progressive’s policyholders have the telematics for auto insurance services constantly available within the app, regardless of the auto insurance product chosen.

To better understand which services would offer the most value to drivers, the IoT Insurance Observatory and Swiss Re asked survey respondents to pick the services they’d like to include in the app. The three things that U.S. customers want most are rewards, automatic emergency assistance in the event of a crash and anti-theft support. Driver conveniences, such as weather information, car location finder, car maintenance reminders and claims support are also of interest.

Providing these services to all of the customers in the current portfolio is a clear and addressable opportunity. There even examples of tech players, such as Bouncie in the U.S., that are scaling based on telematics for auto insurance services sold to drivers. Insurers such as Discovery Insure sell participation in its UBI program – which includes rewards like vouchers and other perks for safe driving – for the equivalent of $5 a month.

The Urgent Need to Expand Telematics for Auto Insurance Uptake

There is much evidence that frequent, tangible and inexpensive rewards can improve driving behaviors, help drivers avoid accidents and reduce loss ratios. Within the first 30 days of joining Vitality Drive, an incentives-based driver-behavior program from South Africa’s Discovery Insurance, drivers have a 15% improvement in driving behavior on average, according to company research.

Some insurers outside the U.S. have also used telematics for auto insurance data in their processes and achieved benefits such as reduced average claim costs and litigation, increased fraud detection, faster claims processing and improved customer satisfaction.

Moreover, insurers with hundreds of thousands of mobile-based telematics for auto insurance policyholders experienced an increase in customer retention and a decrease in cost for customer service due to an increase in self-service within the app.

Research by the IoT Insurance Observatory, which has covered more than 80% of the telematics in auto insurance policies worldwide for the past six years, shows that well-executed mobile-based telematics for auto insurance programs have a large and positive impact on combined ratios, and estimated the following as achievable impacts on a U.S. auto insurance portfolio:

• three-point improvement at a portfolio level, achievable within months, via a structured behavioral change program;
• three-point improvement based on improved claims management and increased self-service;
• 0.5 to one-point improvement based on retention — telematics for auto insurance programs can help increase retention by about 20% compared with traditional portfolios

This means that the potential benefit to insurers is as much as a seven-percentage-point reduction on the combined ratio of the entire auto portfolio.

See also: Insurtech Startups Are Doing It Again!

Making the New Business Case Work

Two main challenges that insurers face when expanding their telematics for auto insurance program are cost effectiveness and the IT architecture needed to support continuous monitoring of all their portfolios.

Cost Effectiveness

The benefits described above require a set of digital tools and a structured behavioral change program with rewards. The cost of this new approach includes the telematics for auto insurance software development kit (SDK) inside the insurer’s app for constant monitoring and the IT architecture to manage the data and the reward mechanism – estimated by the IoT Insurance Observatory to be about two percentage points on the insurance premiums.

Adding the telematics for auto insurance SDK into the app of all the policyholders – whichever auto insurance contract they signed – is the best way to quickly unlock the telematics benefits at the portfolio level, which will significantly improve the insurer’s bottom line.

An insurer with millions of policyholders and a strong brand can reach relevant efficiencies and help lower this cost by cutting good deals with retailers for their reward system.

IT Architecture

The goal of telematics for auto insurance architecture is to build real-time/near-real-time data ingestion and data processing pipelines to process data from IoT devices into the big data analytics platform for the insurers.

The architecture provides a well-defined data flow process, optimized storage and processing components and consumption workloads for telematics for auto insurance data. This architecture does not aim to ingest data into the core insurance platforms. Rather, it integrates auto insurance data with data from core insurance platforms in a “model and store” data storage for analysis and consumption.

The diagram below depicts the data flow and components that drive the architecture for telematics for auto insurance. The goals of this architecture include:

1. Supporting and collecting high-throughput, real-time streaming data from telematics for auto insurance service providers
2. The ability to capture data from millions of devices and vehicles on a real-time/near-real-time basis for the entire life of the insurance coverage
3. Capabilities to perform analytics on the telematics for auto insurance data to make inferences on driver behavior, promote driver safety, provide incentives, encourage customer retention, etc.
4. Provide comprehensive and scalable system-to-system integration capabilities for the telematics for auto insurance data and downstream enterprise applications.

This cloud-based, scalable and robust architecture enables data-driven insights based on telematics for auto insurance data provided by insured vehicles. This architecture strives to support applications that enable business use cases for telematics for auto insurance while providing insights into drivers, vehicles and critical incident response. This will be a foundation for developing insurers’ intellectual property about auto risks in the future.

The key components of the architecture include:

• Vehicle: The vehicle generates and transmits telematics for auto insurance data on a real-time basis, which is stored and managed in a telematics server for real-time data access. The telematics for the auto insurance provider enables transmission of data from their servers to the cloud/MFT infrastructure of the insurer for data processing.
• Data Collection and Ingestion: Telematics for auto insurance data is collected and ingested on a real-time basis using cloud-native services and stored as raw files in the cloud. This enables the collection and staging of raw transactional data for pre-processing. Data access to the raw layer will be enabled in this region.
• Processing and Transformation: Telematics for auto insurance data is enriched, de-duplicated and processed, and key data attributes are selected for transformation to enable modeling and storage of data. This stage enables the right attributes to be selected for use cases to be implemented.
• Modeling and Storing: This critical step ensures that the telematics for auto insurance data is integrated with other critical insurance data elements. These now can include data from core insurance systems for policy, claims and billing, etc., as well as data from external partners, such as MGAs and TPAs, and third-party data, such as geospatial and demographics. The goal is to provide a comprehensive view of data attributes across multiple domains and enable seamless data consumption for visualization, data analytics, system-to-system integration and enterprise applications.
• Analysis and Consumption: This step provides the consumption workloads, which are based on business use cases for telematics for auto insurance. If an insurer offers UBI, this layer handles consumption patterns for enterprise applications. It analyzes correlations with expected claims to define risk models and informs actions on the UBI portfolio. This ensures the applications get the right and accurate telematics for auto insurance data for unlocking the different use cases along the insurance functions.

See also: 4 Ways Telematics Is Improving Car Safety

The current architecture differs from previous telematics architectural patterns significantly, as the use cases for telematics for auto insurance are continuously evolving to meet various business needs. In addition to classic use cases such as UBI and understanding driver behavior, insurers are continuously providing additional services to customers, such as rewards for safe driving behavior, accident response, claims handling, maintenance alerts and mechanical failure diagnostics as part of their telematics for auto insurance offerings. Hence, the data infrastructure needs to be significantly scaled up to meet these needs.

ValueMomentum is seeing customers increase their telematics investments by 30% to 50% to consume, process, store and analyze telematics for auto insurance data. This evolution fully exploits IoT’s potential for the auto insurance business: to continuously sense, understand, learn and act in near-real time. This is a one-time investment to build tech capabilities, and insurers then move into Run-the-Business (RTB) mode after they are implemented.

This architecture helps insurers with two critical business goals:

1. As telematics vendors move toward providing real-time streaming data, insurers need this architecture to consume and process the real-time data and to extract valuable insights for the different insurance functions. In addition, this architecture helps insurers scale. For instance, if an insurer wants to expand telematics to its personal and commercial lines portfolio, implementing a cloud-based scalable infrastructure is critical to a successful expansion.
2. Providing flexibility on how long the telematics data is stored for a customer. The customer’s preference is to have all telematics data erased when they exit the program. Having a modeled storage layer makes it reliable and easy to identify and remove the raw customer data as per business needs, without missing the intellectual property developed (e.g., risk models).

Expanding Telematics Is Urgent to the Current State of U.S. Personal Auto Insurance

Even after accounting for the cost of setting up the new telematics for auto insurance model, there’s still five percentage points of combined ratio benefit to insurers, representing an extremely precious U-turn opportunity.

Given that insurers obtained on average 1.8% profits over the past 10 years in the U.S. — according to the January 2023 “Report on Profitability by Line by State in 2021,” by the National Association of Insurance Commissioners — offering telematics for auto insurance to policyholders in this new, value-added model can increase profitability by driving down combined ratios.

Even a carrier at the early stages of its digital journey, let’s say with a take-up of their auto app on only one-third of the portfolio, will find the potential profits significant. Moreover, this would be obtained without asking a penny more from the policyholders, providing instead the services customers are asking for.

The technology for telematics in auto insurance is mature, and drivers clearly see benefits in additional services. Insurers with the vision, the will and the skills to act and bring change to telematics for auto insurance in insurance will reap the benefits that come with an expanded market.

Property reinsurance rates are at their highest in 17 years. Factors such as shifting weather patterns, record losses and economic uncertainty have damaged reinsurer confidence, leading to steep mid-year rate increases. To unlock future growth and earn reinsurer trust, insurers must: leverage innovative technology to manage evolving risks and adopt a philosophy of radical transparency. Those that don’t will be left behind.

Innovation: An Urgent Opportunity

Reinsurers want to have full confidence in the risks they underwrite. However, with increased losses and rising replacement costs, they have no choice but to be more selective. To bolster confidence, primary carriers must prove their ability to adapt amid a challenging risk climate. The first step? Master new technologies quickly.

The rapid advancement of technology, such as recent developments in generative artificial intelligence (AI), is transforming every industry, including insurance. A 2022 report from Accenture found that 65% of claims executives plan to spend more than $10 million on AI, and 80% believe these technologies offer value. Munich Re’s Patrick Greene says in a recent Reinsurance News article that reinsurers hold this view. Greene emphasized the importance for insurers to integrate AI immediately for efficient claims and underwriting processes. He also stressed that these technologies will soon not be optional for carriers – at least, not if they want to obtain reinsurance. 

Still, insurance tends to trail other industries in embracing new technology. While the cost of many AI solutions has decreased and the number of insurers reporting financial benefits from AI has increased from 10% to 20%, the same Accenture report found that fewer than half of those polled said their organization was advanced in automation.

Amid this technological shift, insurers can distinguish themselves from their more conservative competitors. By enthusiastically adopting AI, machine learning (ML) and computer vision (CV), carriers can prove to reinsurers they are forward-thinking and adaptable. Many insurers are already doing exactly this to:

• Accelerate claims: For instance, Allstate uses a conversational AI bot, Amelia, to speed up claims. As of last year, Amelia was handling 250,000 conversations each month and was used by 75% of Allstate call-center employees.
• Optimize inspections: Virtual inspection tools from companies such as JMI Reports and Plnar enable insurers to massively reduce total inspection budgets and the time it takes to perform an inspection.
• Automate underwriting: AI-powered platforms can automate underwriting, rapidly identify property condition and provide straight-through processing for low-risk policies. Munich Re’s Lee Sarkin said in an interview that these systems enhance underwriter efficiency without replacing them.

These examples highlight how AI can boost efficiency and reduce expenses, which is crucial for carriers partnering with reinsurers. But perhaps even more compelling is the predictive power of AI – its ability to anticipate and even avoid future claims.

See also: 5 Ways Generative AI Will Transform Claims

The Predictive Power of AI

Catastrophic and severe weather events, coupled with a 50% increase in catastrophe rates at July renewals, underline the urgency for reinsurers to address increased losses. The problem isn’t just natural disasters, either. Secondary perils like convective storms have also become a significant loss driver, accounting for 68% of all catastrophic loss dollars in the first half of 2023, Swiss Re reported. In response, some major carriers have stopped writing business in high-risk states such as California and Florida. This is not a long-term solution, though, and certainly does not endear these companies to their policyholders. 

The better path forward is to harness the predictive power of AI. AI models can identify properties vulnerable to damage and even estimate potential damage, proving paramount in rebuilding reinsurer trust. Most impressive of all, AI-powered risk insights show what steps can be taken to reduce or avoid losses entirely. At a time when government weather models are viewed as increasingly outdated, insurers need to prioritize investing in predictive AI.

The ideal AI models should analyze both regional hazard data and property-level vulnerability:

• Hazard describes the likelihood that a specific region will experience a catastrophic or severe weather event. This information is largely based on historical losses but can also be determined by increasingly sophisticated catastrophic (CAT) models powered by the latest advances in supercomputing.
• Vulnerability describes the likelihood that a property will be damaged during an event. It can also quantify the amount of damage the property will sustain. Based on risk factors such as roof condition and defensible space, the most accurate vulnerability data is based on CV detections applied to high-quality imagery. 

Carriers can and must use predictive AI to mitigate losses, proving to reinsurers that they are a safe investment. Imagine a carrier providing coverage in a coastal region prone to floods and hurricanes. Because roof staining, roof material and tree overhang are strongly correlated with hurricane losses, carriers can flag properties exhibiting those factors while using straight-through processing on ones less vulnerable to damage. Carriers can then contact the policyholders in advance of an event to notify them of their risk level. 

If a policyholder simply repairs their roof or trims some vegetation, they could significantly reduce their vulnerability, potentially avoiding future losses. In another example, an insurer could use CV-powered CAT models to monitor and predict the path of a wildfire, notifying policyholders in real time whether they are at risk. When AI is used as a predictive tool, everyone wins. Insurers reduce the possibility of a major loss, policyholders attain a competitive premium and – most relevant for this article – reinsurers trust the risks they are underwriting.

See also: Insurtech: Not Dead but Different

The Imperative of Transparency 

Yet, while embracing digital transformation, particularly the predictive capabilities of AI, is the best way for insurers to regain confidence from reinsurers, that is not enough on its own. If they really want to succeed, carriers must marry innovation with a philosophy of radical transparency.

Reinsurers value transparency. Carriers must not only claim AI use but also transparently show its application, avoiding "black box" technologies. In other words, reinsurers need AI to be explainable. Can insurers show confidence scores and accuracy levels for the AI models they use? Can they pinpoint the exact property attributes that contributed to an overall risk score? Reinsurers want to know if their primaries have a sophisticated and explainable system in place for managing risk. The more they can look at the nuts and bolts of this system, the greater their trust.

Embracing innovative technology and prioritizing transparency is key for insurers to foster stronger ties with reinsurers. Moreover, this dual focus doesn't only benefit business-to-business relations; it ripples out to instill greater trust in policyholders. In essence, confidence in an insurer's process naturally boosts faith across the entire insurance ecosystem.

KEY TAKEAWAY:

--Whether you're implementing AI algorithms or large language model (LLM) tools like ChatGPT, rushing to implement tools without expertise can hurt claim accuracy, data security and confidentiality. As with any new product or service, solutions need to be developed with those who have vast industry knowledge, specific to users’ needs, and must meet the high standards our industry requires for data integrity, confidentiality and the trust our customers expect.

----------

Growing mainstream use of GenAI tools like ChatGPT have supercharged the desire to adopt this technology in every industry, including P&C. GenAI enables interfaces that allow users to engage with AI through natural language, dramatically improving usability. 

GenAI has prompted the technology community to invest significantly in more powerful computing solutions, creating a powerful, virtuous cycle that is very exciting. Tech leaders are now being pressed to deliver programs that integrate generative artificial intelligence into their claims workflows. 

Innovation With Industry Expertise

While our company is equally excited and encouraged by the opportunities GenAI offers, as industry veterans we have the responsibility to make sure AI fear of missing out (FOMO) does not lead to technology implementation without proper due diligence.

With the influx of fintech startups promising to automate claims overnight, it’s easy for companies to take shortcuts in implementing AI and risk damages to carriers and their customers. Often, these companies lack the intricate knowledge and experience in claims management to understand the complexity, or the long-standing partnerships needed for connectivity across the entire workers’ comp or auto claims landscape. Whether you're implementing AI algorithms or large language model (LLM) tools like ChatGPT, rushing to implement tools without expertise can hurt claim accuracy, data security and confidentiality.

Cigna, for example, currently faces a class action lawsuit over charges that it illegally used an AI algorithm to deny hundreds of thousands of claims without a physician’s review. The case illustrates why giving AI too much authority right away may not be the best first step. New tech, we believe, shouldn’t replace human judgment where it’s needed; instead, it should be used to augment expertise and prioritize human experience and intervention.

This is the premise behind the development we have done in our auto physical damage team with the Mitchell Intelligent Solutions portfolio. Mitchell Intelligent Review, for example, combines cloud computing, Mitchell-generated vehicle data and the company’s machine-learning and computer-vision models to scan photos of collision damage and automatically evaluate the labor operations entered on the estimate. The artificial intelligence (AI) then flags problematic estimates that require a closer look by a trained appraiser. Automating this traditionally manual, time-consuming and resource-intensive task is intended to help carriers increase estimate accuracy, ensure quality and pinpoint workflows or areas of the business in need of improvement. The new approach also gives insurers the ability to review every estimate written and then assists them in identifying the specific appraisals they should focus on to accelerate settlement times for policyholders. 

When it comes to the hype around LLM and GenAI, casualty industry professionals need to be even more diligent in using this technology, especially when it comes to privacy concerns for claims processes. You wouldn’t want to place a claimant’s medical or personal identifiable information (PII) through a public system like ChatGPT without knowing where the information is going and who is securing it. Ethical questions about how and where to implement these technologies can only be determined by those with sufficient experience and expertise in the industry to know where the opportunities lie, while proper usage must be trusted to those with appropriate security and technology infrastructure.

See also: 5 Ways Generative AI Will Transform Claims

Opportunities Abound

The good news is there are many practical application opportunities for AI in our industry. These include customer service, triage, potential fraud and property damage and bodily injury applications, just to name a few. My company is looking at these areas and others, using our experience in auto and workers’ comp claims and our proficiency in advanced technologies to provide guidance on where these technologies make the most sense across auto and casualty claims. 

AI continues to provide a powerful opportunity to leverage data (be it medical billing data, repair information, photos of damaged vehicles or images from litigation demands) to improve task automation and enable advanced decision support to claims professionals as they seek to help individuals return to work, achieve optimal health or get back on the road.

As technology leaders, we’re excited about the potential of LLMs and GenAI technology. As with any new product or service, however, solutions need to be developed with those who have vast industry knowledge, specific to users’ needs, and must meet the high standards our industry requires for data integrity, confidentiality and the trust our customers expect. Meeting these demands won’t be easy, but I believe, with the right mix of experience and innovation, the opportunity of GenAI is even better than the buzz.

In the early years of digital transformation, life insurers vying for top market position leaned on the newest technologies to boost the speed and operational efficiency of their services. 

Given the near-ubiquitous nature of digitization, the effectiveness of this approach may have run its course. Advanced technology, particularly AI, has become such a permanent fixture that it has leveled the playing field, no longer serving as the ace in the hole it once was for competing life insurers.

But AI is not a perfect solution for every pain point, and relying on it risks overshadowing the value of human touch. Insurers and agents can understand and address the varied needs, concerns and circumstances of individual customers empathetically – and for now, that remains beyond the realm of artificial intelligence.

After all, life insurance must be handled delicately. Beneficiaries who interact with insurers often do so at an especially sensitive time in their lives, which algorithm-driven systems are not yet best equipped to handle. Therefore, a life insurer’s true differentiator should be one that encompasses the best of both worlds, by leveraging technology that complements the human element of agent-to-customer interaction.

The Pivotal Role of AI

Considering its enhanced analysis and performance capabilities, AI has a pivotal role to play in simplifying and streamlining the complex processes that define the life insurance industry.

Filing insurance claims traditionally involved a series of cumbersome steps, from submitting information through navigating assessments, up until the payout stage. Likewise, underwriting for life insurance usually involves a drawn-out manual assessment of various factors such as age, gender, medical history and lifestyle choices.

Now, AI can significantly streamline risk assessment and pricing, allowing insurers to stay competitive while enabling policyholders to choose from an array of options tailored to their needs.

By simplifying the process, life insurers make coverage more accessible to a broader audience, which increases the likelihood that people will acquire a policy in the first place.

The Human Element

While innovative technologies have excelled in expediting insurance processes, their true success depends on the insurer’s capacity to use those tools to offer personalized support for families and inspire generational loyalty, a concept that would have seemed unimaginable just a few years ago.. 

Life insurance is a uniquely sensitive space because it encompasses so many highly personal matters: mortality, family well-being and financial security. For many, life insurance is more than a mere financial transaction – it signifies a particularly emotional and mournful time in a beneficiary’s life.

But it can also present an opportunity for insurers to foster emotional connections with the bereaved by helping to arrange grief counseling, plan funerals, write obituaries, settle financial affairs and navigate probate. To that end, traditional insurance agents have often been the most effective vendors of this service. Even amid the rise of digital processes, agents are guiding and comforting individuals and families through the difficult bureaucracy of policy purchasing and claims.

Although AI-driven chatbots and virtual assistants can provide responses and clarification instantaneously, they cannot fully replicate human compassion and sincerity.

For these reasons, some life insurance companies continue to offer policyholders the tried-and-true model of agent-customer relationships throughout the claims process, even as they roll out new digital-first offerings such as apps and platforms that redirect users to services for counseling, funeral planning and probate management, among others.

This personable, tech-blended approach not only reduces the workload for agents but does so without automating every interaction, thus preserving the vital human touch.

A Benevolent Blend

For all its bells and whistles, technology within the life insurance industry cannot operate in a vacuum. Digital processes still need that human touch to establish and maintain relationships and make policyholders and their families feel heard, seen and supported.

As marginal differences in speed and efficiency become less of a competitive factor, life insurers will have an opportunity to seek an alternative approach that strikes a balance between AI-driven automation and human interaction. This will ultimately result in a more comprehensive and supportive industry that not only meets the emotional needs of its policyholders but also drives an entirely new line of competition – one based on empathy and compassion.

KEY TAKEAWAY:

--There are hundreds of surety bonds with no underwriting criteria that are categorized as “instant issue.” Insurance agents can obtain these with relative ease from pretty much any provider. However, agents hoping to instantly receive quotes on harder-to-place risks should be on the lookout for providers with automated credit and financial underwriting capabilities.

----------

In late 2001, humanity was eagerly awaiting the unveiling of a technology so trailblazing that it would change the world forever. Apple co-founder Steve Jobs asserted that future cities would be designed around it, Amazon’s Jeff Bezos called the technology “revolutionary” and invested in its development. Others predicted it would eliminate our dependence on foreign oil. The anticipation of its release became so intense that the product had the most hyped launch since Apple’s Macintosh computer.

The product was the Segway scooter.

The surety industry is currently experiencing its own Segway moment in the form of instant-issue bonds. Brokers galore will boast about their ability to instant issue thousands of bonds when, in reality, all they are doing is auto-filling PDFs for bonds with no underwriting criteria.

In this article, we break down what “instant issue” really means and provide insights on the underwriting capabilities agents should actually care about.

The Cold Hard Truth

Instant issue is a loosely used term to describe surety bonds that are not subject to any underwriting requirements and can be issued to all applicants at the same price regardless of credit, business experience, etc. These bonds are so low risk that carriers do not need to attach any underwriting processes.

On these bonds, brokers collect the customer’s information by having them fill out an application and then transfer that information to the bond form. That is the entire process for writing an instant-issue bond. There’s no innovative technology involved, no expert skills required.

In short, instant issue = auto-filling PDFs for low-risk bonds without underwriting requirements.

See also: Exploring the Dual Advantages of Surety Bonds

What Really Matters

Any broker with a Wix or Squarespace account can provide you with instant-issue bonds.

However, very few surety bond providers can automate credit and financial underwriting, let alone incorporate other criteria such as information from obligee databases and direct application programming interfaces (APIs) to business accounting software. While “instant issue” refers to a category of low-risk bonds not subject to underwriting, automated credit and financial underwriting can instantly issue higher-risk bonds that require a credit check before issuance.
  
For example, a broker without automatic credit and financial underwriting capabilities will have to manually run a credit check on the customer after they submit an application. This takes time and effort, leading to delays in issuing a customer’s bond. If that broker had automatic credit and financial underwriting, their system would automatically run a soft credit check on the customer and be able to provide them with a quote instantly.

The Bottom Line

There are hundreds of surety bonds with no underwriting criteria that are categorized as “instant issue.” Insurance agents can obtain these with relative ease from pretty much any provider. However, agents hoping to instantly receive quotes on harder-to-place risks should be on the lookout for providers with automated credit and financial underwriting capabilities.

KEY TAKEAWAYS: 

--The climate around health insurance in the U.S. is continuing to change thanks to rising costs throughout the industry. 

--There are ways to make insurance more affordable for employers and workers to find coverage that accommodates modern needs. 

----------

Employer-based insurance has long been a cornerstone of the American healthcare system, providing millions of workers access to adequate coverage. However, the insurance landscape is undergoing a profound transformation, leading to the erosion of employer-sponsored plans. This blog post delves into the complexities surrounding the erosion of employer-based insurance and its implications for American workers. 

We explore the impact on workers, the evolving role of insurance brokers and agents and alternative coverage options available to individuals. 

The Erosion of Employer-Based Insurance

Rising healthcare costs are a problem across the globe. Medical spending growth includes a higher demand for care, technological advancements and the urgent need to develop more vaccines and treatment options. The U.S. government alone invested nearly $32 billion toward creating a COVID-19 vaccine. While other advancements may not seem as urgent to the public, the continual need and economic inflation affect how much insurance can cover and what employers can afford to meet that coverage. 

Insurance premiums increase because there is a higher price to cover healthcare costs. Employers spent an average of $15,159 in premiums for a family of four before the pandemic.

A change since the pandemic is the number of workers taking unconventional positions that allow for more flexibility or the ability to work from home. Gig economy or multiple part-time jobs can provide an income for an individual, but those positions rarely offer an insurance plan, causing workers to seek independent healthcare coverage. 

When more employees seek different career paths and have high insurance costs, employers are put in a position where it is either not worth offering insurance or they want to provide more-attractive plans to encourage workers to apply for full-time jobs. 

The last time there was a significant policy change was the 2010 passing of the Affordable Healthcare Act (ACA). The act mandated that employers provide insurance to 95% of full-time employees 26 or older. Public insurance programs like Medicare and Medicaid see more regulation than private options, which leads to significant disparities in price and coverage options among companies. 

See also: Employer Trends Shaping Workplace

The Impact on American Workers

While some Americans prefer a new, flexible work environment, many cannot stray from a nine-to-five job, especially when responsible for their children or older parents. 

Due to the rise in nearly all costs, more older adults remain in the workforce or are re-entering it. Without attainable insurance plans, they may have to opt out of the employer plan or be unable to afford other needed items. 

Another struggle is the ability to afford subpar plans that don't cover complex needs. When coverage is costly or absent, it discourages people from seeking preventative care or treating symptoms until they become dire. According to the Kaiser Family Foundation, one in five adults don't seek needed medical care because they fear they can't afford it. 

Though many hospitals will offer plans for patients who need emergent care, seeking preventative care can help individuals avoid those life-threatening scenarios. Such care also leads to better health outcomes. People with little or no coverage are unlikely to get routine screenings or go to the doctor when symptoms arise. The American Cancer Society reports that an insured person with stage II cancer is more likely to live than someone with stage I cancer who doesn't have insurance. 

When affordable or comprehensive care is inaccessible, employees must rethink their options. Depending on their yearly income, they may not fall into the right tax bracket for a low-cost ACA plan. 

Employers often reduce pay to afford healthcare costs, which strains employee relationships and could increase turnover. While surveyed employees say they'd rather have better healthcare than a higher salary, a pay cut at contract renewal often has workers evaluating options that can afford the same or greater salary with the same benefits. 

Seeking Alternative Healthcare Coverage 

When an employee can’t access employer health benefits or waives out of group coverage, there are other options that could benefit them and their families. 

Medicaid 

There are several benefits to Medicaid. It offers coverage for people who otherwise couldn't afford care. People with these benefits are more likely to seek care early and have better health outcomes. Kids who grow up with Medicaid are likelier to become healthy adults than those without insurance. Satisfaction ratings from people with Medicaid are comparable to those with private insurance. Because Medicaid is for low-income individuals, there are often lower out-of-pocket costs than with other providers. The program also helps low-income households find financial security. 

Gaps in coverage exist, with dental and mental healthcare hard to access for many on the plan. Physicians are less likely to accept Medicaid patients than Medicare patients or private insurance plans. Most doctors who accept Medicaid are based in community health centers, limiting the ability to choose among providers. The program's coverage can also be inconsistent, with states influencing how well people do on the plan. 

Affordable Care Act 

Subsidies can make health insurance less expensive, and administrative costs must be 20% or less of your premium. 

The ACA requires that qualifying plans offer at least 10 essential health services, including wellness visits without a copay or deductive. Plans also cannot deny coverage to someone with a preexisting condition. For many low-income individuals, the marketplace offers various options without needing Medicaid. Many are from companies employers offer plans from but at a more affordable price. Some companies will provide stipends to cover an ACA plan. 

If someone doesn’t qualify for a subsidy, they might find it difficult to find an affordable ACA plan. You can’t always pick and choose coverage options. For example, a single man might end up paying for maternity care coverage. 

Though the tax penalty for uninsured people no longer exists on a federal level, some states enacted mandates that could force someone to get an ACA plan they don’t want. The website can also be hard to navigate for non-tech-savvy customers. 

Health Sharing Plans 

A health-sharing plan allows participants to pay into an account that provides coverage for health care events. 

Anyone can pay into one of these plans at any time, and they are often more affordable than other options. There are also no restrictions based on preexisting conditions. Most of these plans in the U.S. are from Christian nonprofits, though you don’t have to be part of the religion to participate in most. Some prefer enrolling with these Christian organizations so they don’t have to support healthcare that doesn’t align with their beliefs. 

People often find a sense of community in these programs, with members sharing messages of encouragement and prayer. Some even offer coverage for adoptions or funerals. 

Most of these plans don’t offer full coverage for dental or vision services, and only some offer discounts. The service controls what expenses get covered and what isn’t, and members don’t always know if their care will receive payment from them. 

There are no health-sharing plan regulations, meaning members could receive no compensation if the organization behind one goes bankrupt. It is also hard to seek legal action against them. Health-share plans don’t qualify as minimum coverage, so employers cannot offer it as an alternative to another plan. While there are no specific restrictions for preexisting conditions, you may have to pay an extra fee. 

Whatever coverage you choose, it is important to research and ask questions before committing to the coverage. 

How Brokers and Agents Are Handling the Changes 

If a company has remote workers, a broker can help a company or the individual employer navigate which provider is best in which state and if a stipend is a better coverage option. Employers or employees need to work with a credible broker or agent who can guide the increasingly complex insurance industry. 

A certified professional should openly provide their credentials, including their license number, when asked. When not meeting at the company location, look at the company's website or call them to confirm that the person you're meeting works there as an agent or broker. 

When someone is desperate to find coverage, they could fall for a ghost broker scam, where an unqualified "broker" sells them a phony policy that providers won't accept and offers zero coverage for anything. Unsuspecting customers could spend hundreds or even thousands of dollars before they try to use the coverage and realize they invested in a fake company. 

As a reputable agent, you must not shame clients who had this experience. Some of these scams have phone numbers, websites and business cards that look very real. Phony agents can even forge credentials. Raising awareness about these scams can help others avoid them. 

Someone with expertise can ensure everyone gets the right information and coverage options. 

See also: How to Think About AI in P&C

The Future of Employer-Based Insurance

While there is no set policy, there are proposed solutions to preserve employer-based health insurance. 

There is strength in numbers. For employees to pay less for quality insurance, the employer must negotiate with the insurer for better rates. Alone, it’s hard for a company to succeed, but banding together with other companies and firms could give them more power. Insurance companies need customers. If multiple employees threaten to back out, it could provide the needed push for change. 

Of course, insurers aren’t solely to blame for high costs. Their response is partly due to rising health care costs. However, not all of those prices are necessary. 

One of the most recent controversies involved the price of epinephrine auto-injectors. Mylan Pharmaceuticals made a significant profit by increasing the lifesaving medicine’s cost by 400%. The controversy eventually led to intervention and a multimillion-dollar settlement–but it shows the sort of cost increase insurers must cover. Stricter regulations on pharmaceutical companies and capping prices for vital medications could help. 

There are other ways to provide sufficient coverage for employees. Companies can offer health savings accounts (HSAs) that the company and employee can use for free in any eligible scenario–such as dental and vision care or to help cover emergency expenses. These accounts are taxable when used, so it’s important to balance the amount available with the amount taxed. 

Employers can also come together to offer an association health plan, which helps everyone afford accessible coverage. There are some challenges with these plans. Businesses must conduct a risk and benefit analysis on whether there could be lapses in coverage or higher premiums. 

With these options, employers and workers have more opportunities to provide affordable coverage. 

Learning From the Erosion of Employer-Based Insurance 

As a broker or agent, you must know what others in and affected by the industry face. Finding the best solutions is challenging with the steady decline of employer-based options. However, there are ways to help both companies and their workers. 

Between rising healthcare costs and the global pandemic, you must consider many industry changes. With high prices limiting an employer’s ability to provide quality plans, more employees choose remote and hybrid work that doesn’t always offer insurance. You will likely see more individuals seeking advice on choosing personal health insurance through the ACA or other solutions. 

Other options like health-sharing and Medicaid offer different options for employees in need. However, there are challenges to these solutions, including lapses in coverage. Knowing the pros and cons of each available plan or alternative can help workers afford their care. 

As changes continue, organizations and policymakers will push for more options. It is vital to stay informed and seek advice if a policy needs clarification. Everyone can benefit from exploring their coverage options to support their well-being now and in the future.

KEY TAKEAWAYS:

--AI and actionbots will break through bottlenecks that can lead a high percentage of callers to drop a connection.

--In call centers, where annual employee turnover can be 100%, generative AI will help get new employees up to speed quickly.

--Actionbots will move AI beyond conversational capabilities to actively executing tasks and streamlining workflows.

----------

The true potential of AI extends far beyond just cutting expenses. The holy grail for businesses, especially in the insurance sector, is the ability to drive top-line growth.

Emerging technologies, particularly generative AI and actionbots, are at the forefront of this trend. It means that call centers will no longer be viewed as cost centers but an opportunity to turn these hubs of customer interaction into revenue generators.

Instead of navigating through a maze of menu options or waiting on hold, customers can interact with AI that will better understand natural language, ask relevant questions and upsell and cross-sell products. The AI will not only streamline the quote-and-buy process but also offer a more tailored and satisfying experience for the customer, increasing the likelihood of conversion and loyalty.

Let's take a deeper look at how technologies like generative AI and actionbots can transform the customer experience.

Breaking Bottlenecks

The typical customer phone call for obtaining quotes and finalizing purchases in the insurance sector is often cumbersome. It's riddled with multiple steps, from gathering detailed information like addresses and VIN numbers, and hobbled with the intricacies of legacy systems and compliance requirements. The inability to capture all necessary information during the initial call further complicates the process.

This complexity frequently results in high drop-off rates. It's not uncommon for conversion rates, even after a caller successfully reaches an agent, to hover in the single-digit percentages. Such inefficiencies not only frustrate potential customers but also represent significant missed revenue opportunities for insurance companies.

To put this into perspective, even a marginal improvement in conversion rates can have a profound impact on an insurer's bottom line. For instance, consider an insurance company that fields 20 million calls annually. If agents typically achieve conversion rates exceeding 80% once they engage with a caller, a mere 1% increase in initial conversion can unlock an additional 160,000 potential customer interactions.

By leveraging the capabilities of generative AI and actionbots, insurance companies can simplify these interactions, reduce drop-offs and capitalize on these previously untapped opportunities.

Leveraging Generative AI

For the call center, annual employee turnover can exceed 100%, leading to significant knowledge gaps and missed opportunities. However, generative AI can act as a force multiplier for new agents, regardless of their tenure. Instead of relying solely on traditional training methods, agents can be assisted in real time by AI systems that offer suggestions, prompts and insights tailored to address customer queries effectively. This not only accelerates the onboarding process but also ensures consistent service quality, even from those who've been on the job for a few weeks.

The power of generative AI lies in its ability to process vast amounts of domain-specific information, such as call logs, emails and product details. This deep understanding minimizes errors or "hallucinations" and ensures the delivery of relevant and accurate information to both agents and customers.

While traditional AI models often struggle with creating natural-sounding content or handling unstructured data, generative AI excels at these challenges. It offers a level of personalization and adaptability previously unattainable, making interactions feel more genuine and tailored to individual customer needs. This means going beyond the typical chatbot experience, which can often feel mechanical and not be responsive.

Another benefit of generative AI is stateful memory, which is about retaining and recalling information from previous interactions. Imagine a scenario where a customer doesn't have to repeat their details or query during subsequent calls. This not only saves time but also eliminates a significant pain point for customers, fostering loyalty and trust.

Actionbots

Actionbots represent the next evolution in AI, moving beyond mere conversational capabilities to actively executing tasks and streamlining workflows. It's not just about answering questions anymore; it's about engagement and tangible actions that enhance the customer experience.

A key to actionbots is pre-built integrations. An insurance company can rely on hundreds of systems, such as for CRM, ERP, billing and RPA, but actionbots can seamlessly weave themselves into those systems, ensuring that data flows smoothly and that tasks are executed efficiently. This integration becomes especially crucial when dealing with processes like quotes and purchases, which often require coordination across multiple platforms.

Here are some of the practical uses for actionbots:

• Fulfill reactive tasks: This involves automating requests from customers, such as password resets, updating address information and adding a newborn. It's critical to have prebuilt integrations that are connected to user inquiries.
• Get recommendations: Drawing from customer profiles and past interactions, actionbots can suggest additional services or products. For instance, after analyzing a customer's auto insurance details and driving habits, the actionbot might recommend adding roadside assistance or collision coverage. Or it could suggest something like: "Did you know you could save 20% on your premiums if you use a tracking system for your mileage?"
• Use automated content generation and workflows: Drafting FAQs or knowledge-based articles can be time-consuming. Actionbots, however, can analyze patterns in customer queries and autonomously generate content that addresses common questions. This not only ensures that customers have access to up-to-date information but also reduces the workload on human agents. Actionbots can automate complex workflows, such as adding an insured to a policy, selecting more coverage and adding a new vehicle. You can build these actionbot workflows by using no-code and low code, via drag and drop. You can even use a natural language prompt for this, such as, "First, update the CRM with the new profile and then add this to the billing database."

Conclusion

AI technologies, from generative AI to actionbots, will reshape the way insurance companies operate, engage with their customers and drive growth. The shift from viewing AI merely as a cost-cutting tool to recognizing its potential in driving top-line growth marks a significant evolution in business thinking.

The integration of AI into the very fabric of insurance operations, from call centers to CRM systems, anticipates challenges, breaks bottlenecks and delivers solutions even before the customer realizes they need them.

The future of the insurance industry is one where AI plays a central role, not just as a back-end tool but as a front-facing partner. As the industry continues to evolve, those companies that embrace and integrate these technologies will undoubtedly lead the way, setting new standards for customer engagement, operational efficiency and business growth.

KEY TAKEAWAY:

--Rather than continuing to tweak existing products, which risks making them even more complex and expensive, insurers can explore and develop new coverage options. There are now decades of mortality and morbidity experience data from millions of customers, and that portfolio is still growing. Coupling these data with the available advanced analytics of today means companies have an unprecedented opportunity to innovate.

----------

Ever since the first standalone long-term care insurance (LTCI) policy was sold in the 1970s, the product has been both a boon and a challenge for U.S. life insurers. It exploded in popularity in the late 1980s, but the generous underwriting and pricing that fueled many of the sales came back to haunt providers in the more straitened economy of the early 2000s. Since then, providers have exited the market in droves, and those with portfolios have had to levy substantial premium increases on policyholders. Today, only a few insurers still field long-term care cover, and it’s the rare ones that are actually writing new business. 

Does this mean LTCI as a product line in the U.S. market has had its day and that should be retired? 

In a word, no. 

A Rethink Is Due 

The need for middle-market insurance products that can affordably cover the many expenses associated with the long-term care needs of the world’s fast-growing senior cohorts has never been greater. Rare is the family that has not had to confront the unexpected costs of funding continuing care for a parent or grandparent. And with lifespans lengthening, the ailments of age are becoming more prevalent. Despite this, insurance companies are still understandably hesitant to enter or ramp up their participation.

How can this clearly evident market potential be translated into tangible products and services? More to the point: Can insurers develop LTCI products that can meet growing market needs for affordable long-term financial protection and still be profitable?

Right now might be an optimal time for insurers to think about ways to innovate long-term care products – how to make them simpler and still profitable to underwrite and sell, and at the same time affordable and sufficiently protective for consumers.

Taking on this challenge will require willingness to change traditional ways of thinking about LTCI cover. 

Rather than continuing to tweak existing products, which risks making them even more complex and expensive, insurers can now explore and develop new coverage options. There are now decades of mortality and morbidity experience data from millions of customers, and that portfolio is still growing. Coupling these data with the available advanced analytics of today means companies have an unprecedented opportunity to innovate in this market, undertaking sophisticated and highly granular analyses of their potential customers to develop products that can ease long-term care’s financial burden.

See also: Unlocking the Future of Long-Term Care 

Opportunity Is Here

Ideally, LTCI products can be developed for both group and individual markets, and insurance companies can benefit from collaborating with ecosystem partners, whether reinsurers, incubators or other knowledgeable third-party product development experts. One such recent RGA-developed innovation, caregiver insurance, is designed as an affordable short-term option for working individuals, who can buy it to cover cost of care for a loved one. 

Other innovations being examined include bundling long-term care cover with life insurance and disability, developing policy frameworks that can evolve as a policyholder’s age and needs change and policies focused on helping to keep seniors in their own homes. 

Ideally, LTCI should be easy for agents to sell, simple and affordable for customers to purchase and use and profitable for insurers to provide. More than that, it should serve the middle market’s real and current needs and be positioned to evolve along with market needs. Insurance companies have a remarkable opportunity to create much-needed social value now and over the long term.

Day in and day out, insurers handle thousands of documents and varied forms of content, often leaving them struggling to catch their breath. Content generated in insurance companies comes in different shapes and sizes, spread across applications, systems and departments. To access this content, insurers are forced to sift their way through scattered systems, testing their time and patience and resulting in lower productivity. 

For any insurance company, attaining operational efficiency while simultaneously grappling with the colossal volume of data generated from documents, emails, form submissions, social posts, photos/videos and instant messenger interactions is no cakewalk. And an outdated approach to content management only adds to their plight. One of the most common approaches to tackle the growing content volume was adding point solutions, which only led to complexity. 

A Square Peg in a Round Hole: Why Traditional Content Systems Fail the Modern Insurer

Traditional content management systems have a monolithic architecture with a single repository. Documents are mostly undigitized and require ample human interventions across processes. On the other hand, modern content services platforms have a modular, services-based architecture and large-scale federated repositories. This approach enables the modern insurer to ensure seamless collaboration across departments, processes and functions and easy access to the right content at the right time. Documents from all sources are digitized and support all forms of content. Powered by AI and machine learning, the modern systems drive intelligence into processes and decision-making. 

A modern content management system:

1. Enables a Centralized Location for Data Access and Management 

Insurers struggle with finding the right content on time and often get lost in the jungle of structured and unstructured data scattered across multiple locations and locked in siloed systems across the organization. 

Modern content management systems can help insurers store, access and manage all content at a centralized location. They support the digitization of all content, and the digital content assets can be tracked, secured and monitored more easily. Policy underwriters, claims officers and other stakeholders have a unified view of all the case-related information. They do not need to refer to multiple applications/systems for information, thereby improving productivity and reducing turnaround time. 

Documents for various processes like new business, underwriting, claims, policy servicing, provider management and agent/distribution management can be centrally archived and managed by the system. This enables streamlined processing between the branches of the Insurance organization and the sales partner. This, in turn, ensures the desired economy of scale, increased operational efficiency and efficient management of documents.

2. Delivers Context in Engagements and Allows Intelligent Decision-Making

Content analytics and AI-led technologies can help insurers extract information from documents, images and videos. They can automate processes using robotic process automation (RPA), artificial intelligence and machine learning to extract contextual information and actionable insights in real time. And the best part is it doesn't require heavy coding. 

A modern content services platform powered by AI can seamlessly integrate with the core system. It can analyze historical data and perform intelligent indexing to make content easily discoverable. Imagine pulling out data, an email or a recording of a current claim settlement! This kind of smart decision-making can improve customer experience and insurer productivity. 

3. Allows for Seamless Collaboration

In any insurance organization, a certain level of collaboration between stakeholders is required at every relevant stage after the case initiation. Be it adding or modifying comments on documents or sharing recommendations, stakeholders need to collaborate in real time to ensure process accuracy and avoid errors.

A modern content management system allows stakeholders to search, generate, bookmark and share multiple forms of content in pre-defined templates. It also enables them to initiate case-specific virtual meetings and conversations. With a content management system, organizations can enhance the collaboration between stakeholders and allow for faster resolution of cases. 

4. Enhances Security and Compliance

Insurers manage a massive amount of documents, images, audio, videos and other content daily. This content can also include sensitive information and crucial data that must be protected at all costs. However, poor enforcement of rights-based access to critical documents can make it difficult for insurers to enforce document security and integrity.

A modern content management system can enable security at document and data levels while allowing insurers to meet the evolving regulatory, reporting and internal governance requirements. It also helps them to ensure compliance with various security and retention standards.

5. Fast-Tracks Cycle Time

The massive amount of content waiting to be processed can hinder insurers hoping to improve their approval cycle time and deliver fast and efficient customer service.

By leveraging a content management system, insurers can keep track of any missing or required information and ensure that all information is collected and available for review on time. For instance, adjusters can track missing or required information during claims setup to ensure all information is collected and available for review before making key determinations.

A content management system can seamlessly integrate with existing IT systems and streamline multiple business processes. It can allow insurers to swiftly extend existing processes and create new ones. This can fast-track the workflow processes and help insurers achieve optimum productivity.

6. Ensures Exceptional Customer Service

Customers today expect swift and efficient service at every stage of the insurance policy lifecycle -- from policy initiation to policy renewal and claim settlement. 

With a content management solution, insurers can swiftly process the enormous content at their disposal and contextually engage with customers. 

For instance, what if your organization's content management system can leverage AI-enabled intelligent indexing to interpret historical data and make it discoverable? Suppose your system allows you to locate a letter, email or call recording from five years ago where the policyholder requested to modify certain aspects of the coverage that are currently impacting the claim. This can help insurers in ensuring intelligent decision-making, accelerating processes and delivering an exceptional customer experience.

To Conclude

It's time for insurance companies to say adieu to the era of outdated legacy content management systems. Modern content management systems are critical for insurance companies to efficiently process multiple forms of content, minimize operational risks, enhance collaboration and achieve ultimate productivity. These systems have become indispensable.