Baseball season has arrived.  

"Moneyball," by Michael Lewis, it’s hard to believe, was published almost 20 years ago in 2004. For the unfamiliar, "Moneyball" tells the story of how Billy Beane, general manager of the Oakland A’s, used advanced analytics to identify high-value, low-budget players and win with payroll a fraction of major-market teams like the Yankees and Dodgers.    

Moneyball-type analytics, based on static player and team outputs, have since become table stakes. 

Last year’s World Series champion, the Houston Astros, won despite letting a billion dollars in free agents walk. Their opening day payroll of $180 million ranked eighth in the league. The Astros also won the World Series in 2017 with a payroll of $124 million, ranked 17th. Over the last six seasons, among legitimately contending teams, the Astros rank a clear first in payroll-cost-per-win. 

The Houston Astros were the first team in the league to go beyond Moneyball, investing in observational process intelligence, measuring player and team inputs, not just outputs. Installing computer vision devices and Doppler radar for bullpen and batting practice sessions as well as live games (this year a league-wide standard), the Astros created a class of kinetic data on players in motion to help them improve. An example of observational process intelligence from a different sport is Trackman in golf.   

Observational process intelligence has arrived in our favorite sport--insurance—helping leaders evaluate core marketing, distribution, underwriting, claims and customer service operations in motion. Our company, Skan.AI, combines computer vision with AI to observe humans and the tools they use as they’re using them, in real time, generating kinetic data for continuous improvement. 

See also: Automation 2.0: What's After RPA

Live analytics include: 

• Process maps and process variability: Dynamic process mapping with variation in how work really gets done
• Workforce utilization: quantified utilization at the operator, business unit and geography level
• Workforce productivity: quantified productivity metrics at the case and operator level
• Technology utilization: quantified application usage across operators and time, with available replays of actions as they occurred
• Activity-based costing: quantified unit costs at the case level filterable by any vector--customer, geography, product, etc. 
• Automation discovery: identification and ranking of automation opportunities quantified with estimated cost savings per opportunity 

Everything rolls up to an ops dashboard with hourly or daily reporting to address issues and opportunities as they arise, in or near real time.  

Observational process intelligence helps insurers find new ways to win, selling more policies, drawing new customers and minimizing cost-per-victory.

According to the latest report from the Bureau of Labor Statistics (BLS), there were 5,190 fatal occupational injuries recorded in the U.S. in 2021, an 8.9% increase from 2020. In 2019, the fatal work injury rate before the COVID-19 pandemic was 3.5 fatalities per 100,000 full-time equivalent workers. This number increased to 3.6 for 2021, which represents the highest annual rate since 2016.

“Even if your particular industry is not high on this list, the exposures that led to the workplace fatalities exist in almost every industry, and employers should certainly be able to find relatable events or exposures,” said Matt McDonough, assistant vice president of risk services at Safety National. “This report shows companies the types of events and exposures that led to workplace fatalities. If they do not have controls in place for some of these exposures, they should certainly start building those programs out now.”

Hardest Hit Industries

Four industries ranked highest for total number of fatalities:

1. Transportation and Material Moving: This industry reached a series high in 2021. BLS states that there was a 16% increase in deaths for driver/sales workers and truck drivers from 2020 to 2021.
2. Construction and Extraction: These types of occupations ranked second in number of fatal worker injuries despite experiencing a 2.6% decrease in fatalities from 2020.
3. Protective Service: Firefighters, law enforcement officers, transit police and others in this field saw a 32% increase in fatalities in 2021. More than 45% of these were due to homicides (116) and suicides (21).
4. Installation, Maintenance and Repair: This industry saw 475 fatalities in 2021, an increase of 21% from 2020.

The most hazardous working conditions are often related to labor-intensive occupations. The current labor shortage is only exacerbating on-the-job fatalities and injuries. More workers are being asked to take on more dangerous tasks, resulting in a higher risk of injury. There is also a lack of training and a shortage of experienced workers. Finally, employers are trying to manage their business with fewer resources, which can lead to a reduction in safety measures.

Surprises in the Report

Exposure to harmful substances was the third leading cause of fatalities throughout the U.S. in the workplace, just falling behind transportation incidents and falls, slips and trips. These were fatalities attributed to unintentional overdoses, which means nonmedical use of drugs and alcohol.

According to the BLS, exposure to harmful substances or environments led to 798 worker fatalities in 2021, the highest figure since the series began in 2011. This major event category experienced the largest increase in fatalities in 2021, increasing by 19% from 2020. Unintentional overdose from nonmedical use of drugs or alcohol accounted for 58% of these fatalities (464 deaths).

The transportation sector continues to be the most affected industry for workplace fatalities in the U.S. While this may not be considered a surprise, the sheer number of fatalities within this industry is shocking. The increased number of delivery drivers on the road, the increasing number of distracted drivers and insufficient safety protocols to protect workers all contribute to the large number in this industry, which continuously ranks number one in the BLS report.

See also: Unprecedented Severity of WC Claims

Tips on Managing Risks

In light of the information provided in this report, the following are some strategies that companies can implement to help reduce workplace fatalities:

1. Implement Safety Protocols: Employers should implement clear safety protocols and procedures, including important information on how to safely perform certain tasks and what to do in emergencies.
2. Develop Training Programs: Develop safety training programs to help workers stay aware of potential hazards and know how to safely perform their jobs.
3. Promote Safety: Promote a culture of safety in the workplace by emphasizing the importance of following safety protocols and the consequences of not doing so.
4. Upgrade Equipment: Regularly check and upgrade equipment and replace anything that is damaged or worn out.
5. Provide Personal Protective Equipment (PPE): Provide PPE to workers who may be exposed to hazardous environments or situations.
6. Conduct Safety Audits: Regularly conduct safety audits and take corrective action as needed.

Companies should also encourage workers to report any potential hazards they may notice, post signs to remind workers of safety protocols and to help them recognize potential hazards and hold regular safety meetings to ensure that workers understand all safety protocols.

McKinsey has been raising the alarm for some time about how insurers are in danger of losing relevance. The key indicator that we should be concerned is that global GDP is growing faster than insurance premiums, suggesting that insurers aren't keeping up with clients' needs. 

Three areas stand out as ones where insurers seem to be backing away from the risks: natural catastrophes, climate risk and cyber. With natural catastrophes, damages are increasing so fast that they are outstripping coverage. With climate change, the issue is more that attempts to address it rely on new technology, so there is little or no historical data to use for pricing. With cyber, attacks are proliferating so rapidly and changing shape so quickly that many insurers are being cautious.

Now, nobody is saying that insurers should just step in front of these massive risks so they can stay relevant. That would be a good way to get walloped. But McKinsey argues that there are ways to increasingly lean into all of these risks, through a combination of mitigation and pricing, that will grow the industry while preserving its traditional, protective role in society.

In its Global Insurance Report 2023, titled, "Expanding Commercial P&C's Market Relevance," McKinsey says: "While premiums for commercial lines have been growing over the past three years at approximately 7% per year, rate hardening has driven most of this growth. After adjusting for rate growth, global premiums lagged significantly behind real global GDP growth during this same period, indicating a decline in the relevance of commercial lines."

With natural catastrophes (NatCats), the basic problem is just that there have been so many. "Since 2017," the report says, "the U.S. has experienced an average of 15 NatCats per year with damages exceeding $1 billion—up from fewer than 10 per year in the previous decade and fewer than six in the decade prior to 2007." 

With climate risk, the report talks more about opportunities as the world tackles the problems. It says "the transition to a net-zero economy could account for more than $800 billion in annual global capital expenditures in renewable energies and decarbonization technologies by 2030. These new technologies will create new forms of risk requiring protection, and the resulting insurance value pool could be worth up to $15 billion, concentrated in property as well as energy and construction specialty lines." The report says insurers haven't found the renewable energy line of business to be especially profitable, so they have backed away, but says they can do better as they learn more and can develop risk-engineering services "to accompany clients on their way to net-zero emissions."

With cyber, the report talks about a massive problem... representing a massive opportunity:

"As widespread technological shifts have permeated nearly every aspect of work, especially with the rise of remote work environments, cyber risk has become ubiquitous.... Already, cyber economic losses in 2020 totaled $945 billion—more than one hundred times the total premium market ($9 billion in 2021)—indicating a massive protection gap. Even if only a fraction of these losses is insurable, it could translate to a more than $100 billion growth opportunity for the global commercial-insurance industry."

McKinsey says there are four ways to tackle the protection gaps in NatCats, climate risk and cyber: innovating on products and services, adjusting pricing to reflect the true cost of the risk, investing in risk prevention and mitigation services and educating stakeholders to raise awareness of the risks. 

But I've already gone on long enough, so I'll leave you to read about those four options here, in the full report, if you're interested.

While I don't see insurance ever becoming irrelevant, I do think McKinsey has a point: We shouldn't back away even from wildly complex problems like NatCats, climate risk and cyber. We obviously need to price the risk appropriately, but we should lean into our societal role and use all our data and expertise to help the world tackle those issues. We'll stay relevant, earn a lot of goodwill -- and generate a ton of business. 

Cheers,

Paul

P.S. Often, I see items that I think are worth noting, even though I won't go on at length about them, so I'm going to start appending some here. I hope you find these nuggets useful.

--CEOs still don't seem to be seeing that long-predicted recession. A Fortune survey that drew responses from 149 CEOs of major companies around the world found that 45% expect their firm’s growth to be strong (32%) or very strong (13%) over the coming 12 months. Another 44% said modest, while 12% said either weak (10%) or very weak (2%).

--A PwC survey found that 84% of executives thought consumers "highly trusted" their business. 27% of consumers agreed. Hmm. That result took me back to a survey Chunka Mui and I cited in our 2008 book, "Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years." The survey found that 80% of executives thought their product was the best in the market -- and that only 8% of their customers agreed. We really have to stop kidding ourselves.

At least executives seemed to have a better handle on employees' thinking. PwC found that 79% of executives thought they were highly trusted by employees, and 65% of employees agreed. 

--The Insurance Information Institute, a sister organization of ours at The Institutes, released its latest economic outlook. The key takeaways are:

• Property/casualty (P/C) insurance saw its cyclical underlying growth rebound fail to materialize in 2022’s second half as interest rate tightening depressed housing starts, corporate spending, and vehicle expenditures.
• Increases in P/C replacement costs (e.g., vehicle parts, housing construction materials) slowed over 2022’s last two quarters but are up 40% since 2019.
• U.S. gross domestic product (GDP) growth is likely to remain depressed for at least the next two quarters after the Federal Reserve shifted away from its hawkish stand on interest rates; the Fed’s three-year consumer price index (CPI) expectations remain overly optimistic, Triple-I believes.

The devastating impact of natural disasters is felt by millions of people across the globe each year. Census Bureau data from the U.S. revealed that, in 2022, natural disasters caused long-term displacement of homeowners, with Louisiana and Florida being among the worst affected states. The aftermath of natural disasters creates a gap between the risks homeowners face and the coverage that insurers can provide. However, technology-driven climate insurance can play a significant role in addressing this gap, empowering insurers to pivot strategies, modernize legacy applications and deliver vital products that minimize coverage gaps with speed and efficiency.

Insurers often face the challenge of understanding and mitigating risks associated with climate change. By leveraging data and insights from disasters in previous years, insurers can adjust their strategies to better serve their customers. Technologies such as artificial intelligence (AI) and blockchain can enhance customer experiences and help insurers modernize their legacy applications.

One area where technology can play a critical role is in delivering superior products at a superior price. Data analysis of past disasters and the resulting damages can help insurers to better understand the accompanying risks to such events and design more efficient products. Data-driven insights can also help insurers to price their products more competitively to make them more accessible to homeowners in high-risk areas.

A recent report by Aon on catastrophe events in 2021 highlighted the significant losses incurred due to natural disasters. The report emphasized the need for insurance companies to prioritize climate change mitigation and adaptation measures to better serve their customers. Natural climate catastrophes contributed to $313 billion in global damages last year, only 42% of which ($132 billion) was covered by insurance programs, leaving a 58% coverage gap ($181 billion). The smart use of technology can not only help insurers to better understand the risks associated with climate change but also deliver innovative and cost-effective solutions to their customers that chip away at the global coverage gap. 

One example is the use of AI in risk assessment. AI algorithms can analyze vast amounts of data to identify potential risks and alert insurers to take preventive measures. For instance, AI can help insurers identify high-risk areas prone to natural disasters and alert homeowners in these areas to take necessary precautions. This can not only minimize damages but also save lives.

In addition to identifying potential risks and alerting insurers, AI can be used to automate underwriting processes. By using AI algorithms to analyze data from various sources, insurers can make more accurate underwriting decisions and minimize the time and costs associated with the process. AI can help insurers determine appropriate premiums, evaluate risk factors and provide customized coverage options for policyholders tailored to their particular needs. Additionally, AI-powered underwriting can help insurers identify market opportunities and develop innovative insurance products tailored to specific customer needs.

Blockchain is another technology that can invigorate the insurance industry. Blockchains can provide a transparent and secure platform for insurers to share data and verify claims, reducing the time and costs associated with claims processing. Moreover, insurers can use blockchain to minimize fraud and ensure that payouts reach legitimate policyholders.

See also: The Way to Address Climate Change

Parametric insurance can be especially beneficial in underserved markets, where traditional insurance coverage may be scarce. Due to the predetermined criteria for payouts, parametric insurance can reduce the time and costs associated with claims processing, enabling quicker  payouts to policyholders. This is particularly important in areas where natural disasters are frequent and the need for rapid recovery is paramount. By providing a more accessible and affordable insurance solution, parametric insurance can help close the coverage gaps in underserved markets and provide homeowners with the financial protection they need during times of crisis.

AI, blockchain, and machine learning are critical technologies that can support the implementation of parametric insurance. Insurers can better understand the risks associated with natural disasters by leveraging AI and machine learning algorithms to gauge potential damage and adjust parametric insurance products to ensure that payouts are triggered when necessary. The immutable nature of blockchains ensures that data is tamper-proof, and policyholders can trust that their claims will be processed accurately and efficiently. The combination of these technologies provides a robust framework for implementing parametric insurance, reducing coverage gaps and ensuring that homeowners in underserved markets have access to the financial protection they need.

In addition to leveraging technology to improve climate insurance, there is also an opportunity to explore non-traditional sources of risk capacity. As natural disasters become more frequent and severe, traditional insurance providers may face limitations in their capacity to absorb risk. However, there are alternative sources of risk capacity, such as capital markets and public-private partnerships, that can provide additional resources to ensure homeowners in affected states have access to climate insurance products. Through diversifying risk capacity sources, insurers can better serve their customers, minimize coverage gaps and mitigate the financial impact of natural disasters on homeowners.

As natural disasters continue to pose significant risks, it is essential for insurers to prioritize climate change mitigation and adaptation measures, and technology can play a crucial role in achieving this.

Over the last decade, we have seen an unprecedented shift in the makeup of the underwriting workforce in insurance. As of 2020, Millennials and Gen Z combined to make up 43% of the workforce – and that number is growing quickly. That means companies employ four generations of people with a wide range of life, professional and technological experience to account for.

Formative experiences for each generation tend to create some similarities in how individuals approach their work. Take writing a research paper in college. Baby Boomers went to college in the pre-internet era, where they had to do painstaking research on a microfiche machine – getting a reference from a book, finding the right microfilm and then hoping it was what they needed. Gen X could tap into the power of the early internet, with a single search term yielding dozens of research references available via a single click. The efficiencies have only accelerated since then, with Millennials able to download e-books instantly and Gen Z now able to leverage the power of ChatGPT to source the material and specific points needed to support their work.

The evolution of the tools available has been truly mind-blowing and set very different precedents for how each generation will approach their daily work life, as well as what their expectations are about their day-to-day work. How do we take advantage of this moment and capitalize on each generation’s strengths?

The stakes are high. Successfully bringing together these disparate generations will lead to the entire workforce being engaged in the challenges facing underwriting today, from cyber risk to climate change to enhancing client service. Failure to do so will result in continued difficulties around workforce shortages and changing risks, to the detriment of clients. To help the industry navigate this shift, we’d like to share a three-step plan to bring these generations, with all their inherent capabilities, together to increase capacity and capabilities in underwriting.

The first step is to create partnership among the generations. Just imagine what this partnership could look like: A Gen Z or Millennial early-career underwriter gets to enable technology for their very experienced partner, while the partner teaches them how to apply everything they know about evaluating risk. This kind of partnership would even reduce key-person risk as the junior builds knowledge and relationships alongside their mentor. The success of this approach hinges on having the right collaboration tools, allowing older workers to choose their mentees and making the partnership collectively responsible for work.

See also: Overcoming the Talent Crisis in Underwriting

The second step is to engage team members in determining what the new work world looks like. Today’s underwriters have the opportunity to create a new paradigm, and each generation has its own experiences to add. By facilitating workshops or building teams dedicated to defining how technology will be used or how emerging trends can be incorporated into products, organizations can create powerful ideas for meeting the challenges of this unfamiliar world, as well as activating the team to help along the way.

The final step is straightforward, but crucial: investing heavily in training and development programs. In a PWC survey, about 29% of Baby Boomers and 44% of Gen Z insurance professionals felt they weren’t getting enough training on technology and digitalization from their employers. You don’t need to create these programs from scratch – there are great resources available that offer off-the-shelf training, and many software and data vendors are more than willing to help train your underwriters. The key to this kind of professional development is making it more than just a one-and-done program. Continuously investing in your team will provide capability development to help meet the challenges ahead in underwriting.

These three steps are each useful on their own, but they are exponentially more powerful when used in concert. This moment is an incredible opportunity for all of us working in talent. We have the chance to use a multi-generational workforce to pave the way for the future of underwriting, which will help the insurance industry define new ways of working and create products that better protect clients from the new risks they are facing. Just as important, this approach will meet younger generations’ expectation of advanced technology and service to the community, attracting new talent to this workforce.

This piece was originally published by Insurance Quantified.

Join our panel of industry experts for a dynamic discussion of ways to enhance your advisory role, reduce risk in your portfolio and address inflationary economic conditions with a greater understanding of the commercial properties you insure.

Learn how aerial imagery, data analytics, and property estimation tools bring a new level of accuracy and transparency to the commercial property policy lifecycle. Integrating these third-party solutions into the modern core system, insurers experience better accuracy, real-time data-informed decision-making, up-to-date values, and much more.

Watch now and learn what it takes to expand your technology ecosystem with data analytics and predictive modeling tools for better decisions about the properties you cover.

Watch On Demand

Meet the panelists:

John Dunn

Vice President – OneShield Software

John brings over 15 years of experience within the insurance technology industry, working with customers of all sizes from large insurers and MGAs to county mutuals. John is a NAMIC Merit Award recipient and has served on multiple industry association committees. Prior to the insurance industry, he worked in the nonprofit sector and continues to be active today serving on committees for the University of Nebraska at Omaha Foundation, Athletics and Alumni Association. John holds a bachelor’s degree in Communication from the University of Nebraska at Omaha.

Jeff Heine

Chief Revenue Officer – Betterview

Jeff leads the company’s Sales team and is responsible for the overall Revenue function. He has extensive experience in building B2B tech startup companies, including Guidewire Software, Adsensa (now Coupa Software), OutStart (now IBM), Endeca (now Oracle), CCC Information Services, and others. Before joining Betterview, Jeff led Sales, Customer Success, and Marketing at Groundspeed Analytics, helping establish rapid growth and helping raise a sizable round of funding. Jeff holds a BS from Bradley University and Business and Entrepreneurship Certification from Hecht and Associates.

Skip Coan

Vice President – e2Value

For over 35 years, Skip Coan has been involved with insurance-to-value and risk assessment as an insurance appraiser, field risk inspector, and company executive. Skip founded CIG Property Inspections in 1996, which was purchased by Reliable Reports in 2005. Skip was the executive vice president of Reliable Reports until 2018 when he joined e2Value as the senior vice president. Skip has presented at many carrier, agent, state, and NAMIC meetings during his career.

Stephanie Vasey

Product Manager, Commercial Lines & Inland Marine – AAIS

As a Product Manager for AAIS, Stephanie is responsible for the planning, design, and management of the commercial lines and inland marine products. Stephanie is committed to providing a modernized suite of insurance products to our members. Before joining AAIS in 2021, Stephanie had 15 years of experience working in commercial lines for insurance carriers.

Sponsored by ITL Partner: OneShield

The storms of life exist to teach valuable lessons – literally and figuratively. In the world of insurance, post-catastrophe analysis is crucial for making effective changes in a response plan to continue improving year over year.  

With insured losses around the world reaching $115 billion in 2022 due to natural catastrophes, and economic losses even higher at an estimated $268 billion, extreme weather wreaks havoc that calls for deeper analysis with a clearly planned strategic response. Individuals with varying perspectives and skill sets contribute to report on the comprehensive results of a particular storm season. We want to see the good and the bad; once we get these valuable insights, we can learn and adapt appropriately. 

The problem arises when these reports are reviewed, adjusted and documented within the Catastrophe Response Plan (CRP) only to be tucked away without any changes being implemented based on the findings. Opportunities to learn from the lessons in the analysis are lost, and before we know it, the next storm season is upon us, and the cycle continues.

As we know, the insurance industry is swift to draw attention to challenges and deficiencies in processes, yet the real issue is implementing effective change in a timely manner where the impacts are evident. Resistance to doing so only causes further complaints and frustrations; therefore, nothing changes and only marginal improvement is seen. It’s time to really dig into the CRPs to make pivots that matter and that lead to more effective planning and response.

Growth requires change, which can be difficult to accept in an industry that has been doing things a certain way for many years. While tremendous expertise comes with such a strong track record, there comes a time when change is necessary. The key to a smooth transition to new procedures is to focus on what matters – the people. When leaders focus on their people, change will always be a positive thing. The key to experiencing successful change is all about finding an effective way to communicate and manage the process, while, in parallel, learning from past mistakes.

Prioritize People in the Process of Change

When industries implement change, the people affected the most tend to be an afterthought. While this may not be intentional, many leaders are focused on strategy, outcomes and the bottom line. All of this is important, but the human element must never be lost when discussing system solutions, because it takes people to interact with such solutions. Consider the hurdles and difficulties your CAT team may face with any new process, and plan ahead for questions, concerns and frustrations that may arise. We must prepare for how to address hesitation and fears. This will work to our advantage and increase adoption rates. 

Consider policyholder communication. When working on your CRP, be sure to include the workflow for communication with this group. In doing this, it will be clear what will work and what won’t work. Adjustments must be made before rolling the CRP out to ease the growing pains of a new process. Reference vital policy information in an easy-to-understand method and list tips to enhance the communication between your team and policyholders. Rather than including these details on separate pages or folders, displaying them in one quick sheet can level up the customer experience and provide reassurance to policyholders in a time of change.

Implement Clear Communication Standards

Clear communication is key in a post-catastrophe response analysis. Instead of shelving problems, meet them head-on by thoroughly investigating complaints and escalations that arise during the process. In doing so, it is common to find that the root of the problem is communication, or lack thereof, that escalated the claim. In the insurance industry, we understand that keeping consumers and policyholders at the heart of communication is imperative; however, the unfortunate truth is that this is not always the case.

As we lean on tech solutions to engage with customers in the digital age, it is important to understand that flaws can still arise. To ensure that this does not happen, add details surrounding customer service touchpoints and expectations into your CRP. For instance, regardless of claim status, include a five- to seven-day touchpoint standard that includes the policyholder’s preferred method of communication. By sending personalized communications, you amplify the human element, and the customer experience is therefore elevated.

These people have likely endured trauma from a catastrophic event, and a little human empathy can go a long way.

See also: Key Learnings From Winter Storms

Leverage Data to Make It Your Most Powerful Asset

Next to your people, data leveraged properly is the most powerful force. Access to near-real-time data allows for the ability to provide world-class customer experiences – if it is leveraged correctly. Automation and insights are required to reach this level of success, as manual data mining is a time-consuming process, and we all know that in the event of a catastrophe, we are working against the clock. Keep in mind, it does take time on the front end to ensure that teams are equipped for better efficiency in the long run. We must move away from the narrative that “there’s simply no time” and invest the work in planning stages so things run smoothly when time is of the essence.

Within your CRP, include time for data mining, as this allows you to access crucial data on power outages, wind speeds, mandatory evacuations and severity of damage, as well as imagery to support the data – this can all be accessible within 24 to 48 hours. This will allow you to establish rules around making applicable payments toward ALE benefits, triaging claims to more effectively allocate adjuster resources and personalizing communications to policyholders on a situational basis.

Off-season is the ideal time to create, communicate and train on a strong CRP that pushes boundaries and opens the door to new possibilities for top-notch response during catastrophic events. Cultivate strategic partnerships into your plan to become an unparalleled force in the industry and prioritize people, communicate standards and leverage data for ultimate results. And, of course, always be prepared to pivot, as both the consumer and the weather always tend to evolve.

Over 90% of customers feel that the companies they buy from could improve their onboarding processes. The same study reveals that 63% of customers say that onboarding—the level of support they’re likely to receive post-sale—is an important consideration in whether they decide to purchase in the first place. While statistics like these may shock business leaders, they are a wake-up call that it’s never too late to innovate and optimize the onboarding experience. 

Many companies focus too much on the lead generation and conversion processes without thinking about what happens after closing the deal. This especially applies to insurance companies, whose complex onboarding operations can take two or more weeks. Today, experts recommend customers review their insurance plans every six to 12 months and make a switch every two years—but this can be challenging in the midst of verification, processing times and the endless heaps of paperwork being passed back and forth between agents and customers. Industry leaders must make changes to prioritize the customer experience and increase profitability in tandem.

Onboarding new insurance customers can be challenging, but building solid foundations for your clients to thrive is crucial. Providing a smooth and efficient onboarding experience for your customers will help you gain their trust and loyalty, and it sets the tone for a positive long-term relationship. Intelligent document processing (IDP) solutions are a great way to simplify the onboarding process internally, so your employees can focus on providing better support.

By optimizing the onboarding process, business leaders can ensure that customers feel valued and informed and are more likely to stay with your insurance company for years to come.

Streamline The Paper Trail 

When insurance companies onboard a new customer, they face an onslaught of documents. These documents come in different formats—PDF, paper, image, etc. There is no “standard” for how these documents are structured or formatted, and this means agents must manually compile emails, PDFs, physical copies and more into their data collection platforms, skimming each document to find the most important information amid numerous fields and disclosures. 

Lack of organization creates serious risk for insurance companies and the customers they serve. With agents manually reviewing and uploading documents, important customer information can slip through the cracks or be captured incorrectly. Manual document processing relies on human eyes to catch important data, identify errors and spot the signs of fraud. With insurance fraud costs in the U.S. reaching $308.6 billion annually, obviously manual document processing isn’t cutting it. 

Intelligent document processing (IDP) takes the burden of document management off of insurance agents. IDP can record information from every channel and standardize it seamlessly, creating a much-needed layer of centralization to the onboarding process. IDP solutions also improve security, with some options providing role-based access restrictions, complete audit trails and data encryption to ensure that customers’ data is kept safe from security breaches.

See also: Why Is Onboarding So Hard?

Embrace Digitization in Customer-Facing Processes

As an insurance company, you want your customer-facing processes to be as simple and streamlined as your internal operations. By digitizing the front end of your processes, your clients can fill out applications that will give insurance agents the information they need to create a personalized experience and provide them with the information they need regarding their new insurance coverage. 

From the customer’s perspective, self-service options make things faster, easier and better—and, according to HubSpot, 77% of customers say they view brands more positively if they provide self-service options for customers looking for support. From the insurance agent’s perspective, it is easier to retain customers and boost loyalty through these digital transformations, thus improving the revenue cycle. 

Digitization can go beyond the early application stages. You can empower customers to navigate your policies independently via your own online portal or mobile app. Include tips, tricks and tutorials to help guide them through the onboarding process without the need for time-consuming email threads or frustrating call-center wait times.

Employ Automation 

Automation is a great way to enhance customer service and save agents' and clients’ time and money throughout onboarding. At my company, ibml, we pride ourselves on delivering solutions that automate capturing, classifying, validating and exporting customer information. 

Research shows that 41% of consumers are likely to change their insurers due to a lack of digital capabilities. If you want to strengthen the relationships between your company and your customers, transforming your onboarding processes for the digital era is the first step. I urge all insurance companies to show their policyholders that they are ready to support the customer experience before, during and after they convert. Just like any other partnership, these relationships are a two-way street, and your onboarding process is the first impression to creating a valuable relationship that lasts.

Insurance companies around the globe are facing one of their biggest challenges to date: a workforce shortage, magnified by the Baby Boomer generation’s retirement, the migration of skilled labor during the Great Resignation and shrinking pools of aspiring insurance professionals among Millennials and Generation Z. 

According to the U.S. Bureau of Labor Statistics and the National Association of Mutual Insurance Companies, 50% of the current insurance workforce will retire in the next 15 years. In many cases, the highly nuanced knowledge these professionals have developed over the years will retire with them. This “retirement brain drain” is exacerbated by supervisors finding themselves increasingly short on time because they need to do more with fewer resources. Due to the considerable amount of time it takes to manage key tasks and processes, they have little time to train new employees, making this challenge more acute. 

So, what can you do to safeguard your organization’s most valuable data, including the information that only lives in the heads of your most seasoned professionals? Hands-on training and job shadowing are incredibly important and have been used for decades to train new employees. However, they can only do so much to ensure relevant industry knowledge is preserved and passed on to the next generation of workers, especially given the high retirement rate of many veteran insurers. 

To combat this growing problem, many insurers are turning to AI technology to supplement their current employee education and institutional knowledge management strategies. Specifically, they are training AI models with terabytes of data from industry data lakes along with their own internal datasets. This enables AI models to learn from a wide variety of scenarios insurers might encounter when underwriting or resolving claims. Many AI solutions now even ingest and learn from unstructured data—like the notes adjusters have made over the years about specific claims.  

AI can serve as a virtual digital assistant, automatically scanning all aspects of claims data and updates to identify attributes or events that may affect claims’ cost and duration. Unlike a human, the digital assistant can work 24x7, read and understand millions of policies and claims, has total recall and never gets tired. It can detect a myriad of factors such as updated notes, comorbidities, psychosocial factors, recent medical tests and diagnoses that may affect a claim’s severity. Armed with this insight, the digital assistant can triage and prioritize claims, reducing claims cycle times and losses. It directs the adjuster to what needs the most attention and when to act to ensure maximum claimant satisfaction and profitability. Similarly, on the underwriting side, a virtual digital assistant can examine a policy and use its learnings from millions of other policies and third-party data to give underwriters deeper insight into policy risks to help them price more accurately.  

The virtual digital assistant can give both underwriters and adjusters more confidence in making decisions. It provides valuable guardrails for the new underwriter or adjuster, and, for the experienced professional, AI amplifies what they already know and do, enabling them to accomplish more at a higher quality level with less work and time. 

See also: Predictive Modeling’s New Mantra

AI Upskills the Insurance Industry

It’s encouraging and frankly exciting to see the 500-year-old insurance industry starting to lean into AI and other supportive technologies the same way they embraced digital transformation. We are now seeing AI grow in its adoption exponentially in both underwriting and claims management. 

In a recent webinar, leaders from both MEMIC and Builders Mutual Insurance shared how their companies have benefited from using AI technology to upskill and knowledge-share with newer employees. Greg Jamison, senior vice president of underwriting at MEMIC, explained how AI models have helped the underwriting side of the business build dashboards to better understand and quantify underwriting risks. He remarked, “We leverage not only our own internal data but Gradient AI’s [industry data lake].” Ken Bunn, vice president of claims at Builders Mutual Insurance, found that AI enables new adjusters to benefit from models that have learned from millions of past claims and “provides guardrails for our newer folks. For example, new adjusters can learn from the predictions that the models make to help them better assess a claim’s severity and gain insight into how to properly reserve a specific type of claim."

See also: Don’t Get Left Behind

Using AI Models to Upskill Insurance Professionals

AI technology offers an increase of depth of training and knowledge-sharing beyond because it leverages expanded access to datasets. As more companies make AI part of their business operations, here’s what I expect they’ll find:

• AI leverages institutional data to mitigate lack of experience. AI captures institutional knowledge, learning from past claim decisions and resolutions, allowing new insurers to perform at a level commensurate with their more experienced co-workers.  
• Less data gets lost in the shuffle. Traditional job shadowing can be time-consuming, prone to misunderstanding and data loss. When trainees leverage AI unified databases, they have access to a single source of truth, resulting in more accurate, consistent and profitable decisions. 
• Industry data lakes can help insurers grow in new markets. When AI insurance models are trained using industry data lakes containing multiple insurers, geographies and industry segments, insurers can expand into new industries and geographies with confidence. By leveraging models trained on actual loss histories in new markets, insurers can quote new policies and manage claims more accurately.  
• AI training tools create a better working environment for younger generations. The insurance industry needs to make the industry more interesting and attractive to younger generations. AI technology has the potential to reform the insurance industry’s staid reputation and position it as a technology leader, and help attract and retain younger staff.