Tag Archives: sma

Standing Strong in the Moment of Truth

In a blink of an eye, the world – society and all of humanity – are being stressed at every level imaginable due to the rapid spread of COVID-19. No one could ever have imagined or planned what this could really be like … including our industry. But since the beginnings of insurance, we have had a history of weathering all storms, all types of disasters and even pandemics. And I am confident that we will weather this one, as well. Insurance is a financially strong, resilient industry. We serve as a safety net for society, mitigating risks for all types of disasters – man-made or natural. This is who we are and what we do. And this is our moment of truth.

In the midst of all of this upheaval, we have a unique opportunity to do what is right by being a strong, dependable force for good. Our world – our employees, customers, partners and everyone in our ecosystem and beyond – need our strength and resilience, right now, tomorrow and every day moving forward. 

On the other side of this pandemic wave, the core of who we are as an industry will remain the same, but every aspect of what and how could be altered by this experience. The rules of engagement are changing, even as I write this blog. And that is okay. Every disaster presents new clarity and new experiences that create opportunities. 

At SMA, we are confident that new ideas, new approaches and new ways to accelerate the connections with our employees, customers, partners and everyone in our ecosystem will happen by adjusting and advancing digital transformation strategies and plans. 

See also: The Best Tools for Disaster Preparation  

Just remember, we are all part of this amazing insurance industry, and we are all standing strong. We will continue to stay present in this moment of truth. And we will do our absolute best to help you, as well. Just stay safe and healthy. 

Paper Checks: Finally Going Away?

Insurers are becoming more digitally based, data-driven organizations that are investing in the customer experience to address the new expectations of today’s consumer. At the same time, there are always some old habits that die hard – habits that need to change but somehow remain the same.

Today’s consumer is doing more and more online or on a smartphone every day. We pay for coffee with an app; we pay with our eWallet at the grocery store; we transfer money between our bank accounts on our smartphones. With services like Venmo and PayPal, we are able to pay friends and family electronically. Consumers have come to expect this ease and convenience in every area of their lives.

When it comes to insurance, we are seeing things change. Insurers are creating an easy and efficient process for their customers from quote to premium payment to claims intake. So, the payment process has certainly transformed in insurance… but only to a point. The next step in the transformation needs to come at the moment that really matters for an insured – the claim payment.

Paper checks are still substantially used by the industry to provide outbound payments in the claims process. Checks are one of the most expensive forms of payment and create a delay in accessing the funds. All parties involved with the payment process – claimants, third parties, mortgagees and lienholders – are looking for a change in the traditional check process. It is easy to imagine how a positive experience could quickly be forgotten if a customer has to wait for a paper check.

See also: Some Things Are Too Important for Paper  

Insurers must take the next steps to meet growing customer expectations. The good news is that as fast as customer expectations are changing, new payment technologies are becoming available. While there will be challenges to address to make it happen, insurers may soon be able to put the paper check to rest.

Strategy Meets Action’s newest report, The Payment World Explodes: The Need for Digital Customer Experiences Is Driving Payment Innovationoffers insights into the state of payments in the industry today and the direction that payments are headed in the future. To learn more or to purchase the report, visit this website.

Data Prefill: Now You See It, Now You Don’t

At children’s birthday parties, a guest magician may utter the well-worn phrase, “now you see it, now you don’t” – and a bouquet of flowers disappears. That trick, a heartwarming memory for many, also relates to the vast quantity of questions on an application for commercial lines insurance.

It’s daunting for a business owner to come face to face with the numerous blanks on an insurance application. Much of the required information is not immediately at hand – or not understood at all. For distributors, the familiarity with the content is certainly there – at least for seasoned personnel. But the time it takes to fill empty boxes keeps them away from more useful interactions with customers. On the other side of the transaction, company underwriters need information to price the risk. For a very long time, the industry has been at a stalemate.

A conundrum? Not any longer.

See also: 3 Keys to Selecting the Right Platform  

Enter data prefill and new data sources. Data prefill certainly isn’t new – personal lines insurers have employed it for some time. But, the impetus to use the capabilities in commercial lines has not been present until now. Business owners require a simpler application process, and distributors need to be freed from clerical tasks. Undertaking a data prefill initiative may be a simple decision for some organizations – but for others it may be a challenge. In either instance, SMA has a five-step analysis process (Why, Who, How, Where and What) that can guide any organization looking at data prefill. It’s important to approach the initiative with a measured assessment to ensure a successful outcome, even if everyone is already on board with data prefill.

Given the press that organizations such as Cake Insure and Pie Insurance have received, it might be easy to assume that data prefill is all about small business and workers’ compensation. Clearly, there are significant opportunities in the small business arena to condense insurance applications down to three, four or five pieces of data. Evan Greenberg, CEO of Chubb, has declared that the current 30 questions in small business applications will be condensed to around seven within 18 months. However, it would be a mistake to assume that data prefill is just about one commercial lines segment.

In fact, insurers covering all but the most complex jumbo commercial lines have an amazing opportunity to use the same data integration techniques for data prefill to automatically integrate data into more complex lines of business – to improve data accuracy and thus drive profitability. Regardless of the line of business or size of the business insured, augmenting application data with new, emerging data can support underwriters in their decision making. And, perhaps, it can eliminate the need to obtain information from business owners and distributors and promote a much greater degree of accuracy. SMA’s recently released report, Transformation in Commercial Lines: The Five Steps for Data Prefill, provides a view of this.

See also: The Problems With Blockchain, Big Data 

This brings us back to “now you see it, now you don’t” and the disappearing questions on commercial lines applications. Having spent a long time as an underwriter, I recognize that it is unsettling to think about losing the data elements that one has relied on to make decisions. However, with data prefill, that data can be found and used in many ways: eliminating questions on applications for small businesses and prefilling internal systems for more accurate decisions on complex lines. No one will be deprived of data – the source will just be different – an insurance magician’s answer to several challenges!

Quest for the Holy Grail in Workers’ Comp

Quotes from only five data points, or even fewer? Name your number, and you can find an insurer looking to transform the sales experience to match. We have seen a great deal of this momentum in personal lines with increasing attention in small commercial lines. And the line of business delivering today is workers’ comp!

Insurers writing workers’ comp – including insurtech startups – are innovating in many areas, including quoting, servicing, claims and the overall customer experience. There is high potential for emerging technologies, including AI and wearable devices, to enable these advancements and tremendous benefits to be gained from external data sources as well as the untapped data already within an insurer’s systems. Together, these circumstances have created fertile ground for innovation.

Both established and greenfield insurers are taking advantage of the possibilities that advanced technologies bring to the workers’ comp sector. This year’s SMA Innovation in Action Awards gave us two excellent examples of how both types of companies are approaching these new opportunities – in the digital MGAs Cake Insure, which was incubated by Pinnacol Assurance, and Pie Insurance, a greenfield venture. They demonstrate two different approaches to the same goal: leveraging new technologies and external data to create a seamless digital experience for customers.

See also: 3-Step Approach to Big Data Analytics  

Pinnacol Assurance is a workers’ comp insurer that is more than 100 years old. They wanted to reinvent the purchasing experience for workers’ comp by emphasizing digital and leveraging new technologies such as AI to condense the entire process into five minutes or less. Cake Insure, a digital MGA, is the result.

Cake’s online platform gives consumers a responsive, mobile-friendly experience that requires only a few data points to generate a quote. An AI-driven policy classification engine uses natural language processing and machine learning to enable straight-through processing for more than 90% of new policies. This technology enables Cake customers to simply enter a description of their business in their own words to get a quote, with no industry jargon or class codes required. Certificates of insurance can be generated and shared immediately via the Cake client portal or email. Cake’s success demonstrates how an established insurance company can embrace greenfield thinking and reinvent the customer experience.

Greenfield insurers and MGAs are also pursuing the transformational possibilities of workers’ comp. Pie Insurance is a full-stack digital MGA for Sirius Group that set out to change the workers’ comp market for small businesses, an underserved and often overcharged business segment.

Pie uses predictive analytics and high-quality data sets in real time to give small business owners a seamless, mobile-friendly way to find the coverage they need at the right price. According to Pie’s proprietary data, 80% of small businesses overpay for workers’ comp, often by as much as 30%. The company provides consumers with a detailed breakdown of the coverage and pricing that is appropriate to their risk and offers an online quoting experience that is as easy as getting an online quote for personal lines insurance. The savvy use of third-party data combined with predictive analytics gives Pie the ability to quote a new workers’ comp policy in minutes.

See also: Predictive Analytics: Now You See It….  

These companies are simply two examples of how the workers’ comp market is transforming. Both established and greenfield insurers and MGAs are making headway in this area. We can expect further changes to come as insurers find even more ways to bring new technologies to bear on the customer experience. So, stay tuned.

For more information on the SMA Innovation in Action Awards program and this year’s winners, please click here.

Emerging Technology in Personal Lines

Personal lines insurers are investigating emerging technologies and developing strategies and plans related to individual new technologies. Technology is advancing so rapidly that it is even difficult to define what should be considered an emerging technology. For the past several years, SMA has been tracking 13 technologies that many consider to be emerging. These include technologies such as autonomous vehicles, AI, wearables and the Internet of Things. In our recent research, five of these technologies have emerged as “power players” for personal lines insurers, based on the level of insurer activity and the potential for transformation. The specific plans by insurers for these and other technologies are detailed in the SMA report, Emerging Tech in Personal Lines: Broad Implications, Significant Activity.

See also: 2018’s Top Projects in Personal Lines  

Some big themes for emerging tech in personal lines stand out:

  • Artificial Intelligence dominates. AI is often a misunderstood and misused term. However, when specific technologies that are part of the AI family are evaluated, much activity is underway – by insurers, insurtech startups and mature tech vendors. Chatbots, robotic process automation (RPA), machine learning, natural language processing (NLP) and others are the subjects of many strategies, pilots and implementations.
  • The Autonomous Vehicle frenzy is cooling.There is still an acute awareness of the potential of autonomous vehicles to dramatically alter the private passenger auto insurance market. But there is also the realization that, despite the hype, the transition is likely to be a long one, and the big implications for insurers are probably 10 or more years out.
  • The IoT is going mainstream. Discussions continue about the transformational potential of the IoT for all lines of business. But rather than just talking about the possibilities, there is now a great deal of partnering, piloting and live implementation underway. We are still in the early stages of incorporating the IoT into strategies and insurance products and services, but their use is becoming more widespread every day.
  • UI Options are dramatically expanding. The many new ways to interact with prospects, policyholders, agents, claimants and others should now be considered in omni-channel plans. Messaging platforms, voice, chatbots and more are becoming preferred ways to communicate for certain customer segments.

See also: Insurtech and Personal Lines  

Certainly, other trends and much emerging tech activity are happening outside these main themes. Wearables, new payment technologies, drones, blockchain and other technologies are being incorporated into strategies, pilots and investment plans. The next few years promise to be quite exciting as advancing technologies spark more innovation in the industry.