April 13, 2020
The ‘Race to Zero’ in Insurance SaaS
by Jeff Wargin
The race to zero means streamlining the end user experience to ask less and less information when it comes time to file and process claims.
There has been a radical change taking place in insurance over the past few years. It revolves around the race to zero – or, the concept of streamlining the end user experience to ask less and less information when it comes time to file and process claims.
Regardless of what stage of the digital transformation journey the industry has been in, meeting and exceeding customer expectations has always been a priority – as has been the journey to find smarter ways to do business. Without either of these things, not many organizations would be successful.
Asking less and less from consumers is not necessarily a new concept – but that doesn’t mean that it isn’t more important than ever in 2020.
In 2020, not only is the race to zero more possible than ever (thanks to improvements in software-as-a-service (SaaS), digital technologies and data ecosystems), it’s becoming an expectation.
This is largely being driven by two things: new generations of digitally native consumers who are used to seamless data integrations and information access across every aspect of their lives; and organizations looking for ways to evolve their processes to work smarter and more efficiently to meet these expectations while also remaining profitable.
Whether every line of insurance or business type can get to these hypothetical zero inputs is irrelevant. What’s important is that the new world of SaaS-based solutions, and a transformation to data-driven ecosystems living in the cloud, are changing the insurance game at speeds we’ve not experienced before.
Whatever that limit is, here are a few ways that any organization can realize its potential:
Enable Continuing Improvements With SaaS
It was really only five years ago that we started seeing early adopters embrace SaaS – and only in the last year or so that there’s been a drastic change wherein the majority are heading toward that model. One of the chief reasons for this is the configurability and malleability of new SaaS systems compared with legacy systems.
Insurance is driven by data; however, in the past, as insurers would get new data feeds, it was difficult to take advantage of them in a timely fashion – because existing systems and processes were so locked in. Now, with modern SaaS systems, it’s much easier to make changes to processes, workflows and rules, so that as new types of data and analytics tools become available you can use them to your advantage – and to the advantage of insureds.
See also: Digital Darwinism: Time to Move Faster
Avoid Limiting the Value of New Data
Data is golden – but pouring new data into an old process often doesn’t get you where you need to go or get your processes any closer to the hypothetical zero. Instead, we must be thinking about new data sets in new ways and imagining how they can actually affect or drive a new process.
This is no easy feat, and what we’ve seen some carriers do (innovate while understanding the legacy processes within existing organizations) is start companies or build new insurance products. This freedom to innovate, while keeping data outside existing core systems, means the data’s value isn’t limited in a legacy environment where it’s easy to get bogged down.
This sort of innovation remains one of the more interesting recent developments – and will continue to evolve as insurers look to create data-driven products that change the way insureds engage with insurers. The market has reacted to enable this evolution with highly customizable, out-of-the-box SaaS solutions built around configurability and speed.
When it comes to meeting this hypothetical zero in a new data-driven world, we must also consider IT processes – and the agility that’s required to move to market at speed. Things used to take a long time (new products released on an annual or multi-year basis, for example). However, with new, low-code core systems, insurers can be very agile about when and how products are released – and the types of data sources or third-party integrations that can be leveraged in a way that makes a competitive difference in the market.
This can be a challenge for IT departments that aren’t used to working in this fashion, so the mindset truly needs to shift toward “agility.” This goes for updates too. If there are opportunities to prefill through partnerships and integrations, or feed in new data sets, insurers leveraging new systems and processes can easily modify an app or existing product.
Use Data to Make Better Decisions
We’ve talked a lot about how to be agile and think about new ways to access data and information – and reimagine your processes around it. But, once you have that information, there’s another half of the equation you must consider – can I make better decisions and use the right information and tools, such as analytics or scores, to route things appropriately and for easy cases?
From the front end, if I’m using data prefill and getting better data that I might have from older forms, for example, how can this contribute to making better, more informed and faster decisions in the insurance process? Taking this a step further, during times of strain or circumstances where losses pile up, can my organization find opportunities to use data and prefill to offer straight-through processing and enable our workforce to focus its efforts on the more difficult and nuanced cases that require a very hands-on, tailored approach?
If the outcome isn’t better decisions, the value of more data often isn’t realized.
Think Open yet Secure
A final point worth noting is the transition to a more open, API-based ecosystem in insurance. Traditionally, the industry has been highly closed off, but we’re seeing more and more negotiations around how to access and build around APIs. With this transition to “openness” (along with a shift in mindset for the entire industry), innovation can take strides, and the race to zero for both insureds and insurers becomes more of a reality.
The core value of insurance will still be worth its weight in gold, but imagine the types of solutions we can develop with an abundance of new information, new processes and new technologies in place.
For anyone in the insurance industry reading this, how do you not get excited about the possibilities in front of us? A new world of opportunity awaits in the race to zero – both in terms of how we reimagine products and policies for consumers and how we operate and process internally.
For those of you not involved in this data-driven insurance technology ecosystem – what are you waiting for?