Transforming the Insurance Operating Model Using Technology


Transforming the Insurance Operating Model Using Technology

5 ways to leverage technology to improve the operating model

Technology is now at the heart of every insurance organisation and has become the number one differentiator and driver of competitive advantage. It provides an opportunity to meet customer service level expectations in new and innovative ways, control expenses and reduce costs. As the insurance market has become increasingly competitive, the introduction and implementation of customer-centric technology to create the right operating model has become critical to a profitable strategy.

Some insurers are concentrating their efforts on using technology for process automation rather than for transformational or disruptive change. However, to satisfy the modern consumer, whose expectations have been shaped by digital experiences in other sectors, and to encourage growth, more radical action is needed.

So, how can an insurance company move forward and leverage new technology to its full advantage?

1. Align IT with business strategy

Successful deployment and embedding of new digital initiatives depend on aligning an IT department with overall company strategy. They should understand strategic priorities and goals and know what they and other departments are accountable for. The business needs to understand what technology is being used and its capabilities and take this into account when developing future business strategy.

More integration with the business and moving away from a silo mentality will improve communication and increase the chances of transformational digital change being successful. For example, when the business understands how a new IT system aligns with business goals and the value it will add, successful implementation and user acceptance increases substantially. 

TINtech driving transformative change across the insuance sector

2. Enhance the customer journey

Thanks to breakthroughs in technology, customers' expectations have grown exponentially. AI, mobile, cloud and social media are all helping companies deliver a personalised, seamless and instant service. In insurance, it has never been easier to switch provider, so understanding customer needs and exceeding expectations is essential to retain and bring in business.

There are multiple touch points along the customer journey where technology can influence the service offered. At the acquisition stage, customer segmentation helps a company target customers with relevant messages. During the lifetime of a policy, AI is used in customer services, for example, to automate handling of simpler queries to let call centre staff deal with more complex issues. Online, self-service portals which deal with changes to policies are AI driven, as are virtual assistants. These tools can help an insurer develop a picture of the entire customer journey and identify where improvements will make the most significant impact.

3. Improve the claims process

Claims is the area where technology can make the most significant difference. The industry recognises that enhancing the claims journey using technology is a high priority.

In a survey carried out by TIN for its Digital Claims 2019 conference, 88% of respondents said they are looking to automate their claims process and 93% thought technology would help overcome the main challenges faced within claims.

Automation can improve the entire claims process. Online claim notification and communicating with customers through digital channels enhances efficiency and satisfies growing customer preferences for non-verbal communication. Fraud detection technology, for example, voice analysis or fraudulent claim modelling software can reduce costs. Electronic submission of photographic and video evidence can speed up claims settlements, and electronic payment of claims enhances the customer experience.

4. Legacy technology - replacement or integration with new technologies

One of the enduring conundrums insurers face when making decisions about introducing new technology is whether to completely replace their legacy technology or add new systems around the current one. The legacy system may still meet requirements and add value to the business. The financial investment in new technology may be too high. Alternatively, the change may impact productivity and revenue.

Although valid concerns, they need not be a barrier to introducing the latest technology into a business. Solutions such as iPaaS (Integration Platform as a Service) allow you to amalgamate new and legacy systems. iPaaS acts as a communication channel between multiple IT systems, allowing integration of software and data sharing between departments.

TINtech driving transformative change across the insuance sector

5. Enable innovation in operations

A business can enable innovation using technology in several ways, such as encouraging collaboration by providing staff with multi-user communication channels like instant messaging. Or using a work collaboration platform such as Trello, which is a productivity platform as well as a communication tool.

Another option is introducing idea management software, where employees can submit their ideas or business proposals, receive feedback and track progress if the business decides to implement them.

External feedback from customers can also lead to innovation. Customer feedback capture mechanisms such as customer satisfaction surveys or customer contact forms can provide valuable information on how to improve a product or service. One global insurer, Allianz, has used customer experience data to change their entire culture and digital strategy. Understanding their customers’ needs defines what digital tools they will employ to enhance the customer journey.

Leveraging the power of digital tools and building a strategy around technology will provide strong foundations for future growth. Taking an enterprise-wide approach, embracing technology and becoming a genuinely digital firm will give an insurance company a competitive advantage in an increasingly competitive and crowded market.

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Authored by myComply Co-Founder & Chief Operating Officer Neil Reddekopp and AXA XL Senior Construction Risk Engineer James Stengel