3 steps insurers must take to successfully introduce technology to remain competitive, reduce costs and meet customer expectations
You may believe digital provides the opportunity to positively disrupt the life, health and protection insurance industry for the next generation. Or, perhaps you view digital as a challenging force which threatens to render the sector redundant. Whatever your views, over the next ten years, digital capabilities will transform the claims process.
Though the industry has a reputation for resisting change, a refusal to embrace new (albeit complex) technology may prove disastrous as customer expectations continue to rise and InsurTechs disrupt the market. For the life, health and protection insurance sectors, claims are playing catch up. Technologies that the sector hasn’t yet embraced are already in use to support new business, customer experience and underwriting in other insurance verticals.
We understand the imperative to remain competitive, reduce costs and meet customer expectations – so here are 3 steps insurers must take to successfully introduce technology.
1. Put the right governance framework in place
An effective IT governance framework improves the management of IT and drives value from investment in technology. It enables insurers to manage their IT risks effectively and ensures the alignment of IT with overall business objectives. It also provides parameters for identifying opportunities where technology can benefit the business and developing and managing the progression of these automation projects.
For next-generation claims, the governance framework will allow for the successful integration of legacy technology with new digital initiatives. Having identified what IT assets you have and what their benefits are, you can introduce new technologies alongside your current setup. For example, in health insurance, connected devices can provide data which AI and machine learning can use to calculate risk and produce predictive price models.
However, it is important to balance the need to have a structured approach in delivering IT change initiatives with the ambition of creating an environment where innovation can flourish. Breaking digital programmes into manageable sections, with feedback loops after each stage. can ensure both the delivery imperatives are meet whilst still allowing the digital journey to adapt to changing business and customer needs.
2. Focus on risk mitigation and improving customer outcomes
Technologies being deployed in life, health and protection insurance are moving the sectors away from traditional claims handling towards a preventative approach. For example, health and life insurers like Vitality offer rewards and premium reductions for maintaining a healthy lifestyle. This reduces the risk of customers claiming on their policies. Using new technology, they are incentivising people to change their habits and behaviour. Health trackers and wearables are also used to track activity and alert people to risks before they happen.
By focussing on reducing claims, you can change your relationship with your customers from one of post-claim interaction to partners in loss prevention.
3. Automate claims rules and processes
Improving the customer journey by digitising the claims process means looking at it from a customer viewpoint rather than what works for your business. By redefining your back-office systems and processes, you can become more responsive to customer requirements and speed up the claims process. AI and machine learning can automate repetitive mundane tasks and standardise manual processes. Online self-service portals allow customers to report claims, submit documentation and receive updates on the progress of their claims.
Quick resolution of claims has to be the result of any digital intervention for life, health and protection insurers. Customers expect fast service and claims settlement is no exception.
What challenges still need to be overcome?
The life, health and protection insurance sectors are faced with trying to create a claims customer journey which satisfies two disparate sets of customers. On the one hand, we have Gen X and baby boomers living longer thanks to the advances in medical sciences. These customers don't all favour digital interaction as much as the other customer set, millennials and post-millennials, who have much stronger digital requirements. Real-time interaction, self-service portals and multi-channel communication options are the norm for these customers. You will have to balance the needs of both groups and provide a service which satisfies both.
For some insurers, legacy technology remains a barrier to introducing new digital initiatives. Unsurprisingly, there are concerns about the amount of investment already made in systems and infrastructure. Added to this are perceived complications around how to integrate the new with the old. Leveraging cloud technology can help you build a cohesive framework which combines legacy and new technologies. It can also provide costs savings and improve the processing power of your systems.
Using technology to streamline the claims process allows you to meet customer expectations of constant connection and fast resolution of issues with limited human interaction. To find out more about how technology can improve operational efficiency and transform the customer experience in the life, health and protection sector, join us at TINtech Life & Health. The conference takes place on 3rd December 2019 at Etc., Fenchurch Street. Contact us now to book your place.