By 2025, the sum of the world’s data is expected to swell to more than five times its current size. Leading organizations will need to harness this data to launch new business models, create more customized customer experiences, and optimize operations to drive down costs [1]. Hence, the soaring need for intelligent analytics.

But, many insurance companies are still on traditional on-premise solutions that no longer cut it and slow down or prevent innovation driven by data insights. Due to the lack of a digital data journey, it is the customers who suffer.

There are many drivers in the current landscape that insurance companies need to consider

Changing customer expectations

Customers expect seamless, custom experiences. Loyalty is increasingly difficult to maintain.

Mounting risks and regulatory burdens

Market & operational risks are increasing alongside regional volatility and continued low interest rates. Meeting compliance demands continue to be a heavy burden.

Legacy IT and high costs

Inflexible, expensive legacy infrastructure prevents rapid change. Data remains in silos and is difficult to use effectively.

New technology and innovations

Big data, smart analytics, ML and AI offer new opportunities. But firms often need guidance on where to start and how to advance.

A majority of insurers are embracing the concept of “digitization” for data and intelligence analytics. But, there is still a lot to be done for digitizing the end-to-end operations of insurance companies to offer seamless customer experiences. Few challenges include,

  • Parts of the customer journey are automated but there is still a high amount of human effort
  • Most insurers are unable to leverage real-time data to offer dynamic products that reflect the changing circumstances
  • Inability to shift the culture to leverage cloud for increasing demands
Six strategic business recommendations to meet the current and future needs of the insurance industry

These recommendations will help you to customize your products and offerings, rapidly deploy new products, and predict and manage risk with greater accuracy — all with data-backed intelligence.

1. Streamline the operations to win on price

You can automate processes and perform next-generation underwriting by performing Natural Language Processing and leveraging advanced decision trees. Actuaries and Actuary platforms are trying to make this shift happen by expanding their datasets and consuming third-party data.

The pain points this recommendation addresses

  • Manual underwriting
  • Non-standard cases
  • High cost and high risk of backtesting/model validation

Benefits of the recommendation

  • Improved underwriting, pricing efficiency, and accuracy
  • Increased capital efficiency through better risk modeling and real-time risk monitoring

The result

You can drive efficiencies in underwriting and risk monitoring to give yourself a competitive edge, particularly in commoditized markets.

2. Develop a differentiated claims experience

You can speed up claims processing, which is a major challenge, with image recognition and fraud detection. Some companies are adopting industry claims platforms like Majesco is now running on IBM cloud, Guidewire on AWS, Duck Creek, and many others. Still, others are trying to consolidate three or more global claims systems and struggling to bring all data together. It is advised to aggregate the data across platforms, build claims processing intelligence and routing, and identify exceptions and detect fraud.

Document understanding is an excellent way to unlock the unstructured information in the claims process. The goal is to impact claims processing times, cost, and efficiencies.

The pain points this recommendation addresses

  • Slow manual review of complex documents and higher cost investments
  • Longer wait times leading to poor customer experience
  • Backtesting/model validation’s high cost and high risk

Benefits of the recommendation

  • Increased adjudicator efficiency with triage and grade claims
  • Instant process claims
  • Reduced fraud using new tools and new data

The result

You can evaluate claims and create workflows that are more accurate and responsive to your customer needs.

3. Create add on services quickly to complement other offerings (Cross Sell!)

You can real-time monitor clients to advise them on risk-exposure strategies to lower risk. There is a need to launch complementary services to existing products, make successful solutions available in new geographies, and relaunch a solution to a different audience. Many insurers are looking to add complementary or new services in global markets because of new audiences and/or new geographies.

The pain points this recommendation addresses

  • Lack of real-world/real-time data for both customer and company
  • Increased premiums because of less effective mitigation strategies
  • Customer inability to cover their risk exposure

Benefits of the recommendation

  • You can provide predictive analytics to clients that help them better understand their risk
  • You can advise clients on prevention strategies to lower their risk exposures

The result

Make use of your internal data and provide unique service offerings that complement your product shelves.

4. Insure against new types of risk in new ways

You can try alternative data and dynamic behavioral pricing to develop unique insurance products that cover new risk categories. You can improve underwriting to be more predictive than historical and offer custom or modular policies, and adopt big data solutions, ML models, automation, simulation, and reporting for customer enablement via training.

The pain points this recommendation addresses

  • It removes reliance on ‘The way it has always been done’ — the historical underwriting
  • It eases the restrictions of rigid policies and payments

Benefits of the recommendation

  • You can use proxy data to insure new risk categories
  • You can develop modularized policies
  • You can introduce new pricing and payment models

The result

You can improve and expand the current portfolio of services and customers.

5.Improve and expand distribution strategies

You can improve sales efficiency and expand into new markets using predictive analytics and new data sources. Also, you can increase sales and distribution by limiting the labor and cost of new customer acquisition, and automate claims processing and approvals.

The pain points this recommendation addresses

  • Labor and cost of lead generation and attrition
  • Buying processes disconnected from assets they protect
  • Upfront limits in growth in emerging markets

Benefits of the recommendation

  • Increased efficiency and capabilities of sales agents
  • Improved efficiency and scale to enter new markets

The result

You can unlock new data sources for intelligent decision making.

6. Connect sales & marketing data silos

You need to better understand and use all of your on-prem, third-party, call center, CRM, and social data. You can start by connecting a few or all of the following data silos:

  • Billing and purchases
  • Distribution
  • Claims
  • Policy
  • Social media
  • Web and app analytics
  • Email management
  • Content marketing
  • CRM systems
  • Ad campaigns
  • Customer service
  • Third-party external data

The pain points this recommendation addresses

  • Disconnect after customers make a purchase
  • Irrelevant or delayed information reaching the customers

Benefits of the recommendation

  • Micro-moments with customers captured
  • Intelligent customer segmentation and outreach
  • Dip in attrition with intelligent signals

The result

You can know your customers and reduce attrition, increase sales with cross/up-sell channels.

Next steps

Evaluate tech for performance, scale, and price with your tech partner or digital advisor. Here is an outline of how you can get started with your digital advisor:

Cloud Discovery

Hold a discovery workshop with stakeholders to evaluate the possibilities of Cloud in the insurance space. Ask for a custom comparative study of major players (AWS, Azure, Google Cloud).

Technical Assessment

Your tech partner can conduct a high-level assessment of the current infrastructure and the tech landscape, and tools available to enable you to solve for your top business challenges.

Stakeholder Interviews

Your partner and you can co-steer stakeholder interviews within your organization — understand goals, identify challenges, and gaps in the current environment.

Design Workshop

Your tech partner may facilitate a design workshop to collaboratively establish the new architecture for prioritized challenges.

Recommendation Brief

With your partner, access customized executive report(s) on findings and get recommendations and next steps to begin.

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[1] IDC White Paper, sponsored by Seagate, “The Digitization of the World from Edge to Core”