4 steps for insurance professionals to think more innovatively
Insurers need to rethink their approach to innovation. The speed of change in technology, an evolving competitive landscape, increased customer expectations, and the new reality of a permanent hybrid workforce have challenged insurers across all functions. Long-term projects now need to transition to shorter, more targeted initiatives that will enable them to stay resilient by adapting to change more quickly, whether the change is caused by forces beyond their control, like the pandemic, or initiated internally, to launch new products or distribution channels.
And for leadership, the decision to green light an intelligent automation project can be fraught, especially when their reputation and career can hinge on its success. Many learned the hard way that deployment doesn’t equal success; it’s all about the bottom-line results.
Yet, as hard as it is for organizations to innovate, forward-thinking insurers are doing just that; they’re transforming their core foundations to improve their business processes and deliver value in the ways that matter most – increasing productivity, improving efficiency, and ultimately driving better and faster decisions for customers that will ultimately positively impact their growth and revenue.
What do insurance innovators do differently?
True innovation is a complex, company-wide endeavor that requires a set of best-in-breed tools. Whether an insurer is integrating new technology or implementing a new core system, they need to rethink how their organizations operate with their teams and customers interacting in a hybrid business environment. The goal should be to drive iterative change that evolves in the same way that business conditions and needs do.
However, innovation is difficult, even for well-established organizations, and there are constraints and barriers. Some are technology related, but many barriers are because of a legacy culture and changing a group mindset. This requires having more than a single conversation and company-wide memo. It requires a mandate from leadership and offering repeated training sessions and incorporating feedback from employees.
It’s no surprise that forward-thinking insurers are leveraging artificial intelligence, robotic process automation, and other intelligent automation technologies to achieve their business goals – mainly to make their policy and claims processes more efficient and resilient, and evaluating them from a more data driven approach.
Here are four ways insurers can think more like an innovator:
1. Use technology in very targeted ways
AI and RPA are so powerful because they can be used in really targeted ways. The most successful deployments are those that were targeted towards a specific business need and had defined metrics about what would be considered successful ROI.
The opportunity ahead is to be able to use those technologies and others like intelligent document processing and process mining to solve specific challenges, such as transforming claims-related documents so agents can access pertinent data faster, and achieve specific business outcomes across the traditional insurance value chain. These technologies enable insurers to finally use data as part of the decision-making process at critical points in the policy and claim life cycles.
Today, we’re only seeing the beginning of how these technologies will help insurers.
2. Understand your processes first
One lesson I’ve learned is that when projects have been deemed a failure, it’s not because the technology didn’t work. It’s most often due to organizations choosing the wrong aspect of a process to automate, simply because they didn’t truly understand their processes in the first place. Or they didn’t clearly define the business outcomes that they were aiming to achieve. A recent survey commissioned by ABBYY showed that one of the main reasons for automation failure was ‘vague goals’ (43%) and too hasty deployment (21%), plus automating the wrong technology (7%). A more thorough data-driven approach is needed to assess how a business operates – including its people, the technology and the processes in which they operate.
3. Set up an innovation lab
Internal collaboration and experimentation no longer need to take years to establish, even in large, established insurers with strong cultures. The overnight shift to remote work and virtual customer engagement that began with the pandemic has evolved to a place where there is an understanding that insurers need to accelerate digital adoption and enhance virtual operations.
Some companies are setting up innovation labs where small groups can work on projects without the pressures and constraints of the day-to-day business environment. They are building new ways of working that can be scaled up and absorbed into the larger organization. This approach enables them to look at the different business areas across the enterprise and figure out what technologies will have the most business impact.
This incubator approach can also help to define possible organizational changes that can promote collaboration. Insurers should facilitate ways to help colleagues share ideas and knowledge freely – encouraging that lessons learned from both success and failure are part of an ongoing conversation about process improvement. Most importantly, recognize innovation efforts even when they fall short of success.
4. Incrementally improve instead of rip-and-replace
New approaches to improving your organization don’t mean another rip-and-replace project. Using intelligent process automation helps an organization define what success looks like before a project starts. And that’s because innovative technology projects all have the potential for business value – it just depends on what your business objectives are.
The most successful insurers will be those that find ways to embed innovation into their culture and empower their teams – both individually and collectively – to challenge the way things have always been done, and encourage, support, and reward innovative behavior across the silos of an enterprise.
