How digital transformation can revitalize insurance industry
In the age of rapid digital transformation, insurers are at a crossroads: embrace innovation or get left behind.
The reality is that many carriers feel handcuffed by the rigidity and complexity of legacy systems, which stifles their ambition to innovate. Having invested millions in existing technology, rethinking the established systems that often perpetuate complicated processes, high operational spend, and a lack of consumer-centricity isn’t as straightforward as it might seem.
Still, this is a reality that carriers no longer have the luxury to ignore. As the EY Tech Horizon Survey highlights, “meeting changing customer demands” and “improving the quality of products and services” are top goals of insurance industry CIOs who understand that digital transformation is key to accelerating their business imperatives.
Changing customer demands
Driven by high standards set by cutting-edge insurance startups, customers are beginning to demand more from insurance carriers. The fact that more than 40% of insurtechs can solve customer pain points through digital experiences has motivated incumbent carriers to evolve or risk losing market share.
To be the premier carrier today, insurers need technology that centralizes all relevant work and data, while providing customers with transparency into claims and policy activities. Still, carriers want to unify their technology environments at a pace their business can reasonably consume. Constantly balancing the dichotomy of the modern API economy, they are weighed down by a legacy tech landscape that cannot react as nimbly.
An example of transforming at a consumable pace is ProAssurance, which began its digital transformation with one use case and gradually evolved, replacing more and more disparate processes with intelligent and integrated workflows. Today, the medical malpractice insurer has transformed their claims operations from the ground up.
Consolidating and unifying systems also opened the door for ProAssurance to use AI to automate routine tasks and deliver sophisticated analytics. As AI precisely assesses claims artifacts, claims processing is accelerated, leading to faster settlements and improved customer satisfaction. Similarly, AI streamlines service processes by reducing busy work, answering customer questions, and assisting agents in solving problems more efficiently.
Digital experiences alone will not address shifting customer demands. Customers also expect transparency through their interactions with insurers. Consumers, especially millennials and Gen Zs, prefer managing their policies online to avoid phone calls or office visits. Solutions offering real-time updates to help customers quickly and easily understand the status of a claim can significantly enhance trust and satisfaction. A robust self-service portal that empowers customers with the ability to manage their policies anytime and anywhere is also critical.
From a car accident to a critical life event, digital transformation at scale can reduce the friction policyholders experience during life’s most fragile moments. The combination of customer-centric digital experiences, artificial intelligence, and real-time data transparency are foundational to address changing customer expectations while aiding in carrier productivity.
The impact of innovation
The greatest barrier carriers face when attempting large scale digital transformation is the lack of interconnectivity in their technological processes. To give customers the connected, frictionless digital experience they’re looking for, insurers must do more than simply upgrade external facing portals for agents or policyholders. Much more critical is connecting all aspects of their operations, from claim processing to customer service, to ensure that customers have simple interactions no matter what information or help they need. The entire organization – including the people and the systems – must work together to deliver these seamless experiences.
Technology that can consolidate point solutions and unify departments, from claims processing to customer service, is vital to improving efficiency and communication. When departments are connected through automated, digital solutions, providers can easily deliver quick and personalized service to policyholders, brokers, and agents. A common example would be when a carrier is required to communicate a change in coverage based on a new regulatory requirement. In this case, technology can identify affected customers and keep them informed.
To expedite delivery timelines for new innovations, carriers are turning to low-code app development, bringing non-technical teams into the process to lighten the load on pro-developers. Low-code communities also enable a dedicated workforce to be reskilled in areas of key business expertise. For example, with in-depth knowledge of processes and data, FNOL Coordinators or Underwriting Admins are very well-positioned to build automations that eliminate workarounds and redundancies in intake.
The next step
Looking towards the future, technological innovation is paramount for insurers to stay competitive in today’s fast-paced market. By unlocking intelligent automation across claims, servicing, and underwriting, insurance companies can optimize customer and employee experiences, identify trends and bottlenecks to drive efficiencies, counter claims fraud, reduce claims leakage, streamline processes through omnichannel experiences, and much more.
The benefits of these innovations are already being seen, proving that insurers willing to embrace change and invest in modernization will not only survive but thrive in the new digital era.
