Unlocking Insurance Technology Capabilities

In today’s transformation era, companies are changing the way they do business. Insurance companies are no exception, and many have selected a new insurance platform to undertake their transformation journey.

Many insurers are focused on digital business models and applications, such as AI-enabled and machine-learning chatbots and automation. A modern insurance platform enables fast, simple, and satisfying experiences for clients. However, technology capabilities alone have not been able to produce the customer experiences required to sustain profitable retention and growth targets.

While the maturity level for each company varies from Beginner to Intermediate to Advanced, it is common to struggle to meet the goals first established at the onset of the implementation. These hurdles, while common, require a pragmatic approach to tackle these issues.

There are common themes across these challenges and below is an overview of strategies to overcome these challenges.

Transitioning From the Time of “Go Live” to “Stabilization”  

Making the transition from implementation to “Go Live” is rarely smooth. The expectations envisioned in planning often don’t contemplate changing requirements, code issues, client-vendor communication, third party issues, and unclear business critical workflows. These hurdles make it difficult for projects to remain within the planned scope and often demand greater resources and budget to achieve the desired results.

It is not uncommon for insurers to turn on a new platform with limited functionality and known issues. This often creates difficulty in stabilizing the system post implementation, as new enhancements and modifications are continually pushed out to users already working to adapt to new processes. These challenges quickly erode the change management environment as well as the desired return on investment.

Insurers experiencing these issues should quickly work to define corrective actions that include prioritizing needs and objectives that will bring the desired results back into focus. An experienced provider can support you in driving results and unlocking your technology objectives. 

Defining the Automation Imperative

The desire for greater automation drives the need for digital transformation. Companies that achieve the greatest value from the digital transformation journey are those that realize automation goals within business-critical workflows. 

Common automation functionality includes straight through processing (STP) and auto adjudication. Enabling STP allows insurers to streamline underwriting, claims, and payments processes freeing up the organization’s resources for other high-value activities. While maturity varies, STP is quickly becoming a competitive requirement within the underwriting and claims functions of personal, small commercial, and life insurance lines of business. Across all insurers, no touch functionality, from the first notice of loss to claim settlement, remains the key driver for technology investments. The greatest level of maturity is currently within personal and life insurance claims, although all insurers are working to make enhancements and especially within digital payments.  

Other key areas where insurers are looking to extract greater value include artificial intelligence (AI) and machine learning (ML) algorithms that can enable greater automation in the areas of customer support (chatbots), as well as allow for historical information retrieval (telematics) and aerial geolocation mapping (i.e., use of drones). 

Achieving the Target Operating Model

How are insurers assessing their maturity and whether they have achieved the capabilities to meet the expectations of the business, customers and employees?  

Insurers who have invested in updated processes and enhanced their customer journeys should step back to validate that their maturity is meeting the initial objectives.  Specifically, this assessment should diagnose any areas that are not maximizing out of box capabilities. For instance, when reviewing claim functionality, it is important to ensure the following: 

  • Reporting and data capture associated with recording the loss
  • Automatic assignment of immediate services to the insured
  • Acknowledgement for receipt of loss
  • Triage and assigning claims to appropriate adjusters using loss characteristics and desired business rules

As part of a holistic assessment, workshops should be designed to assess capabilities and identify pain points. Participation should include cross-functional business stakeholders who can discuss post-implementation hurdles and challenge the current workforce strategies. The outcome should include a clear set of opportunities that can be identified and implemented as part of a roadmap. 

Insurers looking to invest in updated processes and an enhanced customer journey should look at this as a starting point for implementation as well as use it as an ongoing measurement of success. This roadmap should include milestones aligned across the target operating model and validated with technology providers. Leveraging an experienced provider can accelerate these efforts from developing process flows, customer journeys, and post implementation diagnostics. It can also ensure early identification of enhancements and corrective measures to achieve the target operating model.  

Managing the Degree of Customization

Focusing on achieving the out of box functionality and strategically limiting the degree of customization leads to a greater degree of success. Insurers not realizing forecasted benefits can be tempted to begin customizing functionality. This could be in response to negative feedback from customers or poor post-implementation results. It is important to know that it is not uncommon to also face post implementation challenges in certain lines of business (i.e., muti-line property), while others are operating well. It is critical to use a provider that is able to answer questions like: 

  • What is the impact on the minimum viable product?
  • Does the out of the box functionality meet 80% of the needed business capabilities by line of business? 
  • Is the implementation roadmap and timing realistic? 
  • Should the implementation roadmap be reviewed and updated?

Assessing the roadmap and milestones is critical to ensuring business capabilities are met.  Keeping in mind the 80/20 rule is also a good rule of thumb. A provider with experience assisting insurers can minimize expenses and accelerate the direct and indirect benefits of their implementation journey.

Advancing Data Reporting and Analytics

Improved data and analytics are the most sought-after reward in a digital transformation journey. If done right, it provides significant insights into metrics that monitor crucial business functions. One of the most common challenges faced by insurers is that they have non-standard disparate data sources. Further, if these sources are integrated within the platform, it leads to bad data, and eventually inaccurate reporting.

Having a standardized workflow and correctly defined business processes can minimize or eliminate bad data. Our team at BDO can help insurers can connect multiple data sources, clean their data, and prepare it for advanced reporting.

If you are facing any of these challenges or would like to learn more about how BDO can help you in your transformation journey, please contact us for a deeper dive into finding solutions.