Category: Blog

Having been a laggard in digital transformation, the insurance industry has much catching up to do. The ever-changing digital landscape is forcing businesses to turn on their “all-things-digital” mode. From transforming its front end to offer its customer the seamless digital experience they are looking for to optimizing its internal processes to be more reactive and more efficient, the demand on IT is growing. While in the past a waiting list of IT project was normal and acceptable, the appearance of more agile technological competitors getting the favour of a growing portion of consumers are forcing carriers to adopt bolder and quicker transformative actions.

To tackle the accumulated backlog, the sector is confronted with two crucial obstacles. The unprecedented scarcity of IT specialized resources and conflicting priorities between perpetuating complex and inflexible legacy systems and innovating. In an attempt to solve or ease these hardships, low-code / no-code solutions and platforms have emerged. But are such solutions the panacea? Are they to be used indifferently across the organization? These are the questions we will here try to shed light on. We will start first by explaining what the concepts of low-code / no-code stand for and explain their benefits. We will go on to demystify a common idea that tends to prevail on the effectiveness of these new solutions, before rounding up on how they ought to be implemented for optimized results.

No-code platforms enable users to develop applications and solutions solely through a visual interface and drag-and-drop functionality, while low-code platforms involve a certain level of coding. Both types of platforms simplify the process of creating software and solutions for users.

With no necessity for coding skills, business users can create their own solutions in what has come to be called no-code citizen app development. The advantage is an increased capacity in two ways. Firstly, users no longer have to wait for extended periods to obtain solutions from the IT department. Secondly, software developers can free up their mental bandwidth to concentrate on more important business-critical tasks.

Overall organizations thus benefit from:

• Saving time and money – building app, processes and products require less coding making the development cycles shorter.
• A faster time to market – not dependent on IT skills, availability and timing, a product or app may be configured and launched faster.
• Empowered citizen developers – software development may be done by a wide population of business specialists.
• Efficient use of IT Resources – Your IT department can concentrate on more complex responsibilities by offloading digital experiences to no-coding resources.
• The advantages of SaaS solutions – no-code / low-code solutions being Software-as-a-Service, whenever your parent software upgrades its tools with security features, bug fixes, and other changes, your apps and tools get it automatically.

While Gartner predicts that by 2025, 70% of new applications developed by organizations will use low-code or no-code technologies, up from less than 25% in 2020[1], they add that there is no such thing as “no-code.” They are convinced that “no code” is more of a marketing term that implies the tools are for non-professional developers. On the other hand, low code suggests using a scripting language in addition to no-code platform capabilities[2].

To leverage the full potential of the low-code paradigm, insurers must carefully select low-code platforms that address their most pressing use cases. No one platform is a panacea; the key lies in the integration and coexistence of low-code enterprise platforms and low-code insurance platforms.

The article discusses the importance of selecting the right low-code platform for insurers to leverage the benefits of the low-code paradigm. No single platform is perfect, so integration and coexistence of low-code enterprise and insurance platforms are crucial. The article identifies the non-low-code nature of legacy platforms as the biggest obstacle to the full potential of low-code. For effective integration with other business IT systems, low-code compliance is necessary, especially in the insurance industry. The future of the insurance industry lies in multi-platform low-code systems that enable faster time to market, increased efficiency, lower costs, and citizen developer empowerment.

The results of configurable tech: more resources for other things

The real question of configurable technology comes down to resources. Would you rather spend more resources on custom from-the-ground-up software – development, staffing, maintenance, and upgrades – or on just about anything else?

The rise of low-code application platforms (LCAPs) is driving the increase of citizen development, and notably the function of business technologists who report outside of IT departments and create technology or analytics capabilities for internal or external business use. From: Gartner Says Cloud Will Be the Centerpiece of New Digital Experiences

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Sources:

[1] In: Gartner Says Cloud Will Be the Centerpiece of New Digital Experiences

[2] In: No-code and low-code platforms in insurance: The future is multi-platform

Innovation is a hot topic for insurance. The industry has lagged and has a lot of catching up to do to offer clients the experience they have come to expect. Innovation is about identifying unmet needs and untapped markets and addressing them, sometimes with untested solutions and unproven business models. For innovation to deliver sustainable growth, it must be embedded in the company’s growth model and fully integrated across the organization, bringing together cross-functional teams to approach challenges in new ways.

By integrating new technologies and functionalities in their solution, software providers empower carriers to innovate their processes and product offerings. Given the importance of the capabilities built into insurers’ systems, a legitimate question arises:  How do software providers innovate to empower insurers for value creation?

To shed light, we interviewed Karina Buch, COO of IBA.

Interviewer: Thank you, Karina, for your availability to help our readers understand the innovation process in an insurance software provider such as IBA. My first question is:

How does IBA contribute to innovation in the insurance world?

Karina: We do it with the capabilities made available on our platform. Capabilities relating to both how the platform is constructed and its design – e.g.: APIs based, availability 24 by 7, being backwards compatible – and the true capabilities of an end-to-end platform.

Furthermore, and contrary to others that offer product-based insurance solutions, IBA’s modern insurance platform is product agnostics for P&C, risk-based insurance. We offer an open template so that insurers may innovate and set up a product however they wish, for the audience and distribution channel they chose, made available via app, web or other, without limitation.

A third component is the business model of the insurance product. A platform must empower carriers to set up products based on innovative business models; usage-based (on/off), swiping covers on or off depending on life stage or context, affinity, white label, embedded, B2B or B2B2C and so on. And just like a magic cube, the same platform must permit configuring a multitude of offerings with different characteristics to the same or other client segments as well as be multi-tenant.

To summarize, we do not tell insurers how to innovate but, through IB Suite, we give insurers the capabilities so that they can innovate on all these important factors for their business.

Innovation at IBA goes by identifying and implementing the capabilities that will enable insurers to do novel things in a new manner.

As much as the insurance industry must innovate to adapt to changing customer needs, software providers that serve this industry must look for new ways of meeting the evolving needs of their clients. What are the processes in place at IBA to innovate in its product offering? 

Karina: We do a couple of things. We do a “voice of the customer” and ask our key clients what their plans are and how they wish to achieve them. We also question our IS (information system) partners as to the trends they identify in the market, what is more in demand, and what we should put on the roadmap.

An example of this is the data lake which we enquired about, which was commented on by one of our IS partners and referred to by one of our big customers. As a result, we developed the concept and now have incorporated it for rollout in our roadmap.

How do you measure the effectiveness of your innovation processes? 

Karina: We do it in several ways. We monitor customer-related KPIs – such as the volume of transactions and GWP – also for service fee purposes – to assess the adoption and use of each (new) functionality. We also speak to the customers and collect their feedback. And, in the sales process too, we share our views and intentions on novelties to gather insight into the attractiveness of new functionalities. So we have different touchpoints to come to conclusions and of course, there is then the ultimate, as to whether the customer wants to be a reference customer, and what they say.

Any innovation, innovative feature or offering you may share you will launch soon? 

Karina: Normally we never do that, and the reason is I want our prospects to buy IB Suite for what it is today and not what it might be tomorrow.

Well, thank you Karina for those insights and for making us understand better how software vendors such as IBA contribute to the innovative process of insurance.

The digital transformation of insurance started with the introduction of IT systems and mainframes in the second half of the twentieth century. So why has it become such a hot topic over the last few years and what drives this trend? Why did insurance board the digital transformation journey later than other industries? What is now the main focus of the industry?

As true as the industry never stopped its digital transformation, it is the acceleration of the pace at which society became more digital that left insurance behind. As the web evolved from version 1.0 – characterized by data and search engines – to version 2.0 – where a portable internet fuelled social networks and made data sharing and digital interactions the norm – insurance stood still for a long time. What explains that, although other brick-and-mortar businesses made their products and services more readily and conveniently available to consumers online, the financial service industry took longer?

The first factor is the nature of the business which elevates high entry barriers for newcomers. Compared to others, the financial services industry requires more capital, is more regulated, and necessitates more significant IT investments to run. Secondly, the complexity, architecture, and age of the installed IT infrastructure of incumbents in a given (geographical) market are similar, as is the perceived difficulty to transform it. A third reason that slowed down the industry’s perceived need to adapt is less standardized and more complicated products that consumers have more difficulty comparing and replacing. Finally, having few touchpoints with their clients, incumbent insurers did not feel the urgency to digitize or turn client interactions more convenient.

The progressive and more frequent appearance of tech companies with solutions covering all stages of the insurance value chain made this status quo change. Looking to fill the gap left open by traditional players who did not have a satisfying value proposition for modern consumers looking for convenience and new products, neo insurers and insurtech – the likes of Lemonade, Getsafe, Bought By Many, Wakam or Wefox – surged using the available new technology and are grew strongly.

To face off this growing competition with risk subscription capabilities, incumbents started acquiring and partnering with innovative start-ups that offered the technology and know-how they lacked to provide clients with the user experience they had come to expect from insurers too.

Nonetheless, transforming dated technologies has its limits and makes it difficult to attend modern days customers’ expectations. Accessing third-party information providers or leading-edge Insurtech technologies turns into a headache with legacy systems The effort spent in terms of time, personnel, and money, to maintain and develop dated systems that utilize outdated languages, databases, and architectures have steeply increased for many companies.

While some of this effort – also called technical debt – is inevitable, it moves from an important topic to an urgent one when it adversely impacts the balance sheet. When systems are closed, unable to connect to innovative technology and insurers build under-efficient patches giving the impression of business as usual, technical turns legacy systems into the main factor limiting the speed and capability of incumbents’ digital transformation.

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Quote from Manikandan Natarajan[1]:

‘Another way to look at it [technical debt] is the difference between an insurer with a high-performing tech stack and another with what has thus far been perceived as an ‘average’ performing tech stack. If you are spending 70% on business as usual (BAU), 20% on innovation, and 10% on other incidentals, then you are part of the ‘average’ Insurers. Compare this with High Performing Insurers who spend 40% on BAU and 50% on innovation.‘

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As Cognizant refers[2], there is an increased understanding among insurers that the foundational components of yesterday’s Policy Admin System – architecture, tech stack and functionality – contribute to reduced flexibility, scalability, and digital readiness.

To counter this limitation and successfully move on their necessary digital transformation journey, carriers with legacy systems are now focusing on choosing an adequate modern IT solution for their company.

Engaging in the process of modernizing and adopting a new insurance platform though is a rare moment in the life of an organization. Chances are that few or any of the people in a given carrier have done it before, in their current company, or ever. How to proceed and select the new core system that will eventually impact and condition the company’s success in the short and medium term may seem daunting. It shouldn’t be!

Modern times call for modern solutions and a novel approach to core system selection. Incumbents need open and flexible platforms with the necessary capabilities to cater to customers’ expectations of today and tomorrow. Immediacy being the rule, the clock is ticking fast. Insurers need to align the quality of their service offer fast or risk losing clients to their more digital counterparts. Agile methodologies combined with the modularity of modern insurance platforms have rendered long traditional selection and implementation processes obsolete.

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[1] In What it Takes to Reduce Technical Debt in Insurance Systems; posted by Manikandan Natarajan, June 28, 2021, SimpleSolve

[2] In: How APAC Insurers can modernize with Next-Gen Digital Policy Administration Systems, Cognizant 20-20 Insights, Jan 2020

In our blog Embedded Insurance and its Importance: Part 1 we explained how context (or a change thereof) determines taking on insurance, and how making a complementary insurance cover conveniently available in the customer (digital) journey creates value for the parties involved – client, carrier, and distributor. We also saw that consumers are open to acquiring insurance products from trusted brands that embed them – making them readily available in their offers.

This new reality opens a huge potential for embedded insurance, which is estimated to increase in Europe, from $10,781.8 Million in 2022 to $28,525.5 Million by 2029[1].

While a debate is currently on as to whether embedded insurance is at its version 1.0, 2.0, 2.5 or 3.0 – see below – 2 things are sure:

1. Insurers need to reconsider their relationship with brands which they, until now, merely saw as distribution channels. Jointly they can create a proposition that is valued by the brand’s customers, that is profitable to all and that both want to push.

2. A substantial part of the potential of EI will come from new products created based on behavioural and real-time data collected in an increasingly integrated environment which requires modern systems and capabilities.

The peer group brought together by Simon Torrance – Founder and CEO of Embedded Finance & Super App – suggests that a new value stack that exploits digital technologies and data in new ways will render possible underwriting models that improve customer experiences, marketing effectiveness, risk selection, pricing and unit economics. New operating systems will appear that ingest an increasing volume of real-time data from the operations of brands, their customers, and other sources to optimize and match the right solution to the right customer at the right moment in the right place.

While examples of this new value stack are still rare to be found, the peer group points out that most of the innovation has come from a growing number of start-ups deploying a range of different business models. They go on to emphasize that the biggest winners will be those running the Operating Systems, as the latter are much less capital-intensive businesses than risk-carrying. Incumbents, therefore, need to skill up, develop, manage and grow such operating systems or risk being overtaken by insurtechs as they learn how to cover more sophisticated risks and offer adjacent services.

Brands with large customer bases that realize the benefits of proposing creative financial services in their product offering may ultimately look for a new breed of Operating System provider that can manage all their needs, beyond insurance, via one platform. This Operating System provider would then source a selection of financial services providers to integrate and have readily available on his platform, next to others ad hoc, to become a one-stop-shop.

Although the insurance industry traditionally works with data, it has been unable to integrate and work on an explosion of new datasets coming from new external sources. Collaboration with data-driven tech companies is necessary to skill up insurers and in turn improve the ability of the industry to innovate in collaboration with brands. The richer and more organized the information, the better protection gaps may be assessed, transferred and closed.

It is estimated that non-insurance brands may distribute up to $5 trillion GWP worldwide over the next decade. How much of it will be in collaboration with incumbents depends on the speed at which they skill up and adopt the necessary capabilities to, jointly with the brands consumers trust, create and distribute new products responding to real emerging needs.

As iptiQ – a technological insurer launched by the incumbent Swiss Re – says [2] : as every sector becomes tech-enabled, those insurers who learn to efficiently respond to the needs of brands and their customers will be best placed to generate new growth and value.

Embedded Insurance 2.0, 2.5, or 3.0?

Although we have not been talking of EI for so long, it has evolved from its original version (EI 1.0) which was an affinity-like program by which insurers partnered with other organisations or businesses to distribute products and services directly to groups of similar people, such as those in unions or fraternal organisations.

Not all refer to version 2.0 in the same form.

According to the peer group referenced above[1] we are currently initiating EI 2.0 which is a new way of collaborating and innovating with third-party brands, of all types and sizes, to help them grow their businesses, create compelling new protection solutions for end customers and, ultimately, close protection gaps¹.

Accenture[3] argues though that version 2.0 started when consumers began to purchase more expensive items and seamlessly added on insurance while making a physical purchase – ex.: digitally purchasing motor insurance alongside a car at a dealer. We would then arrive at EI 2.5 when insurance started to be added online in complement of a web purchase – such as travel insurance when buying a flight on-line.

According to Accenture still, EI 3.0 is when insurance cover is designed and included in the background of a non-insurance product, where the consumer has no say in the choice of carrier, the level of protection or the cost – ex.: Volvo’s electric vehicle insurance in partnership with Allianz or Spot’s injury insurance being included in ski passes.

Sources:

 [1] In: Embedded insurance: a brief overview, 19 Aug 2022

[2] Composed of executives from Allianz, American Family, AXA, Ergo, Google, IAG, Liberty Mutual, Marsh, Munich Re, Swiss Re, and Travelers

[3] In: Europe Embedded Insurance Business and Investment Opportunities – Q1 2022 Update

Embedded finance, and now embedded insurance, has become a buzzword. What’s behind this concept? Why is it gaining so much traction and what are the essential ingredients for success, are aspects insurers look to understand to engage in a movement that is set to proliferate and touch every digital interaction we have in the future.

Dennis Kang, CTO, ZhongAn – China’s first and largest online-only P&C digital insurer that has capitalised on the embedded insurance opportunity – defines it as:

‘The insurance product that is firmly integrated into all kinds of business scenarios where protection might be required. Tech is fully involved to make the customer experience very friendly and insurance low cost. It is selected and approved via a check box and is embedded in all products‘[1].

In insurance, context is key and often a trigger of purchase. Experiencing a change of context, due to a significant life event tends to heighten an individual’s awareness of potential risks, which will frequently spur a protection need. The birth of a child may stimulate the parent’s wish to protect his well-being via the subscription of a life insurance policy and a health insurance policy. The purchase of a house may lead to subscribing to home insurance to protect oneself against the risk of fire and other hazards. So will the purchase of a car, a piece of expensive jewellery or equipment, or a pet, for instance. Not having a direct and seamless route to obtaining coverage may lead to neglecting it and then later finding oneself in a regrettable situation if a loss occurs. This is where embedded insurance comes into play.

Embedded insurance fills the gap left by traditional insurance players. Today’s insurance market offers a wide array of coverage options, that is also large, complicated, and fragmented. Consumers get coverage from many types of providers, including carriers, brokers, banks and product manufacturers. Research shows, however, that traditional providers — insurance carriers and brokers — are not meeting the demand for coverage across the wide-ranging categories in which consumers are interested[2].

While the trust level of consumers in insurers varies from one country to another, consumers are open to offers made by brands they trust, that leverage data to offer insurance meeting their needs, when and where they need it.

Technology and our increasingly digital world turn the insurance purchase easy and convenient. The more digital touch points an institution or brand collects on a consumer, the better it will know his lifestyle and purchases to identify the most timely and relevant protection cover to propose and sell. Embedding this insurance offer in the customer journey makes it then easy and convenient to subscribe.

Dennis Kang identifies 5 key elements an insurer must master for a successful embedded strategy at scale.

1. Technology
Embedded insurance premiums vary and may start at a few cents[3]. It is often a high-volume, low-margin business where onboarding is challenging. Technology must optimize processes and computing power must be ensured. It also has to be agile to respond quickly to the competition when needed.

2. A customer-centric business model
To win customers’ preference and loyalty, the company must centre its attention and processes on providing the customer with an outstanding experience in all interactions, from onboarding to claims and renewal. This centricity may lead to selling a product with low to zero profitability in order to onboard the customer and sell other more profitable covers.

3. Ecosystem linkage management
Technology-related, but not only, an insurer must have the capability to connect and manage many ecosystem partners to set up products and integrate any scenario that requires a cover.

4. AI and data
Data collection and analysis is the centre of it all, hence AI too. All must be collected and analysed to detect emerging needs, segment the market, analyse responses given and minimize fraud.

5. Internet Knowledge
Insurance needs and opportunities may arise from any part of the internet; a marketplace, forum, social media, metaverse, web 3.0 … A good knowledge of the net is essential to leverage and attract clients in whichever channel they use.

Getting insurance coverage is very much context based. Important life events and purchases will raise awareness of the risks that may potentially harm, destroy or affect a new life event, investment, or purchase. While in the past one could neglect getting protection against those risks for not being offered adequate cover at the right time and place, technology is changing the scene. Closing the insurance gap, brands and institutions consumers trust are now embedding insurance products in their offers, making them readily and conveniently available to their customers.

The trend has only just started. More and more banks, online retailers, marketplaces, and ecosystems are looking for insurers with technological solutions and products to partner with. If you too are interested to know how IBA has helped renowned carriers embed insurance in a variety of retail chains and channels, please contact us here or click here for customer reviews.

Sources:

[1] In TDI Talks! In conversation with Dennis Kang, CTO, ZhongAn – The embedded insurance opportunity, and key ingredients for success

[2] In: Embedded Insurance Report, Leveraging Transaction Data To Expand Coverage In A Digital-First Market, PYMNTS.com | Cover genius

[3] A return shipping cost reimbursement cover of a low-price good, for example

We all know about the increased adoption of the cloud by every sector of the economy. Many things are said on the topic and the reason and benefits of this trend are not always clear to the non-initiated public.

A recent survey by McKinsey[ii] indicates that by 2027, 54% of business leaders plan to have more than half of their computing environment on the public cloud (versus 13% that have it today).

Ultimately, it is the customers – or the desire to give them the best possible experience – that is the groundswell of this movement.

As discussed in Customer experience in the driver’s seat of insurance transformation, in today’s connected world shaped by the GAFAMs, clients have come to expect a flexible and personalized experience, by which all service providers interact with them in a digital, seamless, and autonomous way. To meet these evolving customer expectations, the digitization of society is constant. This in turn leads to greater data generation and a steadily increasing number of data processing issues that can only be solved in cloud environments. The provision of constantly increasing computing power with sufficient capacities is nevertheless by no means the only driver of cloud development. Just as important is the fact that many of the most innovative methods of data analytics are available first and foremost in the public cloud.

In 2017 already, Bain & Company and Google identified seven key technologies that had begun to disrupt the industry and whose impact they predicted would accelerate in the next years[i]. These technologies —namely, infrastructure and productivity, online sales technologies, advanced analytics, machine learning, the Internet of Things, distributed ledger and virtual reality— are mostly available in the cloud and continue to progress and generate data.

While in the past, to use such programs or applications, software needed to be loaded onto a computer or located on a physical server in the same building, Cloud computing eliminates this need (and the associated costs), allowing users to access the same programs from any location, thanks to the internet.

The tangible benefits of cloud technology are thus: easy access, reduced costs, increased performance, scalability, reliability, and security. However, the most important thing to understand about the cloud, is that it’s not a more efficient way to operate IT, but a force multiplier for generating value for the business.

McKinsey[i]says the business units most effective in capturing the cloud’s value focus on two key areas: understanding where the value in the cloud lies and building a partnership between business and IT. As illustrated by the exhibit below, the organization will then derive value from rejuvenation – focusing on cost and risk reduction led mainly by IT – and innovation – where business and IT look at the cloud to accelerate or enable the development of new revenue streams.

McKinsey figures[i] that the rejuvenation of cloud adoption by itself enables carriers to standardize, automate and benefit from:

• 30 to 40% reduction of IT overhead costs
• Optimized IT asset usage by scaling processes up and down as needed
• Improved overall flexibility of IT in meeting business needs through the use of business features made available by cloud providers

Sibylle Fischer, Director Strategic Venturing / Startup Scouting at Baloise Group, is right when she says[ii]: « today, cloud-based software and software platforms, open-API technologies, microservices, machine learning and A.I. are all helping to redefine everything we know about insurance — from the way we onboard customers, to how we process claims, to how we sell products and services. »

Simply put, the cloud is the distribution of essential services such as servers, databases, and software via the internet. Making available services such as storage, processing, and data transmission to users in an on-demand mode, the cloud is having a huge impact on the insurance industry. Most important is that its impact on the organization is transversal, from benefits for internal processes to enabling new customer acquisition, and policyholder loyalty. To realize and exploit the potential of the cloud, business leaders need to ensure all executives in the company understand what is at stake and be involved.

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Sources

[i] In: McKinsey & Cy, Reaching the next normal of insurance core technology, June 2020

[ii] In: What’s Next for Innovation in Core Insurance

Cloud computing: Where the insurance industry really stands, From <https://isg-one.com/articles/cloud-computing-where-the-insurance-industry-really-stands>

[i] Digitalization in Insurance: The Multibillion Dollar Opportunity

[i] In: McKinsey – What every insurance leader should know about cloud, Successful cloud migrations depend on knowing where the value for insurance lies in cloud and on business and IT working together, Sept. 2022

[ii] In: McKinsey – What every insurance leader should know about cloud, Successful cloud migrations depend on knowing where the value for insurance lies in cloud and on business and IT working together, Sept. 2022

Insurance is commonly thought to be slow and bureaucratic. Although the industry is transforming and this is changing, historically, all processes of the insurance value chain incorporated human intervention to a certain degree. While judgement and advice are necessary for some contexts, in many others human intervention limits itself to basic data input systems or to transcription from one system to another. besides being slow, these labour-intensive tasks have other inconveniences. They are prone to errors, expensive and probably not the most rewarding.

Insurers, who started off their digital transformation journey by providing consumers with a more digital experience, are now looking to automate to reduce costs, improve efficiency, better use resources, and increase the scalability of their operation.

Automation may be applied to a great variety of processes. It comprises Robotic Process Automation (RPA) and artificial intelligence (AI) solutions such as Intelligent Document Processing (IDP), chatbots, and machine learning, that augment each other to mimic a user’s activities and/or human thought process to completely -or partially – manage business processes[1].

Looking at underwriting for instance, Deloitte found out in their Financial Services Global Outlook Survey 2020, that an increase in automation was the top alteration insurers planned to make in a 6 to 18 months time frame[2]. By doing so, carriers, burdened by legacy systems and unproductive tasks, such as manually compiling information from disparate sources and interfacing with multiple systems, hope to lower costs and increase productivity.

Insurance broker submissions, for example, are an area where handling is still high. Email submissions are read by knowledge workers who triage them and extract relevant information for downstream underwriting. The same applies to any attachments, forms, loss-run reports, spreadsheets, custom forms, and photos. However, this process is labour-intensive, time-consuming, and error-prone, and can hinder the time to bind. As a result, quotes are not turned around quickly enough for customers and not all are processed, at the risk of not quoting more complex submissions that may represent acceptable opportunities. The company thus ends up at a disadvantage compared to more agile competitors.

A submission intake solution that integrates intelligent technology may resolve these problems. It automates submission intake and triage processes and performs data capture and input tasks faster and more accurately than employees can on their own.

Claims is another area where automation and AI is being applied. Doing so carriers look to provide customers with a quicker and improved experience while making the process more efficient and saving claims expenses.

Underwriting and claims are just 2 activities part of the Insurance value chain. Other activities exist which also may be broken down into multiple processes, some of which are more prone to automation.

Although all processes may seem capable of automation in theory, not all have the same potential to be automated or offer the same benefits. So, how to know which processes are worthwhile and with which ones to start?

The Enterprise Value Chain Approach¹ (EVCA) is a framework that enables organizations to identify and assess processes for automation to create and feed automation pipelines. It is a methodological approach that analyses activities and breaks them down into their constituent processes or value chain. Each constituent part is assessed for its suitability for automation based on a set of assessment dimensions, such as whether it is transactional or strategic, its cost and volumes. At the end of the assessment, the processes deemed unsuitable for automation are removed from the automation program, and the remaining processes are put on the list for further consideration.

Applying the EVCA, Everest Group identified five primary business processes that are integral to the P&C insurance value chain. The first step involves evaluating the financial risk of insuring an entity, which is conducted by actuaries. Actuaries use historical data to create rate tables that estimate the likelihood of an event occurring and provide the appropriate premium based on various factors and features. Next, the underwriter determines if the applicant should be insured and uses the rate table to determine the appropriate premium. After the analysis of the risk to be covered under the insurance policy, the process moves on to policy servicing and reporting. This step encompasses transactional duties, such as processing and printing the policy, preparing insurance endorsements, auditing, and resolving customer queries. The last stage is claims processing, which is a five-step process starting with the initial notice of loss, followed by claims appraisal and adjustment, settlement of claims, and salvage through subrogation and litigation.

Once the 5 process groups are identified, each constituent sub-process is further scrutinized for its automation potential as described above, to make up the graph below recommending further action based on Everest Group’s assessment framework.

The Pursue quadrant of the framework is occupied by processes with high automation potential and high overall cost and volume of operations. The first notice of loss (FNOL) process and underwriting process are both in this quadrant due to their high transactional volume and potential for automation. FNOL involves minimal judgement and has multiple technology platform deployments, making it highly automatable. Underwriting also has a high automation potential due to a fragmented technology environment and significant underwriting activity and could benefit from cognitive data processing. Automating these processes could improve efficiency, reduce cycle time, enhance fraud detection, and minimize errors.

The Claims adjudication, subrogation, and actuarial processes offer a cost-saving opportunity through automation but have limited potential, placing them in the Opportunistic quadrant of the framework. These processes are complex and require human intervention, with actuarial modelling and analysis making it difficult to digitalize. However, cognitive data processing and self-learning algorithms can improve automation adoption and enhance business performance. Claims adjudication and subrogation have lower automation potential due to unstructured process workflows and minimal standardization. The leverage of cognitive solutions can reduce manual processing requirements and drive a healthy bottom line for insurers.

Policy servicing has moderate automation potential but is in the Watch quadrant due to the already fairly digitalized and transactional nature of the process. Chatbots are in use to enhance digital customer experience, which limits further efficiencies with first-level process optimization already achieved. However, techniques such as straight-through processing and auto-flagging of cases addressed can improve cost optimization and reduce turnaround time.

It is thus fair to say that the P&C insurance value chain processes have a reasonable potential for automation due to their transactional nature and well-defined workflows. However, most of these processes are highly complex, requiring extra efforts to achieve superior benefits from automation deployment. If implemented correctly, automation can improve carriers’ bottom lines and increase market share by engaging customers in newer and better ways.

[1] Identifying Automation Opportunities for Property and Casualty Insurers, From <https://www.automationanywhere.com/company/blog/rpa-thought-leadership/identifying-automation-opportunities-for-property-and-casualty-insurers>

[2] The rise of the exponential underwriter, Leveraging a convergence of data, technology, and human capital to transform underwriting in insurance, From <https://www2.deloitte.com/us/en/insights/industry/financial-services/future-of-insurance-underwriting.html/#endnote-sup-7>

The insurance industry is constantly evolving, and creating new products to meet customers’ changing needs is critical to staying competitive. Solving the product development challenges that arise alongside implementing these products, requires a careful consideration of various factors.

Every insurer has been there — long processes, incompatible data, and challenging integration. Even when the product is finally onboarded, it doesn’t function as advertised, and it seems no one on the support team will answer your call. Not only are other projects getting held up, but long delays and poor service means you’ve just cost yourself a customer. Does it really have to be this way?

In this blog, we’ll take a closer look at some of the critical challenges involved in creating new insurance products and how to resolve them to implement solutions effectively.

Identifying Customer Needs

Identifying customers’ needs is one of the biggest challenges in creating new insurance products. This involves extensive research to deeply understand customer preferences, pain points, and emerging trends. Insurers must invest time and resources into market research, surveys, and focus groups to gather insights into customer demands.

The challenge here is that customers’ needs can be diverse, depending on their age, income, location, and other factors. Insurance companies must strike a delicate balance between meeting the needs of different customer segments and ensuring that their new products are financially viable.

Regulatory Compliance

Another major challenge in creating new insurance products is navigating the complex regulatory landscape. Insurance is a heavily regulated industry, and insurers must comply with various guidelines set by state and federal regulators.

Ensuring new products comply with all applicable regulations can take time and effort. Failure to comply with regulations can result in significant fines, legal disputes, and reputational damage.

Designing the Right Product Features

Creating new insurance products involves designing features that meet customer needs while balancing financial considerations. Insurers must consider factors such as the level of coverage offered, the pricing of premiums, and the deductibles and co-payments.

Curating the right product features requires careful consideration of an amalgamation of customer needs, market trends, and risk management strategies. It can be difficult to ensure customers are provided with adequate coverage while still being able to afford the product.

Distribution Challenges

Another challenge in creating new insurance products is effectively distributing them to customers. Insurers need to consider the most effective channels for reaching their consumers, such as online platforms, agents, or brokers.

The challenge here is that different customer segments may prefer other distribution channels. Insurers need to tailor their distribution strategies according to their consumers. Insurers also must ensure that their agents and brokers are adequately trained to sell and service the new products.

Overcoming Challenges

Having an onboarding process that is fast, efficient, and well-supported is crucial, but it can be challenging. A successful onboarding process can be achieved by thorough planning, a focus on the process, and a dedication to customer service.

Pre-Planning

A crucial step to a smooth onboarding process is curating a dedicated team consisting of an account manager, product owner, technical lead, and process coordinator to oversee implementation. Each team member plays an essential role in ensuring a successful onboarding experience. The account manager builds relationships with the insurer and understands their business needs. Product owners are involved from the start, outlining the benefits and workings of the product and how it meets the insurer’s needs. The technical lead is responsible for delivering and installing the technology.

Preplanning should begin before the kick-off meeting. The team must define the deliverables, develop an implementation plan, and ensure it meets the insurer’s efficiency and speed criteria while avoiding system interruptions. Everything should work within the insurer’s guidelines and meet their deadlines.

Communication and Action

The next step is to initiate the implementation process. The team leader should contact relevant parties to confirm and establish a plan, and an implementation schedule should be created that considers any specific requirements.

The focus of meetings should shift towards actually implementing the product or service. The team should be dedicated to delivering a quality customer experience and supporting the insurer throughout the process.

Support

It is vital to have ongoing support during the onboarding and beyond. A single point of contact to address issues or questions, even if this person may change throughout the process, is crucial to ensuring streamlined customer service. Support should come from operations, IT, product development, and training.

Conclusion

Creating and implementing new insurance products requires careful consideration of customer needs, regulatory compliance, product design, and distribution. Insurers must invest resources into market research and distribution strategies to ensure their new products meet customer needs while remaining financially viable.

A platform that co-exists with existing infrastructure and integrates legacy systems will allow for a seamless digital transformation and onboarding process. Time-consuming and costly system migrations can be a thing of the past with an innovative solution that optimises your value chain. Insurers need a customer-centric and comprehensive platform and cutting-edge technology to empower their teams. Overcoming implementation challenges in such a way will allow insurance companies to stay competitive and meet the evolving needs of their customers.

The insurance industry is undergoing a rapid transformation due to technological advancements and changing consumer expectations. While these changes have the potential to unlock new opportunities, they must overcome the corresponding integration challenges . One of the biggest challenges facing insurance companies today is integrating their systems and processes with the larger digital ecosystems that are emerging in the industry.

Integration has become a critical factor in ensuring the smooth functioning of businesses. Integration enables seamless communication between various systems and stakeholders. It ensures that data is transferred accurately and efficiently, which is critical for underwriting, claims processing, and policy administration. It also allows insurers to offer a better customer experience by enabling customers to access their policies and claims information through multiple channels, including web portals, mobile apps, and social media platforms.

As these ecosystems continue to evolve, insurance companies must navigate a complex landscape of data sharing, platform interoperability, and customer engagement to stay competitive and deliver value to their customers. In this context, tackling the challenges of integration is more important than ever, and will play a critical role in shaping the future of the insurance industry.

In this blog, we will discuss the integration challenges facing the insurance industry and explore strategies for overcoming them.

Integration Challenges in the Insurance Industry

One of the biggest integration challenges facing the insurance industry is the sheer complexity of insurance products. Insurance products often involve a variety of variables such as premiums, deductibles, and coverage limits. As a result, integrating these products with legacy systems can take time and effort.

Insurance systems often involve multiple layers of technology, including front-end interfaces, middleware, and back-end databases. The complexity of these systems also makes it difficult to identify the root cause of integration issues, leading to delays in problem resolution.

Another challenge is the lack of standardisation across different platforms in the insurance industry. Insurers often use different processes, procedures, and a range of legacy systems. While legacy systems aren’t always the problem, some aren’t compatible with newer methods, like Agile, an innovative underwriting program used by many insurers. This makes it difficult to integrate their digital ecosystems with those of other insurers leading to delays, inefficiencies, and errors, which can be costly and time-consuming to correct.

What’s more, the insurance industry is heavily regulated, with different jurisdictions imposing varying regulations. Jurisdiction plays a crucial role in integration in the insurance industry, particularly for companies that operate across multiple countries. When operating in multiple jurisdictions, insurance companies must comply with a range of local regulations and laws that can affect data sharing, cross-border transactions, and customer privacy. Some jurisdictions have restrictions on the sharing of data across borders, particularly personal data. Others require insurance companies to report certain data to local authorities in each jurisdiction where they operate. Insurance companies operating in multiple countries may also face language and cultural barriers that can impact integration efforts.

Data quality can also raise challenges in integration. Insurers rely on accurate and timely data to make informed decisions across the entire insurance value chain, from underwriting and risk assessment to claims management and customer engagement. Such decisions impact the fraud detection strategies, customer segmentation, product development, and pricing and profitability that are all central to an insurer’s management processes. Still, data quality issues, such as missing data, inconsistent data, and duplicate data, can undermine the effectiveness of their systems and processes.

The need for real-time integration puts pressure on the insurance industry. This pressure is driven by changing customer expectations as consumers today are accustomed to the convenience and speed of services provided by companies like Amazon, expecting the same level of service from their insurance providers. The rise of Insurtechs also drives this change, as customers demand a seamless, end-to-end experience that allows them to access insurance products and services as easily as they navigate other digital ecosystems.Bottom of Form

Insurers need to be able to process data instantaneously to provide a better customer experience and reduce processing times. However, real-time integration requires robust technology infrastructure and systems that can handle large volumes of data.

Finally, the insurance industry is grappling with a shortage of skilled employees with expertise in both technology and insurance. Integration requires specialised skills like system analysis, data modeling, and software development. However, many insurers lack the necessary resources to support their integration initiatives, and it can be difficult to find employees who can effectively integrate new technologies with legacy systems. This leads to delays and increased costs for insurers.

Despite these challenges, there are several strategies that insurers can employ to overcome integration challenges and leverage new technologies to improve their operations.

Standardisation

The lack of standardisation in the insurance industry is a significant challenge, but it is not insurmountable. Insurers can work together to develop common standards and processes that will make it easier to integrate their systems. For example, they could establish standard data formats and protocols that will enable different methods to communicate with each other seamlessly or use existing technologies, like JSON. JSON (JavaScript Object Notation) is a lightweight data interchange format that has gained popularity in recent years due to its simplicity, flexibility, and compatibility with a wide range of programming languages and platforms. JSON provides a common data format that can be easily parsed and understood by different systems and applications. You don’t have to reinvent the wheel to implement a successful digital transformation.

Cloud-based Solutions

Cloud-based solutions can help insurers overcome integration challenges by providing a flexible and scalable platform for their operations. Cloud-based solutions can be easily integrated with existing legacy systems, making it easier to leverage new technologies without disrupting existing operations. Additionally, cloud-based solutions can help insurers reduce costs by eliminating the need for expensive hardware and software.

Automation

Automation can help insurers streamline operations and reduce errors, leading to cost savings and increased efficiency. By automating repetitive tasks, insurers can free up employees to focus on more strategic. Insurers can also use artificial insurance for fraud detection by analysing patterns and anomalies in data and identifying potentially fraudulent behaviour. In the same way, AI can be used to improve pricing by implementing predictive models to determine the risk of insuring a particular individual or entity. Various factors can be taken into consideration like demographics, health history, and other relevant information.

Collaboration

Collaboration can be an effective strategy for insurers looking to overcome integration challenges. By working with other insurers and technology providers, insurers can leverage their collective expertise to develop solutions that benefit the industry as a whole. For instance, insurers can collaborate on developing common data standards or creating shared platforms for policy administration—BiPRO is a prime example of this. The German data exchange standard, developed by GDV, aims to standardise communication processes between insurance companies and their partners to streamline operations, reduce costs, and improve customer experience.

Training and Development

As previously mentioned, the insurance industry needs more skilled workers with expertise in both technology and insurance. To overcome this challenge, insurers can invest in employee training and development programs. By providing employees with the skills to integrate new technologies with legacy systems effectively, insurers can ensure they are well-positioned to take advantage of new opportunities. Customisation abilities can also help insurers find and nurture the right employees with user interfaces that simplify complex processes. Automated workflows and decision-making algorithms make it easier for new employees to navigate company systems.

Conclusion

The insurance industry is undergoing significant changes, and integration challenges are an inevitable part of this process. The complexity of insurance systems, the large number of legacy systems in use, and the lack of standardisation across different platforms can lead to delays, errors, and some insurers being left behind by competitors.

By taking a proactive approach and employing strategies such as cloud-based solutions, automation, collaboration, and training and development, insurers can overcome these challenges and unlock the full potential of new technologies. Ultimately, those insurers that can effectively integrate new technologies with their legacy systems will be well-positioned to thrive in the rapidly-evolving insurance landscape.

The insurance industry has always been complex. With rapidly evolving customer expectations and a landscape ripe for digital disruption, insurance companies today face increasing pressure to innovate and deliver exceptional customer experiences. This has its challenges, but IBA offers a solution: IBSuite.

IBSuite is an IBA platform that enables businesses to automate their workflows and streamline their operations. IBSuite offers a comprehensive suite of tools and services, including workflow automation, document management, and process orchestration, to help organisations improve their operational efficiency, reduce costs, and increase productivity. IBA is transforming the insurance industry, designed around scalability, continuous availability (24/7), and effortless accessibility. But you might still be wondering if IBSuite is right for your business.

In this blog, we will discuss the advantages of IBSuite and why insurance companies should choose IBA to optimise their digital insurance operations.

1. Streamlined Processes

One of the key benefits of IBSuite is its ability to streamline organisational processes. IBSuite’s platform can automate repetitive tasks such as data entry, policy creation, and claims handling to eliminate manual errors and inconsistencies, resulting in higher accuracy rates and lower instances of fraud.

IBSuite performs tasks with precision and accuracy, ensuring that policies are created, and claims are handled correctly every time. IBSuite helps businesses achieve greater efficiency and effectiveness. The platform’s automation capabilities are essential for organisations that want to stay competitive in today’s fast-paced business environment.

2. Improved Customer Experience

IBSuite is designed to help insurance companies improve their customer experiences, from initial quote requests to policy administration and claims handling. The platform’s advanced automation capabilities allow insurers to provide personalised and efficient services that cater to each customer’s unique needs.

IBSuite also provides faster claims processing, which is crucial for customer satisfaction. With automated claims handling tools, insurers can quickly process claims and communicate with customers in real time, providing a hassle-free claims experience. Better communication also helps build trust and transparency, improving customer satisfaction.

3. Increased Productivity

With automation capabilities that eliminate repetitive and time-consuming tasks, staff time can be freed up, allowing employees to focus on complex tasks and strategic initiatives. This allows insurers to maximise their human resources and improve overall productivity.

IBSuite’s platform also provides valuable insights into productivity metrics, enabling insurers to continually monitor and optimise their workflows. With access to this information, insurers can identify areas where automation can be utilised and implement changes that improve efficiency.

4. Lower Costs

IBSuite is designed to help insurers reduce costs and increase profitability. One of the most significant ways is through automation, which saves insurers time and money through reduced errors. Still, IBSuite can also lower costs through improved data management.

With real-time access to critical data, insurers can make informed decisions about pricing, policy design, and risk management, leading to cost savings and enhanced profitability.

5. Real-time Data Insights

IBSuite’s real-time data insights have a host of benefits beyond reduced costs. They help insurers quickly identify and respond to issues, reducing the potential for customer dissatisfaction. For example, insurers can use IBSuite’s data insights to identify underperforming policies or areas of high claims activity and take steps to improve them. They can also monitor customer behaviour to identify trends, such as an increase in claims or a change in policy preferences, and adjust their strategies accordingly.

IBSuite’s data insights can help insurers track key performance metrics, such as policy renewal rates, claims processing times, and customer satisfaction. This information can be used to set goals and measure progress over time.

6. Customisation

IBSuite is highly customisable, providing insurance companies the flexibility they need to evolve. With IBSuite, insurers can easily configure their systems to support specific requirements, allowing them to optimise operations and improve performance.

Customisation enables insurance companies to deliver more personalised services to their customers. Insurers can configure their systems to capture customer data and preferences, providing a better understanding of their customers and their needs.

7. Enhanced Security

IBSuite is designed with security at its core, offering robust security features to protect sensitive data. The platform is built with advanced technologies to ensure the confidentiality, integrity, and availability of company data.

All data transmitted between the platform and its users is encrypted using intelligent algorithms. Access controls are built into the platform. IBSuite also includes robust audit trails, which enable insurance companies to track user activity and monitor access to sensitive data. This allows businesses to identify potential security breaches and quickly take action to mitigate risks.

8. Scalability

IBSuite’s platform is designed to be highly scalable, providing insurance companies with the flexibility they need to grow. The platform can easily accommodate new policies, customers, and users, enabling insurers to expand their operations without worrying about system limitations. This also means insurers can respond quickly to market changes and seize new business opportunities as they arise.

IBSuite is built using industry-standard technologies known for their scalability, such as cloud computing and microservices architecture. This means the platform can handle large volumes of data and traffic without performance issues. Insurance companies can leverage the benefits of cloud computing to scale up or down without worrying about infrastructure management or upfront capital expenditure.

9. Rapid Deployment

IBSuite can be rapidly deployed, which is particularly useful for insurers responding quickly to market changes, regulatory requirements, or emerging customer demands. By leveraging IBSuite’s platform, insurance companies can quickly adapt to stay ahead of the competition.

IBSuite’s rapid deployment also means that insurance companies can start seeing a return on investments in shorter timeframes. Insurers can start automating their processes, reducing manual interventions, and improving operational efficiency to increase savings in record time. With IBSuite, insurers can get a head start on their digital transformation journey and achieve their goals faster.

10. Integration

IBSuite offers a range of integration capabilities, allowing insurers to connect their systems and applications seamlessly and streamline operations further. With IBSuite, insurers can integrate with core systems, as well as third-party applications like electronic payment gateways, policy rating engines, and data analytics tools. This ensures that businesses have access to the latest technologies and data, helping them to make better decisions and improve customer experience.

IBSuite also supports application programming interfaces (APIs), enabling insurers to integrate with other platforms and access a wide range of services, including fraud detection, identity verification, and social media analytics. By leveraging APIs, insurance companies can also build their own applications and services, which can help to differentiate them from competitors.

Conclusion

IBSuite offers insurers significant advantages, from streamlining processes to improving customer experience, reducing costs, and increasing productivity. Insurance companies can optimise their digital insurance operations and drive growth with IBSuite’s automation capabilities, real-time data insights, and customisation options. IBSuite is the modern platform insurers need to start their digital transformation and gain a competitive edge in a rapidly evolving industry.