Digital transformation is a phrase used frequently in the insurance industry, and for good reason – keeping up with an increasingly digital and mobile world is critical for continuing to meet buyers’ needs. This transformation, like any major change, is rarely easy, and it can be particularly difficult for commercial lines insurers to know where to start.
Insuring commercial risks often means managing the industry’s most complex processes, involving multiple, and more difficult to predict, units of risk that are sometimes geographically separated. It also means that large, diverse teams are doing the risk analysis, claims management, agent or broker relations, and other activities to keep it all moving.
Just to make things even more interesting, the industry has begun a new phase of digital transformation – we're moving to the cloud. Again, for commercial lines insurers, the risks here are less clear and sometimes more significant than anywhere else in insurance. What are the rules around client data security? How is all this going to work? What new opportunities are opened by running our business on this evolving technology?
Those are big questions. One answer is to start with something you already have. Use new tools and technology to analyze the processes and workflows already at work in your business and make impactful changes based on that data. In this case, it’s not so much having data, but understanding and using it in a new way, that makes all the difference. If you need to make a fire, having a pile of rocks is nice, but understanding that one of them is flint is a lot better!
Underwriting is a great example. Let’s say you have three underwriting teams working on separate lines of business: Commercial Property, Workers’ Compensation, and Business Owners. They’re all performing well, but for some reason your team seems slow to quote on Workers’ Compensation submissions, and you’ve lost a couple of opportunities to competitors who responded faster.
Cloud-based business data tools can help you quickly identify a redundant step in your Workers’ Compensation workflow that’s causing a delay in quoting. Or those tools can help you determine that a piece of technology like a form reader (already in use elsewhere in your technology stack) would be helpful to this team. It’s a relatively simple challenge to solve, but without a clear look at the way your systems are being used, it may have persisted and cost you business.
The World Economic Forum’s Future of Jobs Report 2018 offers a peek at where these kinds of challenges may be coming from for the Finance/Insurance industry. For example, 74% of companies surveyed expect a major barrier to the adoption of new technology to be a skill gap in the workforce. 31% are expecting to need to expand their workforce, which means more new employees, potentially with more technical expertise than insurance industry knowledge. Automating processes can be a huge help to overcoming these two knowledge gaps. So can identifying bottlenecks and providing more training as needed to help keep things moving ahead.
Understanding your business data is key, but there is another factor, and that is understanding it in real time. Claims is an area where this is incredibly clear – when a catastrophe hits, it’s critical to be responsive to customers in real time and to clear up any roadblocks as quickly as possible. Traditional reporting methods, meant for financial reports, just aren’t agile enough to support this kind of dynamic environment.
In addition, companies are looking for ways to automate, and business data can help you figure out where to do so. According to the WorkMarket’s 2020 In(Sight) Report: What AI & Automation Really Mean for Work, 56% of business leaders plan to implement workforce automation technology in the next three to five years, with the belief that they can save 2‒3 hours per workday for all employees. They’re likely right, but to get the maximum return on that automation investment, it’s important to know which process steps can be successfully automated and which require a human touch.
A huge benefit of the insurance industry’s digital transformation and resulting journey to the cloud is that software can now be more agile, and more helpful, to insurers. Implementing it no longer takes years, especially when you’re working with products that augment core systems. Once turned on, data analysis software isn’t going to disrupt your business. In fact, it’s going to show you where and how you might want to disrupt a piece of it.
The power is yours, but seeing the data will help you wield it faster and more effectively.