Why the insurance business can’t lag behind when it comes to digital

Carriers that don’t invest in migrating from legacy platforms will either be “left behind” or bought out, according to Aspire Systems head of insurance practice Maha Santaram.

The technology expert recommended that insurance firms still operating on a legacy basis should get on board and start implementing a “gradual approach” or else fall behind their competitors

Agents can’t rest on their laurels either – insurance brokers should look to banking, where customers can often fill in details on a tablet or phone in branch to speed up onboarding.

“That’s the expectation,” said the Aspire Systems expert. “People rarely go to the bank. It’s different to the insurance industry – we still see a lot of physical forms and manual labor used in the overall insurance process.”

Aspire Systems works with leading names in insurance.

Customers are increasingly looking for a positive digital experience. Expectations have risen since the start of the COVID-19 pandemic and have been influenced by steps taken by other financial services industries.

“A lot of insurers are really going digital, especially from a customer interaction perspective,” Santaram said.

When it comes to personal lines, carriers have already begun to take advantage of digital tools and innovations to improve the customer experience.

Agents are also “open” to digital innovation, according to the firm.

However, there are some challenges. Carriers are looking to connect with brokers through application programming interfaces (APIs), but with agents on different systems and working with multiple insurers, this can create a cost and skills issue.

Claims

Claims is one area that has benefited from technology in the last two years.

The pandemic digital drive has led insurers to increasingly adopt online claims portals as they try to circumvent restrictions.

Aspire Systems has seen cases of insurers who were processing claims close to 100% offline before the pandemic now using digital claims portals.

Capturing digital devices, such as for uploading photos and documents, has now become an expectation, according to the tech firm.

“The real customer experience memory or ‘connection’ with the insurer comes when a claim scenario occurs,” Santaram said. “If I make a claim and run into difficulties, I will look for another insurer next time.”

Advanced technologies such as drones and image recognition are increasingly being used to drive claims efficiency.

For commercial line products, the need for digital adoption remains.

While buyers of personal lines insurance can in many cases get a quick online quote and insurers are increasingly improving their claims process, the industry is not yet seeing the same level of innovation on the commercial side due to the complexity of the risks.

Guarantee

However, there are other ways digital technology can and does help when it comes to sales lines, and it’s not just improvements in customer experience that can help a business achieve profits.

Machine learning (ML) and artificial intelligence (AI) have the potential to drive time savings in insurance.

“When it comes to lines of business like aeronautical and marine engineering, the more complex business, full automation in terms of signing continues to be a challenge,” said the technology expert.

However, there is an increasingly “redefined mindset” where insurers of complex commercial lines are looking to automate parts of the process, with efficiency improvements driven by analytics and data mining.

The Aspire Systems expert predicts that with the help of ML, AI and analytics such as predictive diagnostics, it should eventually be possible to automate processes that traditionally require human intervention.

For personal lines and life businesses, there are already potentially large profits to be made, existing case studies show.

Aspire Systems recently worked on a project with a life insurer that saw it achieve 97% underwriting automation and reduce processing times from four days to one day.

In terms of legacy building, carriers are looking for both out-of-the-box and custom solutions.

For property, casualty and life carriers looking to select a modernization partner, Aspire Systems’ top tip is that it’s vital their chosen technology business “understands the depth and breadth of the product.”

Maha Santaram has been in the technology business for over 20 years. As head of the insurance practice at Aspire Systems, she focuses on strengthening Aspire’s insurance solutions strategy, thereby building the portfolio of businesses and finding solutions for clients, thanks to her strong industry knowledge and extensive experience.

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