The insurance business is due for an upgrade
The insurance industry offers many opportunities for improvement.
Companies should seek to develop products that deliver a better user experience for employees. Workers need timely access to the right information to make sensible decisions about the coverage that impacts every area of their lives.
Think about it: How many insurance policies do you have? Standard offerings often include health, dental, vision, short-term disability, long-term disability, life, homeowners, renters, auto, motorcycle, umbrella, errors and omissions, directors and officers liability, pet, cyber and breach.
But employees only start paying attention to their plan when there is an immediate need for it. When employees get sick, they start paying very close attention to the details surrounding what’s included in their health insurance plan, what is covered and how much it might cost out of pocket. If an employee gets into a car accident, the details of that policy become vitally important. But how many employees have access to and understand the undue complexities of these policies?
Industry inefficiencies play a major part in the confusion and consternation felt by its consumers. A 2018 survey of 300 C-level insurance executives, found that in the quote-to-enroll process, only 4.5% of new businesses are low-touch and 52% of the processes used today are achieved manually.
A report by PwC’s Audit and Risk Committee Forum found that 44% of insurance leaders believe that insurers cannot survive in their current form and operational inefficiency will impact the industry’s future. That’s a staggering statistic. As more money is poured into the insurance space, and more startups begin to hack away at the inefficiencies, there is no question that change is at hand.
Nearly $9 billion has been invested in the insurtech industry since 2014. Moreover, 2019 is already nearing $4.3 billion. Startups are fundraising more than ever, and diligently building infrastructure at a breakneck pace with all of the above top-of-mind.
With the rise of AI, machine learning and automation, many of the redundant tasks that require humans are slowly being replaced by software. Tasks can be done more efficiently and with fewer errors. Carriers who take the time to map out their business flows will see significant gains. Several of the biggest gains can be had in examining the following.
- Evaluate legacy technology that has high ongoing operating costs and consider upgrading to a SaaS platform.
- Map out business processes to evaluate where there are disconnected systems causing redundant workflows, specifically around customer-facing business units, and begin looking at integrations that will reduce duplicative entry.
- Begin looking at each business process for tasks that can be automated.
- Consider which opportunities are being missed to cross-sell products because data and analytics are not in place to provide visibility.
Ultimately, having a clear strategy for modernization can lead to better loss ratios, increased sales, clearer decision making, greater flexibility and improved operating costs.