VC's invest unabated in INSURTECH and many start-ups make the headlines like Lemonade, TROV, Hippo. Digitalisation is to a greater or lesser part in every insurer's strategy but actual implementation is patchy. It’s the elephant in the room- be an early mover or wait and see?
Some carriers are already fully committed to digitalisation across the organisation.
Keeping to the animal theme, look at digitalisation of a specific product. See "Make a pet claim" at Direct Line. Simple to just press a button on the website and there's a tailor-made pet claim form to fill in which starts an automated self-serve process. No mobile app to have to fire up, no emailed claims lost in the system- straight into the process and quick resolution for the pet, the owner, and the vet.
The Insurance Industry is criticised for being laggards, ignoring disrupters like Hippo and Lemonade and, worst of all, ignorance of the habits and needs of Millennials. Like other businesses rooted in 19th and 20th Century business models and practices they do have serious, contradictory challenges to face when planning digital transformation: -
1. Reconciling speed of settlement with the time to detect and deter fraud
2. Delivering “uber” digital customer experience from complex, inflexible, slow-to-change legacy systems
3. Competing with agile, single product Insurtech competitors like Lemonade whist offering a wide range of products over global markets
4. Improving customer service whilst at the same time stripping out supply chain operating expenses
5. Gaining the right insights from multiple, disparate data and analytics silos to make better decisions
It all looks like high risk for uncertain returns which is probably why Insurance C-Suite and senior execs often talk about it but then often take no action.
The good thing about having delayed is that others have taken the plunge, found out the challenges and come up with proven solutions that will not break the bank. First in other industries and now across the Insurance Industry.
360Globalnet has developed and deployed FNOL to Settlement solutions with some major insurers addressing the five major challenges.
Reconciling speed of settlement with time to detect and deter fraud
Simple claims can be settled in minutes- the acclaimed 3 second Lemonade settlement of an expensive jacket comes to mind. But why can’t damage to vehicles and buildings be dealt with the same day and even in minutes? One challenge; claims handlers do not have the capacity to spend more than a few minutes on claims forms to decide to accept or investigate further. The answer? Not just AI for simple claims but a complete solution.
360Insight highlights those claims with potential fraud letting investigators focus on those that are suspicious. In fact, 30% and more of claimants using the self-serve claims tools walk away when asked to provide photo and/or video evidence!
The insurer can now reconcile the challenge between speed and due diligence: -
· Reduce the pipeline of claims by circa 30%
· Flag claims that are bona fide for immediate settlement
· Flag potentially fraudulent claims
· Give fraud investigators the tool to combine intuition and experience with business rules to mine data and find serious fraud
· Settle most claims same day and refer only those that need it longer lead-times
Delivering "uber" quality digital UX from inflexible legacy systems
Legacy, core systems of record are good at many things and the vast investment in them needs to be utilised. Cloud Platforms will link, via a unique url, the digital experience with the back-office to provide a single digital record over the new digitally transformed claims process and the back-office.
A record that can be shared securely with everyone from the customer to the tradespeople and companies repairing, replacing, or paying out. Securely so people only see what they are authorised to see.
The customer can see the state of the claim and the contractor/body shop/vet etc the necessary details to quote and deliver the solution to the claimant's problem.
New digital platforms to wrap around and rejuvenate core systems of record to deliver an uber like UX without having to replace the legacy systems. Matching the good customer experience from agile, single product Insurtech competitors matched to the resilience, reliability and broader product ranges of traditional insurers.
Competing with agile, single product Insurtech competitors
You, the criticized traditional insurer can equal the 3 second settlement for an expensive jacket which, let's face it, is hardly complicated. But also speed up more complex claims to the delight of customers. Harvey Keitel's Motor Insurance ads for Direct Line show the way.
The advantage the traditional insurers have is that by applying this digital transformation across multiple product lines is that they could provide a wider range of products to each customer (each product must be world-class of course). In a connected world, traditional insurers can truly connect customers with a wide range of products & services. Otherwise, they face "death by a thousand cuts" from Insurtech innovators and disrupters one product and one geography at a time.
Improving customer service whilst stripping cost
It's no good delivering a world-class service if it eats away margin and threatens cash reserves! Digital transformation must cover the whole process from FNOL, though liability assessment to fraud detection and flow through the supply chain that delivers the outcome the customer needs.
Consider the waste in dealing with building and contents damage. The inspections, specifying (and over-specifying), quoting, dealing with variations and delivering the quality of repair, replacement or cash settlement. Time and waste materials can be 30% of the costs of these processes. Using photo, video and where necessary live video-streaming will substantially reduce these costs, speed up the whole process and combine great customer experience with lower cost.
But- only if built into a secure, complete data & time stamped record of every task and process from FNOL to settlement.
Gaining the right insights from disparate data and analytics silos
With today’s analytics and BI tools, you would imagine insurers have all the insights they need to make and execute better decisions, Sadly, that is far from the case. The symptom will be multiple BI tools of a similar nature deployed across the organisation typically: -
· Business Objects and/or Cognos
· Tableau and/or Qlik
· Microsoft Reporting Services and/or Power BI,
· Sisence and/or Birst.
· Sometimes these and even more!
Then, the legacy of multiple acquisitions over the years is a multiplicity of structured, semi-structured and unstructured data with almost certainly only 10% to 20% accessible and analysable.
You all know the result- instead of making the right decisions, most time is spent arguing over who has the right data. NO wonder product, customer and strategic decisions suffer. How can you tackle this barrier to success?
Combine a new digital platform that includes a 360 Degree Insight Solution that front-line staff can use to find analyse documents and data hidden away in: -
· Free form text
· Diagrams, plans and blueprints
· Scanned documents
· Document Management Systems
· Public source data
· Social Media
· Videocam and Dashcam
The reason so many whiplash and other fraudulent claims get through is that the key fraud indicators are hidden in this unstructured and semi-structured data.
The rewards of accessing and analysing 90% to 95% of data is a complete view of the business, customers, and products to make and execute better decisions. he 360Globalnet Platform joins up all the data and embeds world-class analytics
If that were not enough of an incentive then what about the General Data Protection Regulation (GDPR) live in 2018? You just must be able to access, surface and analyse this data or face very large penalties. Now you can kill two birds with one stone
Do you have to do everything at once?
Not if you want to stay sane and solvent in most cases. The beauty of a digital platform like 360Globalnet is that you can start with one product, one geography and one business unit and even one part of the process. Then build it out but get the best practice customer experience started in weeks.
If you are a global insurer with many different legacy systems in each country and a frightening mix across every geography it might take 12 months to be able to join and analyse the data from disparate systems for a 360degree sight of customer and the business.
So start today and finish the complete insurtech transformation within the year. Or, face the elephant and hippo in the room!
So it is likely to be in insurance. For a long time, the traditional insurance business model has proved to be remarkably resilient. But it too is beginning to feel the digital effect. It is changing how products and services are delivered, and increasingly it will change the nature of those products and services and even the business model itself. We firmly believe that opportunities abound for incumbent insurance companies in this new world. But they will not be evenly shared. Those companies that move swiftly and decisively are likely to be those that flourish. Those that do not will find it increasingly challenging to generate attractive returns.