Building a truly digital-ready insurance organisation

When it comes to digital transformation, some industries are lucky enough to have a singular business driver as a change catalyst. For example, the goal of the migration to e-banking was to cut the cost of distribution and provide 24/7 service to improve user experience.

 

While there is no such overarching driver in the insurance industry, there are still tremendous benefits for digitally transformed organisations. These are the insurers that leverage technology to accelerate operations, expand market presence, improve efficiency and become smarter. Technology grants them the superpowers of increased agility, user and market focus, and – ultimately – improved competitive position.

 

Accelerate innovation from products to models

 

If there were a single superpower needed to win in modern markets, it’s agility. A McKinsey study revealed that improved agility speeds up time to market by 5 to 7 times and increases customer satisfaction scores and employee engagement by 20-30 percentage points and 20-25 percentage points, respectively.

 

Similarly, a recent report by the Society of Actuaries found that market leaders leverage technology to launch new products 33 per cent faster than average. Last but not least, digital technology accelerates innovation and improves the ability to change quickly when it comes to new business and distribution models.

 

It’s obvious that agility matters more and more. Emerging new risks put agility and the ability to develop new products among top priorities for insurers. However, carriers often blame the lack of IT tools for their failure to design and launch new products quickly.

 

Low-code/no-code tools allow insurers to streamline the process of designing new products and making them available across their value chain. Adacta saw this as a huge opportunity early on and created AdInsure Studio, a robust low-code configuration tool that empowers insurance professionals to design new products in a visual and intuitive environment.

 

Work smarter by relying on automation and AI

 

But it’s not just about speed. Technology can also help insurers drive down costs and improve customer experience when it comes to their traditional pain points, such as claims management.

 

By automating claims handling, insurers can eliminate expenses, reduce fraud and improve customer loyalty. One of Adacta’s clients digitised claims handling to improve productivity by 112 per cent and reduce the operational cost of handling a claim by more than 50 per cent. This lends credence to a McKinsey’s study on digital disruption in insurance that showed automation can reduce the cost of a claims journey by as much as 30 per cent.

 

Claims handling is also fertile ground for artificial intelligence and data analysis models that fuel better predictions and decisions to eliminate guesswork from the process. While insurance was traditionally slow in adopting new technologies, use of AI continues to spread and is reaching maturity in some companies.

 

You can’t succeed in business alone: you need a network of employees, brokers, agents and other partners. However, integrating them seamlessly can be difficult, especially at scale. This is where APIs can come into play. These interfaces allow you to connect digital products to external systems and share them with your partners and external systems.

 

Modern platforms, such as AdInsure, include open integration frameworks to generate standards-compliant APIs available to external stakeholders. The process works both ways and can be used to easily integrate external information, such as telematics, into business processes to enrich data and extend intelligence. 

 

Move to the cloud 

 

Any discussion of digitalisation and digital transformation is not complete without mentioning the cloud. Every insurer we talk to is considering the move and with good reason – the cloud delivers agility, scalability and cost effectiveness. 

 

But every major move like this threatens operational disruption and we advocate for a gradual and staged approach that’s low-risk and high yield. If you start with hybrid infrastructure and a long-term roadmap for cloud migration, you can reduce risk and reap the benefits of the cloud while retaining the security of keeping the core system on the premises. 

 

This approach resulted in great success for one of Adacta’s clients. Its project began with AdInsure’s B2B sales portal (UI, dashboards, reports, rating engine and products) hosted in the cloud while the traditional core system stayed on-site. In the second stage, the client migrated selected lines of business into the cloud by leveraging the existing insurance product infrastructure of the B2B portal.

 

Create a digital culture

 

Getting digital-ready is not like flipping a switch. The insurance industry has been around for centuries and is risk averse as a rule, so any cultural change required to capitalise on digital initiatives is hard to achieve. 

 

Begin by getting buy-in from top management and implementing formal learning and training programmes that will disseminate change across the organisation. Employees need to be capable of more than just using technology solutions. They need to understand how new digital capabilities touch every aspect of their jobs and help them be nimbler and more productive.

 

In the end, building a digital-ready organisation is a journey. It involves many moving parts, from focusing on technological details while sketching out the big business picture to transforming company culture. However, it’s not a task you can put off. Digital leaders are already reaping the benefits and accelerating their efforts. This makes any holdouts more vulnerable to disruption from both smaller and larger competitors. 

 

Start by finding a reliable partner. As a leading software provider for the insurance industry, Adacta has spent decades helping insurance organisations grow their digital capabilities and drive new profits with its award-winning platform AdInsure. Built for Life and P&C insurers, AdInsure remains a platform of choice for leading insurers and a rising star in market reports.

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For more information, visit adacta-fintech.com or contact Adacta today